Recurring Ratios

C Transport Maritime S.A.M.
3 min readJan 19, 2022


Average Baltic Capesize Rates Per Quarter; source: Baltic Exchange

The first quarter of the year is typically a weak quarter for the Capesize market because the first quarter coincides with newbuilding vessel deliveries, that sometimes get delayed from the end of the previous year in order to benefit from a younger year of build. The first quarter also coincides with Brazil’s rainy season that usually hampers iron ore production and logistics and sometimes Australia is also affected by extreme weather events. The first quarter is also when Chinese New Year falls and cold weather slows down construction activity all of which lead to less cargo volumes on the seas and more vessel supply.

Due to the often-dramatic declines in the Capesize index in the first quarter, the ratio of the Baltic Capesize Index (BCI) to the Baltic Panamax Index (BPI) systematically falls from roughly the beginning of the year until somewhere between mid-February and early April. [1] The lowest ratios of every year are found in this period. Over the past five years, the lowest the ratio fell to was 16% during the first few days in March 2020 when the BCI 172 fell to circa $1,100 per day and the BPI 74 was at about $7,000 per day. This was the real beginning of the coronavirus pandemic when most of China’s industries were forced to suspend activity.

Although the ratio tends to decline during this period of the year, it has already reached very low levels today (53% as of 18 January) which is the lowest level for this period of the year since 2016 as the Panamax index has declined comparatively less since early December when the wider dry bulk market started its decline (the BPI has declined by $9,264 since 8 December 2021 and the BCI has declined by $30,411 in the same period).

BCI to BPI Ratio 2017–2021; source: Baltic Exchange

The last time that the ratio was at such low levels for a January was in 2016:

BCI to BPI Ratio Seasonality; source: Baltic Exchange

Currently the reason for this rapid decline is mainly the severe rainfall in the mining rich areas of south and south-eastern Brazil that caused miners in the area to suspend iron ore output and hence exports. Although this season is typically a wet one in Brazil, this year rainfall has been exceptionally strong in some areas of Minas Gerais. This has led to a dearth in spot cargoes out of the area which has a negative impact on the Capesize market.

If history is anything to go about this ratio should keep declining for at least another month up to a maximum of another two months and a half before we see a rebound. Fundamentals are showing us that this year the dry bulk market is looking to another robust year thanks to very limited fleet growth and strong cargo volumes so we believe in a turn sooner rather than later and more likely around the end of the Beijing winter Olympics towards the end of February.

[1] In this post we make a distinction between the old and the new Baltic Capesize Index (BCI) as well as the old and the new Baltic Panamax Index (BPI). The old BCI will be referred to as BCI 172 and the new one as BCI. The old BPI will be referred to as the BPI 74 and the new one as BPI. This differentiation is made for comparison purposes as there is more historical data when using the ‘old’ indices. These old indices have been replaced by the new ones although a method of calculation for the old ones is still available. Today the difference between the BCI 172 and the BCI is $1,064 per day and the difference between the BPI 74 and the BPI is $1,336 per day (with the latter having the higher value).



C Transport Maritime S.A.M.

Est. 2004 in Monaco, we currently #manage a #fleet of over 200 #drybulk ships at any point in time in the Handymax-Capesize segments.