BULK carrier asset values have been on an upward trajectory since February following improvements across most dry cargo markets, which have prompted increased confidence for buyers of secondhand tonnage.

“In late January and early February, coinciding with Chinese New Year holidays, dry bulk freight rates experienced a significant downturn, However, market dynamics shifted notably in February,” said Xclusiv Shipbrokers analyst Eirini Diamantara.

“Since then, we’ve observed a robust upward trend in dry bulk rates, which has consequently provided a boost to secondhand vessel values.”

Since early February the Baltic Capesize 5TC Average index surged by 57%, while the Kamsarmax 5TC Average and the Supramax 11TC Average both climbed by circa 60%.

Diamantara told Lloyd’s List that rising bulk carrier values of an average of 5% across most segments, had been due to both strengthening freight markets and increased buyer confidence. But whether rising values will be maintained is questionable.

“The continuation of these values is uncertain and will depend on strong freight rates, vessel supply and demand, the global economy, and potential policy changes from the new US administration, as well as broader geopolitical events,” noted Diamantara.

Since the beginning of the year, sales transactions have been dominated by the handysize, supramax, and panamax segments.

A total of 40 handysize bulkers have been sold since the beginning of the year with the majority being of between 11- and 15-years-old.

In the panamax/kamsarmax  segment most activity was recorded for mid-age and older units, with the 21- to 25-year-old group being most popular. Some 39 panamax bulkers have been sold since January.

The supramax sector also saw significant activity, with the 11- to 15-year-old age group and 16- to 20-year-old age group each accounting for 20 sales.

Recent bulk carrier sales included the Seatankers-controlled kamsarmaxes Sea Pluto (IMO: 9609146) and Seaduty (IMO: 9392432). Built in 2013 and 2008 respectively they were both sold to undisclosed buyers and attained sale prices of $16.5m and $14m respectively.

Greek shipowner Avin International sold its elderly panamax bulker Evangelia (IMO: 9221798) to China-based buyers. The 25-year-old, 74,300 dwt, vessel is due special survey and was sold for $4.7m.         

In the ultramax segment, London-headquartered Zodiac Maritime sold the 2019-built, 63,500 dwt Maplegate (IMO: 9855927) and the 2018-built, 60,400 dwt Oakgate (IMO: 9826483). The Japan-built pair are understood to have been sold to Indonesian buyers for circa $60m en-bloc.

Recent handsize bulker sales included the 2015-built IVS Sunbird (IMO: 9736042), which was sold by South Africa’s Grindrod. The 33,400 dwt vessel was sold to Egyptian buyers for circa $17m.

While demand for secondhand bulk carriers has been improving, orders for bulk carrier newbuildings have dropped off considerably since the beginning of the year.

Diamantara said that while interest in ordering dry cargo newbuildings could return, overall volume was likely to remain below previous years due to high newbuilding prices, extended delivery times, and ongoing market uncertainty.

“Newbuilding orders for bulk carriers in 2025 have been notably low, with February marking a particularly subdued month with only one contract signed, representing the lowest level of orders in over 30 years,” she said. 

There have been substantial deliveries of new bulk carriers in the past two years, which has not been offset by a corresponding increase in vessel recycling activity. This could potentially further dampen the immediate need for new orders.

“Shipowners may wait to assess the dry bulk market’s reaction to such significant fleet additions before committing to newbuilds,” said Diamantara. 

Meanwhile, the announcement of the US Trade Representative port levy announced in February appears to have already impacted bulk carrier sale and purchase activity.

Bulk carrier sales transactions data shows a big decline in transactions involving China-built ships.

Of the 220 bulk carriers that have changed hands since January, Japan-built ships provided 56% of all sales, while the share of China-built vessels significantly decreased to 32%, down from 42% during between January and end-April 2024.

Bulk carriers are expected to be less affected by USTR port fees than originally feared, following the publishing of watered down plans last week.

Now, chiefly vessels in excess of 80,000 dwt and owned by China-domiciled companies will be charged a USTR levy, while vessels arriving at US ports in ballast will be exempt from the charge.

The changes will be of particular benefit to US grain exporters, which normally utilise panamax vessels for their shipments.

While a watered down USTR plan on port fees was issued on 17th April, Diamantara believes the revised fee structure is likely to sustain a two-tiered dry cargo sale and purchase market, potentially shifting demand away from China-built bulkers.

“If the USTR policy persists we could see a future devaluation of China-built bulk carriers, particularly in segments equal to or larger than kamsarmaxes, while vessels built in Japan and South Korea could experience increased demand and higher valuations,” argues Diamantara.