Dry bulk opens the final week of August with the Baltic Dry Index at 3,186 points, its highest level since 2 June and 12.1% higher over the week to Friday 28 August. The rally is intact, but its foundations are narrower than the headline number suggests, and this week brings the first real test of whether the Atlantic will join the Pacific or leave the Capesize segment carrying the market alone.

The Starting Position

Baltic Exchange - last close, Friday 28 August 2026
+------------------------+-----------+------------+
| Index                  |   Close   |  Wk Change |
+------------------------+-----------+------------+
| BDI  Dry Index         |   3,186   |   +12.1%   |
| BCI  Capesize          |   5,336   |    strong  |
| BPI  Panamax           |   2,315   |    firmer  |
| BSI  Supramax          |   1,647   |     flat   |
| BHSI Handysize         |     881   |     flat   |
+------------------------+-----------+------------+
C5 W.Australia/Qingdao approx. USD 14.80/mt
C3 Tubarao/Qingdao      approx. USD 35.80/mt

The spread between the Capesize and the smaller segments is the number worth watching. Capesize and Panamax both reached three-month highs; Supramax and Handysize did not move at all. That is not a broad recovery in dry bulk demand. That is an iron ore and coal story concentrated in the largest tonnage.

Development One: China Is Importing More Ore and Making Less Steel

The most commercially relevant divergence in the market right now is not on the freight side at all. Chinese iron ore imports for the first seven months of 2026 reached 736.84 million tonnes, up roughly 6% year on year, while Chinese crude steel output fell approximately 3% in the first half. Imports are rising into falling production.

For a shipbroker this is genuinely good news in the short term and a warning in the medium term. Ton-mile demand is being generated by restocking and by grade substitution rather than by end-use consumption, and restocking cycles are finite. Iron ore settled at USD 95.84/tonne on Friday, holding the USD 93 to USD 100 band it has occupied since June – a price that is comfortable enough to keep miners shipping but not high enough to signal any demand surge behind it.

Vale’s recovering export volumes add supply into that same picture. Combined with a Chinese demand mix shifting from construction towards manufacturing, the setup argues that the current Capesize strength is a volume phenomenon, not a value one. Volume phenomena can run for weeks. They rarely survive a stock-cycle turn.

Development Two: The Fuel Curve Is Working Against the Freight Curve

Bunkers firmed across almost every major hub into the weekend even as Brent closed the week around USD 88.28/bbl, some five dollars below the previous Friday. Marine fuel is being priced by product-side tightness rather than by the barrel, and geopolitical risk in the Gulf – including reports of the UAE suspending economic ties with Iran and continued attention on Hormuz transit volumes – is keeping a floor under Middle East distillate in particular.

Bunkers - 28 August 2026 (USD/mt, Ship and Bunker)
+-------------+------------------+-------------------+
| Port        |  VLSFO           |  MGO              |
+-------------+------------------+-------------------+
| Singapore   |   784.50  +14.00 |  1,146.00  +16.50 |
| Rotterdam   |   663.00   +6.50 |  1,233.00  +19.50 |
| Fujairah    |   795.00   +9.50 |  1,388.00  +11.50 |
+-------------+------------------+-------------------+
Rotterdam/Singapore VLSFO spread approx. USD 121/mt
Fujairah MGO premium over Singapore approx. USD 242/mt

The Fujairah MGO premium of roughly USD 242/mt over Singapore is the figure to carry into this week’s estimates. Any Indian Ocean or Arabian Gulf rotation that assumes a routine Fujairah stem is now carrying a materially different cost base than the same voyage calculated a fortnight ago. On Handysize and Supramax employment, where port-stay consumption and ECA transits fall disproportionately on the distillate line, that premium can erase the entire benefit of a modest freight improvement.

The Marcenta View – What This Week Decides

• The Atlantic nomination round is the whole question. End-September cargo nominations out of Brazil and West Africa are due. If they arrive in volume, C3 follows C5 higher and the rally broadens into something durable. If they disappoint, the Capesize premium narrows quickly once the weather-driven precautionary cover from the South China Sea systems unwinds.
• Capesize owners hold the leverage, but it has a shelf life. Prompt Pacific tonnage is well placed this week. We would be inclined to convert that leverage into firm employment rather than hold out for a further leg that depends on Atlantic confirmation.
• Charterers with flexible laycans should not chase. A seven-session rally into a weather event is the least attractive moment to fix cover. Value is more likely to appear in the second week of September than in the first.
• Panamax remains the balanced trade. North Pacific grain continues to provide dependable support, and period interest around USD 19,000 to 20,000 for short employment tells you owners themselves are not underwriting a sustained move higher.
• Supramax and Handysize require a different conversation. These segments have not participated. Owners should be pricing on positional strength and cargo-specific tightness, not on the BDI headline, which currently describes a market they are not in.
• Re-run bunkers before firming anything carried over from last week. A rising freight index against a rising fuel curve can leave the TCE flat or worse. This is the single most common estimating error we see in a firming market.

Our working assumption for the week: the Capesize market holds its level into midweek on Pacific momentum, and direction from Thursday onward is set almost entirely by what the Atlantic nomination round produces. We will revisit as the sessions print.

Marcenta Chartering and Shipping Ltd. provides dry bulk chartering, freight analysis and commercial advisory services across all segments from Handysize to Capesize. Index data: Baltic Exchange. Bunker data: Ship and Bunker. Commodity and trade data: market reports as at 28 August 2026. Figures reflect the last available close and are provided for market information only.