With Capesize earnings expected to remain firm, the strength of the Cape market is likely to continue to support Panamax freight rates. A key driver of this continued correlation will be competition on major coal routes that still employ both Cape and Panamax tonnage.
 
With Capesize earnings expected to remain firm, the strength of the Cape market is likely to continue to support Panamax freight rates, offsetting the negative impact of strong growth in the Panamax fleet this year.
 
In 2025, Capesizes’ share of global coal trade fell from 23.3% to 20.3% by cargo weight, while Panamax increased its share from 55.3% to nearly 60%. The shift reflects a broader structural pattern, with Panamax gaining share in the Atlantic since 2021 and in the Pacific since 2023.
 
Looking ahead, the forces driving this adjustment are expected to strengthen. Firm iron ore and expanding bauxite volumes will absorb additional Capesize tonnage, while a heavy Panamax delivery schedule is expected to supply more vessels on these routes.
 
Age is unlikely to constrain this shift, with around 59% of Capesize vessels employed in Atlantic coal trades and about 60% in the Pacific under 15 years old and therefore viable for charter by large mining companies.
 
 
 
As a result, there remains scope for further Panamax share gains in 2026. MSI identifies Aus–China, Aus–India, Aus–Japan and South Africa–China as key routes where Capesize participation remains significant, but shorter haul distances favour Panamax, leaving further scope for substitution.
 
The Indonesia–India trade is also positioned for additional Panamax gains, with Capes still carrying around 28 Mt (36%) in 2025.
 
However, a substantial reduction in Indonesian production would likely reduce overall volumes on the route, undermining demand while disproportionately affecting Capesize employment.
 
MSI analyst James Benali comments:
“Overall, further Capesize migration into iron ore and bauxite, combined with strong Panamax fleet growth, should support additional Panamax gains in coal employment in 2026. While this dynamic will keep the segments closely correlated, stronger Capesize fundamentals are expected to drive relative outperformance versus Panamax. Forward markets already reflect this view, with the Cape-to-Panamax FFA ratio averaging 1.72 for 2026.”