The Capesize market has remained strong through the first eight months of 2026 and is expected to remain elevated for the remainder of the year. The Baltic Capesize Index (BCI) has averaged 3,862 points so far this year, close to 50% above the 2025 average and approximately 45% above the five-year mean. The strength has been driven by a firm underlying demand picture rather than by disruption alone, with iron ore volumes out of Brazil and bauxite out of West Africa underpinning tonne-mile demand while the supply side has remained comparatively disciplined.
The BCI closed at 5,336 points on 28 August, having gained just over 17% in the space of a week. The move takes the index back towards the high levels seen in late May and lifts the August average to 4,786 points, around 12% above July and more than 80% above the 2025 average. The rally has been distinctly Capesize-led, with Panamax following at some distance and the Supramax and Handysize segments close to flat over the same period.
The BCI is set for a strong remainder of 2026
Baltic Capesize Index — monthly average, index points.
- Realised (monthly avg)
- Forecast (median)
Source: Tidewake forward curve
Note: Forecast bands are the 10th–90th and 25th–75th percentiles of the model’s realised out-of-sample errors at each horizon.
Continued momentum with some deterioration on the horizon
The autumn months of 2026 are expected to bring continued strength, followed by a gradual taper as the year closes out. Based on available data from 28 August, it is expected that September and October will bring about modest declines in the BCI, of 9% and 12% respectively, but still leave the market at historically elevated levels. In line with seasonal patterns, Tidewake expects a material weakening into the first quarter of 2027, driven by the Brazilian wet season and Chinese New Year.
Estimates that come with uncertainty
The forward-looking estimates are generated by a proprietary multi-factor model built on the Tidewake database of listed dry bulk company performance, combined with freight market dynamics, equity prices and asset values. However, as has been seen throughout the last couple of years, forecasts can quickly be rendered obsolete as geopolitical tension or exogenous shocks hit the supply and demand balance. As such, there is significant uncertainty associated with predictions as one moves further out along the freight curve.
What it means for owners
As indicated by the forward curve, the near-term picture remains constructive for Capesize owners. Iron ore exports still appear to have room to run in the closing months of the year, and continued geopolitical tension is introducing inefficiencies that tighten effective supply. Set against that, a number of risks appear to be building, particularly in the macroeconomy, where continuing geopolitical tension and rising bond yields in the US are casting a shadow. While Chinese demand and import volumes have remained strong in recent years, there is a downside risk of deterioration. On the supply side, vessel contracting has picked up materially through 2026, which points towards a heavier orderbook and pressure on rates further out. Despite this, the picture for the remainder of 2026 remains constructive for owners, especially if rates can be locked in for longer durations at current levels.
