Based on the latest data, the August closure outlines a volatile shipping industry on a contradictory course. Geopolitical tensions, the shifting balance of supply and demand for capacity, and the upheavals of the global economy play a key role, composing a complex “mosaic” that leads the freight rates in the sector’s largest categories into continuous fluctuations.
The containership market continues to retreat, with spot freight rates recording a drop for the eleventh consecutive week, with Drewry’s World Container Index slipping to $2,119 per FEU at the end of August, marking a weekly loss of 6% and an annual reduction approaching 59%. The routes originating from Shanghai were at the center of the pressures, as freight rates to Rotterdam decreased by 10%, to Genoa by 5%, while a decline was also recorded on routes to New York and Los Angeles.
Drewry warns that the supply and demand balance will worsen further in the second half of 2025, leading to a new slump in prices, with US port tariffs on Chinese vessels and realignments in trade lanes playing a decisive role. Meanwhile, according to an analysis by Linerlytica, if the situation in the Red Sea and elsewhere stabilizes, the global shipping market may be faced with an oversized fleet. Therefore, based on the same data, the next big challenge for the containership market is the increase in demolitions, in order to achieve a balance.
The tanker freight market presents a contrasting picture. Despite conflicting estimates on oil demand, with the International Energy Agency appearing cautious and OPEC more optimistic, shipowners’ revenues recorded a spectacular improvement. Indicatively, VLCCs strengthened from $30,000 to $47,000 daily during August, suezmaxes soared from $27,500 to $62,000, while aframaxes moved from $23,200 to $35,000 dollars per day. Finally, MR tankers moved upwards in the Atlantic, touching $36,000 daily, while in the Pacific they remained at the lower levels of $20,000. These variations reflect the impact of trade flows: medium-sized vessels benefit from realignments in the Atlantic and Mediterranean, while very large tankers are strengthened by India’s turn to distant suppliers such as Brazil.
In contrast to the volatility, the LPG carrier market shows remarkable stability. The charter cost for an 84,000 cubic meter VLGC (Very Large Gas Carrier) remains at $2.2 million per month, while the freight rates of LGCs (Large Gas Carrier) stabilize at $975,000 and those of MGCs (medium gas carriers) record a small increase to $950,000. This balance shows that the market has settled at high levels, with changes being limited to a short-term horizon. LNG carriers faced slight pressures, with the charter cost of a 174,000 cubic meter / XDF type vessel decreasing slightly to $33,000 daily east of Suez, while west it was maintained at $35,000. One-year time charters were set at $44,000, recording a drop of around $1,000 dollars daily. This retreat is considered cyclical and related to the limited demand of the summer months, with the market expecting a boost as winter approaches.
In the dry bulk market, the picture is mixed.
The Baltic Dry Index recorded a small rise at the close of the last week of August, reaching 2,025 units. However, the individual sizes showed variations, with capesize increasing due to strong Chinese demand for iron ore, panamax retreating due to weakness in grain exports, and supramax moving marginally upwards. In this context, a recent BIMCO report outlines the prospects of the bulk carrier market and estimates that there will be a weakening of the supply-demand balance both in 2025 and 2026. With the “wave” of American tariffs directly affecting 4% of the global ton-mile demand of bulk carriers, demand for ships is expected to increase by only 1% in 2025 and by 1%-2% in 2026. On the other hand, the supply of ships is estimated to increase by 1.9% in 2025 and by 2.6% in 2026, a result of the higher delivery rate of Panamax and Supramax vessels.
