A two-speed week at sea

If you only watched the headline, you'd call this a decent week. The Baltic Dry Index (BDI) closed Friday at 2,714 points, up about 2% on the week and its highest since 13 October [1]. Look underneath, though, and the picture splits in two. Big ships recovered. Mid-sized ships and the busiest container lane slid.

That's our read for the week: the bounce belongs to the largest hulls on the longest hauls. It isn't a broad recovery, and it's worth not mistaking it for one.

Capesizes found their feet

Start at the top. The Baltic Capesize Index (BCI) rose for a third straight session on Friday, up 0.9% to 4,126 points, its highest since 12 October [1]. The Baltic Exchange's weekly round-up puts the Capesize 5TC average at US$33,795 a day on Monday and US$37,420 by Friday, with gains on every major route [2].

The trades doing the lifting were long ones. On the Brazil and West Africa to China runs, the C3 rate moved from the mid-US$34s to the high US$36s per tonne as the list of empty ships heading that way tightened [2]. Charterers are already looking at December dates, since most end-November cargoes are covered [2].

There's a catch in the calendar, though. Even after Thursday's jump, Reuters had the BCI on course for a monthly fall of about 22% [3], and by Friday's close the BDI was down about 13.6% for October [1]. One good week doesn't undo a rough month.

The middle of the market went the other way

Panamaxes had a hard time. The Baltic Panamax Index (BPI) fell 1.7% on Friday to 1,889 points, its lowest since 13 April [1]. On Thursday, average Panamax earnings were US$17,289 a day, and the index was on course for a monthly fall of about 17.6% [3]. The Baltic Exchange describes thin transatlantic demand, weak grain and mineral enquiry and extra ships ballasting in from the Indian Ocean, which left owners competing for work [2].

Supramaxes held up better, but still drifted. The Baltic Supramax Index (BSI) slipped 0.3% to 1,865 points on Friday [1]. US Gulf rates fell as grain and petcoke cargoes dried up [2]. Even so, as of Thursday the BSI was on track for a third monthly gain of about 4.5% [3]. So the smaller ships aren't collapsing. They just aren't sharing in the Capesize bounce.

Tankers: VLCCs bounced off the floor

The crude market tells a similar story at an extreme level. The Baltic Exchange says VLCC rates "appear to have found a floor" late last week and rebounded this week [2]. Its benchmark Middle East Gulf to China route, TD3C, rose 48 points to WS1262.5, worth a round-trip TCE of US$1,345,710 a day for the standard Baltic VLCC [2]. West Africa to China (TD15) gained 82 points to WS633.75, or US$632,191 a day [2].

Yes, those numbers are real, and no, they aren't normal. They sit against a backdrop of disruption in the Strait of Hormuz, where Drewry reports only two vessels transited last week [4].

Again, the strength stopped at the top. On the Suezmax routes the Baltic Exchange reports "the weaker trend continued", with Nigeria to UK Continent (TD20) down almost 14 points to WS713.89 [2]. In the Mediterranean, Aframax rates on Cross-Med (TD19) tumbled 137 points to around WS703 [2].

Containers: the transpacific gave back ground

Box rates fit the pattern from the other side. Drewry's World Container Index (WCI) fell 3% to US$4,429 per 40ft container on 29 October, ending a two-week rise [4]. The transpacific did most of the damage. Shanghai to Los Angeles fell 6% to US$7,514, and Shanghai to New York fell 5% to US$9,631 [4].

Asia to Europe barely moved. Shanghai to Rotterdam edged up 1% to US$3,686, while Shanghai to Genoa held at US$4,151 [4]. Drewry cites a National Retail Federation forecast that US ocean imports will drop 11% month on month in November, and it expects transpacific rates to fall again next week [4]. Carriers have announced higher November rates on Asia to Europe, but Drewry isn't sure they'll stick, given spare capacity and weak demand [4].

One more thread to watch: Drewry says Suez Canal transits rose to 62 vessels last week, the highest weekly level this year [4]. If that keeps building, ships get shorter voyages, and shorter voyages tend to free up capacity.

What ties it together

Put it side by side and a theme comes through. Where distance and disruption are in play (Capesizes on Brazil and West Africa runs, VLCCs out of the Gulf), rates firmed. Where demand had to carry the market on its own (Atlantic Panamaxes, US-bound boxes), it couldn't.

That matters for how you read the BDI's weekly gain. It's mostly a Capesize story, and Capesizes have been volatile all month.

What would change our mind

We'd call it a broader recovery if the Panamax index stopped making multi-month lows and Supramax rates held through November. On containers, we'd change our view if carriers' November increases actually stuck on Asia to Europe. And on tankers, any real easing around Hormuz could take a lot of air out of VLCC rates quickly.

This is reporting and analysis, not investment advice.