Breakwave Bi-Weekly Dry Bulk Report - October 13, 2026

• Capesize Spot Rates Hit Two-month Lows – Although Capesize spot rates have declined by approximately $20,000 from their early-September multi-year highs, they remain comfortably above the $30,000 threshold, representing a 40% yearover-year increase. This recent retreat likely stems from iron ore transportation costs hitting a decade-high percentage of the commodity's price, which has subsequently stifled inquiry from smaller, cost-constrained miners. However, elevated futures trading at a premium to spot rates (contango structure) indicate widespread market optimism that this downturn is temporary. Given persistent global operational inefficiencies that continue to constrain vessel supply, further significant declines remain unlikely in the near term. While the market's underlying confidence does not suggest this could be the precursor to a more meaningful structural shift rather than a standard correction, a neutral, wait-and-see stance is recommended until fourth-quarter demand and ongoing geopolitical developments provide clearer direction while the elevated orderbook looms as a longer-term headwind in a market that is characterized by significant optimism given the record high freight levels across all shipping.

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