Golden Week, Indian coal stocks and Black Sea rerouting: What dry bulk is watching in October

Key takeaways

• Iron ore prices weakened into China's Golden Week as the China Iron and Steel Association (CISA) urged mills to cut output and port inventories rose
• Lower Capesize freight added to the pressure on delivered iron ore, particularly on the West Australia to Qingdao route
• Coal stocks at Indian power plants have fallen to a 3-year low, lifting seaborne thermal coal flows to India and supporting demand into winter
• Russia's decision to stop Kazakh coal moving by rail in October and November is pushing European buyers towards Colombia
• Soybeans were left out of China's tariff relief on US goods, keeping US soybeans uncompetitive for Chinese crushers
• A lengthening Capesize ballaster list pushed earnings down sharply, but the October demand outlook remains firm

Iron ore: Prices soften as Chinese mills face output pressure

Iron ore went into China's 8-day National Day holiday on the back foot. The Singapore Exchange (SGX) 61% Fe November contract fell 3.5% week on week to $92.80/t on 1 October. The Dalian Commodity Exchange (DCE) January 2027 contract fell 1.3% to 713.5 yuan/t on 30 September.

The weakness was mainly a Chinese demand and margin story. Member mills of the China Iron and Steel Association (CISA) averaged 1.92 mt a day of crude steel from 10 to 20 September, 7.3% lower year on year.

The association urged mills to cut production further as port inventories climbed and profitability weakened.

Freight added to the pressure. Capesize rates eased on the C5 West Australia to Qingdao route, lowering the delivered cost floor. With Dalian closed for the holiday, Singapore futures are trading without Chinese participants. Thin liquidity can exaggerate moves, and our base case is that prices stay soft over the holiday.

On the supply side, Australian shipments eased from the previous week's highs. Brazilian shipments rose week on week but remained below last year. A stronger real and higher freight continue to squeeze Brazilian netbacks. Simandou is the standout. September shipments increased markedly from August, and that pace makes our accelerated ramp-up case the most likely scenario for 2026.

Coal: Indian stocks hit a 3-year low as the Kazakh rail halt tightens supply

Coal fundamentals are firmer. Inventories at Indian power plants have dropped to their lowest level in 3 years, and a large share of domestic coal-based plants are at critically low stock levels. Weak hydro output and steady summer-level demand reduced stocks. The government has responded by mandating imported coal blending and ordering captive coal plants to maximise generation. As a result, seaborne thermal coal flows to India recovered in September.

In Europe, Russia's rail network cut wagon allocations of Kazakh coal to zero for October and November, prioritising grain. Polish buyers are now seeking replacement coal from Colombia. Turkish utilities face Russian offers near $142/t and Baltic shipping disruption. Their Colombian imports rose to 0.35 mt, the highest since April. With European gas inventories exceptionally low, cost, insurance and freight (CIF) ARA month-ahead paper reached $142/t, up from $137/t. Richards Bay month-ahead paper rose to about $125/t from $121/t on stronger Indian demand.

China is a counterweight. Bohai Rim inventories have eased to seasonal levels but remain above last year. Imported coal is priced at a discount to domestic supply, which reduces the chance of a short-term demand surge. That could change as the Daqin line enters annual maintenance from 7 to 26 October.

Grains: Soybeans miss out on the tariff thaw as corn stocks surprise

The Trump-Xi meeting produced little for grain markets. China lowered tariffs on a basket of non-sensitive US goods that included corn, sorghum, and wheat, but excluded soybeans. US soybeans therefore remain uncompetitive for Chinese commercial crushers. Progress against China's annual agricultural purchase commitment is still behind pace.

The US Department of Agriculture (USDA) Grain Stocks report put September corn stocks at 2,095 million bushels (mbu). That is 173 mbu above the September World Agricultural Supply and Demand Estimates (WASDE), and it triggered a sharp sell-off. Our view is that this may be only the start of further weakness. Soybean stocks of 315 mbu came in only 10 mbu below the USDA estimate.

In the Black Sea, Turkish efforts to revive flows have not yet produced a material change. Russia is leaning on Baltic ports, which face possible winter ice disruption in the Gulf of Finland.

Ukraine has been hit by the temporary closure of the Sulina Canal since 26 September. In Brazil, soybean planting is set to accelerate in October, with rains expected to ease dryness in Mato Grosso.

Freight: Capesize earnings fall as Golden Week slows chartering

Capesize earnings fell sharply before stabilising. The Capesize ballaster list, which shows how much dry bulk tonnage supply is available to load, had lengthened a week earlier. That pushed Pacific round-voyage earnings lower. Atlantic earnings held up, taking the Atlantic premium to an unseasonably high level not seen since late December 2025. Our analysts see the October Capesize forward freight agreement (FFA) as oversold, with West African chartering set to accelerate.

The Panamax 5 TC average was almost flat at $21,407/day. Elevated ballaster counts in both basins may weigh over the holiday, before Australian and Indonesian coal provides support. 

The Handysize 7 TC average was almost unchanged at $18,147/day. More Handysizes are loading at Northern Russian ports and Constanta, which suggests Black Sea grain rerouting is underway. 

The Supramax 11 TC average edged up to $22,681/day. US soybean chartering and El Niño-driven Panama Canal restrictions should support US Gulf rates.

Minor Bulks: Guinean bauxite exports retreat m/m as rains and freight costs squeeze producers

Guinean seaborne bauxite exports reached 13.72 mt in September, up 9% year on year but down 14% month on month as late-season rain disrupted mining and logistics operations. Elevated freight rates continue to depress FOB prices, leaving several smaller producers operating at a loss. Exports are projected to recover in October as rainfall diminishes.

Meanwhile, Philippine nickel ore exports surged 135% year on year to 6.80 mt in September, driven by a 160% jump in shipments to Indonesia (reaching 2.31 mt). If current trends persist, Indonesia could overtake China as the main customer for Philippine nickel ore during 2027.

Key watchpoints

• Whether Chinese mills act on CISA's call to cut output once Golden Week ends
• Indian coal import pace, and Colombian coal allocation between Europe, Turkey, and Asia
• The timing of any soybean tariff relief, and whether corn weakness extends
• The Capesize ballaster list and dry bulk tonnage supply forecasts as West African chartering accelerates through October

The holiday lull is a pause, not a reversal. October's direction will be set by Chinese steel discipline and Atlantic coal demand.