The latest data on Indonesian thermal coal shipments highlights significant trends affecting the dry bulk market. According to the World Bank, Australia’s Newcastle coal price averaged $104.41 per tonne in May 2025, reflecting a 6% increase from April but a notable 26.5% decrease compared to the previous year. As rail imports from Mongolia and Russia become cheaper with improved infrastructure, there is a clear movement towards alternative transportation methods over seaborne options. China remains the leading importer of Indonesian coal, accounting for 42% of shipments, followed closely by India at 19%.
Both countries are increasingly seeking coal with higher calorific values. In response to rising domestic coal production driven by policy support and new coal-fired power plants, China is gradually reducing its seaborne coal imports. In Q1 2025 alone, China approved 11.3 GW of new coal plant capacity, indicating a strong commitment to bolstering its domestic energy infrastructure. The Baltic Dry Index (BDI) experienced a decline towards the end of June, primarily due to oversupply concerns, especially in the Capesize segment.
The Atlantic basin showed a modest tightening of vessel availability, while the Pacific region faced ongoing vessel surplus. Consequently, freight rates for Capesize vessels, particularly on the Brazil–North China route, dropped by 6% week-on-week. Rates for Panamax vessels also declined, falling to $32 per tonne for the ECSA to the Far East route. Similarly, Supramax freight rates decreased 7%, settling at $35 per tonne for the US Gulf to the Far East route.
Despite the mixed signals in demand trends, the overall outlook for freight rates remains weak due to a consistent decline in cargo volumes and vessel oversupply across various segments. In manufacturing, iron ore tonne-days have supported the Baltic Capesize Index, contrasting with the coal segment’s challenges. Recent developments in maritime agreements could stabilize traffic in certain regions, although security concerns persist, necessitating close monitoring of vessel activity and shipping patterns.