Global shipping is navigating ongoing disruption, with implications for dry bulk trades and supply chains. While demand remains steady, rising costs and shifting trade patterns are shaping market dynamics. This wrap highlights the key developments influencing the sector.
- Baltic Dry Index bounces back after hitting two-month low
- China’s iron ore demand stronger, so far in 2026
- Fertiliser ships face long backlog after Hormuz opens
- China’s energy transition could spell lower demand
- Weaponised waterways unsettle grain freight
Baltic Dry Index Bounces Back After Hitting Two-Month Low
The Baltic Exchange’s dry bulk freight index from a near two-month low. The Capesize index was up 63 points, or 1.6 per cent, at 3,940. The Panamax index fell 74 points, or 3.3 per cent, to 2,149. Among smaller vessels, the supramax index was up nine points, or 0.5 per cent, at 1,714.
China’s Iron Ore Demand Stronger in 2026
China’s iron ore imports so far in 2026 have been on the rise compared to last year. In its latest weekly report, shipbroker Banchero Costa said that “2025 was another positive year for global seaborne iron ore trade. In Jan-Dec 2025, global loadings of iron ore increased by +3.5% y-o-y to 1,732.0 mln tonnes, based on AXS Marine vessel tracking data. 2026 has begun on a firm note, with export volumes up by +3.8% y-o-y in Jan-May 2026 to 692.2 mln tonnes.
Fertiliser Ships Face Long Backlog After Hormuz Opens
The Gulf region is home to some of the world’s largest fertiliser plants, and the waterway handled about one-third of the global trade in urea, one of the world’s most important crop nutrients. The months of disruption have left large volumes of urea and other fertiliser products trapped behind the strait, sitting aboard vessels unable or unwilling to transit the waterway.
China’s Energy Transition Could Spell Lower Demand
Upside for imported thermal coal is becoming more constrained as most incremental power demand will be supplied by renewables and nuclear. Coal-fired generation may flatten even while total electricity demand continues to rise. That matters for dry bulk because China is still the main swing factor in seaborne thermal coal trade.
Weaponised Waterways Unsettle Grain Freight
Supply and demand growing at much the same pace would normally lead to a steady market. Instead, the cost of shipping grain has surged. The Baltic Dry Index (BDI) was nudging 3,000 in the second week of June, up over 70% year on year and far surpassing forecasts most analysts gave World Grain just six months ago. The International Grains Council’s Grains and Oilseeds Freight Index (GOFI) climbed by about one-third over the same period, from near 130 to the high 170s, with a May high of over 190.
- Baltic Dry Index remains under pressure
- Coal gasification drive adds fresh momentum to the coal trade
- Mixed drivers shaping the trade
- Geared bulker values surge on robust demand for modern vessels
- Suez Canal Will Raise Surcharge Fees
Baltic Dry Index remains under pressure
The Baltic Exchange’s Dry Bulk Index (BDI) fell by 3.4% d-o-d (98 points) to 2,818 points on 9 June 2026, reflecting a bearish overall market sentiment. It has been on a consistent downward trajectory since 28 May, indicating a sustained cooling in dry bulk freight sentiment. The decline was primarily driven by weakness in the Capesize segment, which overshadowed the relatively stable performance of Panamax vessels and continued strength in the Supramax market.
Coal gasification drive adds fresh momentum to the coal trade and bulk shipping
Coal gasification is increasingly emerging as an additional driver of coal trade and dry bulk shipping demand. While it is unlikely to fundamentally reverse the long-term transition away from coal, it is gradually creating new industrial demand beyond conventional thermal power generation.
Mixed drivers shaping the trade
The latest (mid-April) forecasts for the world economy published by the International Monetary Fund suggest a 0.3 percentage points slowing in gross domestic product growth to 3.1% in 2026, after 3.4% last year. But the outcome, and calculations for individual dry bulk importing countries, will be shaped by the widespread effects of unpredictable changes in energy supplies and prices, and how consumers and businesses react.
Geared bulker values surge on robust demand for modern vessels
The latest HORIZON Monthly Dry Bulk Report from MSI notes that since the middle of 2025, bulker asset values have been steadily on the rise, with particularly notable gains seen within the Handymax segment (45-70k Dwt). Over the first four months of 2026, new, five-year-old and 10-year-old Ultramax prices increased by approximately 10%, 13%, and 20% respectively.
Suez Canal Will Raise Surcharge Fees as It Still Looks to Increase Transits
The Suez Canal Authority has posted its first wide-ranging rate increases in the form of revised surcharges for transits in three years. The circulars show that the surcharges applied on top of the base rates will be increased starting on July 15. The authority calls these surcharges temporary, but they will represent significant price increases for nearly all categories of ships.
- Dry bulk market – Capesizes gained momentum
- Capacity scarcity forces ship owners to convert vessels
- Gulf tensions tighten tonnage
- Guinea cap may pressure rates
- LNG gains from oil shock
Dry Bulk Market – Capesizes Gained Momentum Last Week
The market strengthened over the course of the week, with sentiment increasingly underpinned by robust Pacific activity and a late-week improvement in Atlantic fundamentals. Despite a fragmented trading environment caused by public holidays in both the UK and Singapore, the market demonstrated resilience, with the BCI 182 5TC climbing above the $50,000 mark.
Capacity Scarcity Forces Shipowners To Convert Bulk Carriers into Container Ships
The container shipping market is booming, and demand for container ships exceeds the number of ships available. Shipyards are booked with new orders, and renting a container ship has become costly. Hence, owners are converting supramax bulk carriers, which carry loose cargo like coal or grain, into cellular container ships.
Gulf Disruption Boosts Tonne-Mile Demand
Gulf tensions could disrupt nearly 30 million tonnes of dry bulk trade per month, equal to over 7% of global dry bulk demand. Drewry estimates 210 bulk carriers are stuck in the Gulf, while iron ore pellet exports from Iran and Bahrain have stopped. Fertiliser trades are also exposed, as Gulf countries supply about 25% of global nitrogen fertiliser. Longer Cape routings and renewed coal demand are supporting tonne-miles.
Guinea Bauxite Cap Could Pressure Capesize Rates
Guinea may cap bauxite exports at 150 million tonnes in 2026, down from 178 million tonnes in 2025. The move follows oversupply, weaker bauxite prices and capped Chinese aluminium production. A cap could reduce Guinea-China bauxite demand by around 46 Capesizes. That equals 2.4% of the current fleet and could weigh on Capesize rates in the second half.
Hormuz Oil Shock Tilts Shipping Towards Alternative Fuels
The Middle East conflict and Strait of Hormuz blockade have pushed bunker fuel prices sharply higher, improving the relative economics of alternative fuels. LNG benefits most, with costs rising less than oil products, making it the strongest near-term option for shipowners. Methanol is also becoming more viable, especially for methanol-ready vessels, though blue and green variants are needed for real emissions gains. Ammonia remains a longer-term option, while policy delays
- Bulk commodities react to fragile ceasefire
- Key bulk flows disrupted
- Dry bulk market remains firm
- Simandou reshapes iron ore supply
- Energy security reshapes fuel strategy
Temporary Ceasefire Keeps Uncertainty in Dry Bulk Markets
Capesize markets gained momentum through the week, with C5 rates nearing $14 and C3 fixtures improving to around $35 on stronger miner activity. The BCI 5TC index advanced from $38,837 to $40,371, reflecting firmer sentiment by week’s end. Panamax performance remained mixed, as Pacific demand supported gains in the P5TC index from $17,617 to $18,018 despite continued Atlantic weakness. Ultramax/Supramax activity softened amid holiday disruptions, while Handysize markets saw better support in Asia due to tightening tonnage availability.
Hormuz Disruption Impacts Dry Bulk-Linked Commodity Flows
The Hormuz disruption is affecting several dry bulk-linked commodities, particularly fertilisers and sulphur. The Gulf accounts for 20% of global seaborne fertiliser exports and 46% of urea trade, making supply critical for major importers such as India, Brazil and China. Nearly half of global sulphur trade also passes through the Strait, supporting fertiliser production and industrial processes. Disruptions are tightening availability, increasing costs and creating pressure across agricultural and industrial supply chains.
Dry Bulk Markets Strengthen with Pacific-Led Support
Dry bulk markets showed steady performance across segments, with Capesize rates supported by strong Pacific activity, holding in the high $11,000s despite easing from earlier highs. Atlantic trades improved, with Brazil–China routes fixing in the high $29,000s to low $30,000s. Panamax markets gained traction on coal demand, with fixtures around $21,000, while Ultramax activity strengthened across the Atlantic and Indian Ocean, with rates in the low to mid-$20,000s, reflecting balanced demand and supply.
Simandou Project to Drive Long-Term Iron Ore Supply Growth
Guinea’s Simandou project is expected to become the largest driver of seaborne iron ore supply growth. Output is forecast to reach 16 million tonnes in 2026, with gradual ramp-up thereafter. The project is expected to displace higher-cost supply and reshape global trade dynamics, while reinforcing demand for high-grade ore. Analysts highlight that ramp-up uncertainty and infrastructure constraints will play a key role in shaping near-term market sentiment.
Hormuz Crisis Shifts Focus to Fuel Security and Alternative Fuels
The Hormuz disruption is reshaping the maritime fuel transition, bringing energy security to the forefront of investment decisions. Conventional bunker reliability is increasingly uncertain, with low-sulphur marine fuels projected to exceed $1,200 per tonne before stabilising. While regulatory uncertainty persists, alternative fuels such as methanol and bio-LNG are gaining attention. The crisis highlights the need for diversified fuel strategies, as supply reliability becomes as critical as cost and compliance for shipping operations.
- Hormuz disruption impacts global shipping flows
- Dry bulk market holds steady
- Bauxite trade faces cost pressures
- Project cargo sector sees rising uncertainty
- Fuel availability concerns rise
UNCTAD Warns of Risks to Dry Bulk and Global Trade
Disruptions in the Strait of Hormuz are raising concerns for dry bulk-linked trades, particularly fertilizers, with around one-third of global seaborne volumes (16 million tonnes) passing through the route. This creates risks for agricultural supply chains and food security. The corridor also handles about one-quarter of global seaborne oil trade. According to UNCTAD, rising freight, fuel and insurance costs could further strain global trade flows and vulnerable economies.
Dry Bulk Market Shows Resilience Despite Supply Pressures
The dry bulk market has started the year strongly, supported by firm demand fundamentals. The Baltic Dry Index averaged 1,906 points in early 2026, significantly higher year on year. Strong iron ore and bauxite volumes continue to support Capesize earnings, with demand forecast to grow by around 1.9%. However, rising fleet expansion, with 42m DWT of deliveries expected, may weigh on market balance despite positive demand trends.
Bauxite Trade Faces Pressure as Freight Costs Rise
Rising freight costs are putting pressure on the Guinea–China bauxite trade, a key driver of Capesize demand. Freight rates have increased from the mid-$20s to above $30 per tonne, tightening export economics. Guinea accounts for over 40% of global supply, with exports reaching 183 million tonnes in 2025. Analysts note that higher costs, potential policy controls and price pressures are creating increased volatility across this critical trade.
Hormuz Disruption Leaves Project Cargo Sector in Limbo
Disruption in the Strait of Hormuz is creating uncertainty for breakbulk and project cargo markets, with around 1,000 vessels reported stuck in the waterway. Rising insurance costs, higher fuel prices and extended delays are affecting operations. Project cargo, accounting for 8–9% of vessel traffic, is particularly exposed due to its reliance on specialised vessels. Prolonged disruption could delay infrastructure and energy projects while increasing logistics complexity.
Fuel Availability Concerns Rise as Hormuz Disruption Continues
Concerns are mounting over global bunker fuel availability as the Strait of Hormuz disruption persists. Prices have already doubled, with very low sulphur fuel oil crossing $1,000 per tonne, while supply imbalances are emerging across regions. Availability, not just cost, is becoming a key concern, affecting voyage planning and contract commitments. Rising fuel costs may slow vessel speeds, reduce effective supply and create congestion at bunkering hubs.