Since 10 August, Capesize spot rates have noted substantial positive gains as the benchmark has risen from USD 35.9k/day to its current quote of USD 51.5k/day. In our view, the most recent strength is partly driven by rising Vale volumes and increased congestion figures, particularly off North Asia.

We calculate that roughly 32% of the dry bulk fleet is currently held up in port operations, up from 26% at the start of 2021 in line with the 2016-2019 average. On a nominal basis, our data depicts roughly 1,420 vessels held up in port operations off North Asia, of which we count 270 Capesizes (or roughly 30% of the Capesize fleet versus the 2016-2019 average of 22%), 500 Panamaxes (44% versus 36%), 490 Supramaxes (30% versus 30%) and 160 Handysizes (14% versus 15%).

Most notably, North Asia has recently seen a spike in congestion figures for both Capesizes and Handysizes, whilst Panamaxes have seen an elevated congestion level throughout 2021. In sum, our AIS data shows roughly 1,400 dry bulk vessels currently held up in port operations off North Asia or 13% of the total dry bulk fleet which compares to the 2016-2019 average of 9%. Since the end of July, we count c70 incremental Capesize vessels, 55 Panamaxes, 14 fewer Supramaxes and 30 additional Handysizes currently held up in port operations off North Asia.

In conclusion, we therefore see the most recent spike in Capesize spot rates as partly driven by increased North Asian congestion, which in turn has amplified a sub-optimal fleet positioning ahead of rising Vale volumes. However, we note that dry bulk congestion has been focused on the larger vessel classes, while this year’s upcycle in the dry bulk space has been led by the smaller vessel classes, underlining strong and broader demand fundamentals in our view.