There’s never been a truly “normal” year in shipping, but 2025 feels particularly unpredictable. Volatility is no longer the exception; it has become the norm. From political headwinds to shifting trade alliances, the dry bulk market is being tested on multiple fronts. Yet, it is precisely in such times that shipping demonstrates its resilience. If there’s one enduring truth about this industry, it is that shipping will thrive and surprise on a crisis.
We are living in what I would call a multi-crisis era, where economics, geopolitics, and climatic responsibilities collide. Forecasting often feels futile; tariffs can change overnight, sanctions can redirect cargo flows within hours, and traditional freight trading models struggle to capture this new reality, further exaggerated through the pricing disconnect between cargo and tonnage.
Dry bulk is a cyclical business
The first half of the year was weak, with low volumes and depressed rates. Yet, just as the market sinks, it can rebound with resilience; and it has. This is the inherent cyclical rhythm of the dry bulk sector where periods of oversupply and slow demand are inevitably followed by spikes in activity, driven by shifting trade flows, seasonal demand, and macro-economic swings.
Demand is evolving
The demand outlook is not collapsing, but it is changing shape.
Trade and Tariffs: The U.S.–China relationship remains a wildcard. Every new tariff reshapes trade patterns and dents confidence. A slowdown in manufacturing means fewer inputs, which directly impacts dry bulk volumes.
Steel and Cement: China’s property slowdown continues to weigh on domestic steel and cement demand. Unless steps are taken to stimulate housing and further infrastructure projects (although neither show the necessity for obvious reinvestment); iron ore volumes are likely to remain constrained or completely reliant on the overseas export markets. Meanwhile, future reconstruction in Ukraine is set to drive a sharp rise in Turkish steel and cement exports.
Coal: Coal remains a significant swing influencer of the dry bulk trade. However, the trend is clear in that the rise of renewables points to peak coal and at the very minimum a change in the medium-term demand paradigm. While China and India continue to rely on domestic production and finance new coal projects, the overall share of coal in the global energy mix is starting to shrink.
Longer voyages: Red Sea disruptions, sanctions, and shifting trade corridors add complexity but also opportunity. Longer routes generate more tonne-miles, translating into value for operators who can manage voyage economics effectively. Growth in bauxite, fertilisers, and aggregates, combined with longer voyages, is quietly supporting tonne-mile demand, specifically in the geared sector.
Supply is catching up
The dry bulk fleet is projected to grow at a high single-digit pace over 2025–2026. Deliveries remain steady and material, especially in the Panamax and Supramax segments. The orderbook remains sizeable at around 10% of the existing fleet, even as new orders slow.
Whilst it could be stated that the industry is showing an unusual level of restraint, yards are full of new orders for other asset classes and so this has ultimately made newbuilding orders scarcer, concurrently a more robust market has encouraged Owners to keep their older vessels in service longer.
The outlook
Freight rates in the physical market are the window into the supply and demand balance, whilst the FFA market tends to showcase the sentiment barometer. Currently these indicators are conflicted to a degree, and this has created a wider bid/offer spread in the freight market. With a physical focus it would be difficult to bet against the seasonal downturn in the near term, however the paper market is firmly backing a rapid escalation in trade flows between the worlds’ largest economies and so a more robust Q1.
In other metrics the demand growth is expected to stay in the low single digits, with a modest boost in tonne-mile demand from longer trade routes. Supply growth may slightly outpace demand, raising the risk of mild oversupply if demand underperforms. On balance, when focusing on the geared sector alone, the container market can be an important indicator and, in this world, the MLOs are projecting a more negative outlook for the next 1-2 quarters; so, it would appear prudent to not bet on a trade deal to (theoretically) underpin demand growth.
By late 2026, the groundwork for a more sustained recovery could begin to emerge, particularly if supply discipline holds. Capesizes are the preferred asset class to lead the recovery and ultimately support a supply-dominated Panamax market which, along with the Supramax market, is on track to face a more challenging near-term environment.
The takeaway
The dry bulk market has always rewarded adaptability. Today, success is less about perfect forecasting and more about resilience, timing, and agility. Operators who can redeploy tonnage quickly, manage emissions efficiently, and control costs will continue to succeed.
Shipping endures and evolves, and every downturn plants the seeds for the next upcycle. To reach this situation, and in a somewhat comparable out look to Berkshire Hathaway and the equity markets; there likely needs to be a reset on the Supply and Demand matrices to provide a clearer market trend.
In the current market environment, the goal is not to predict every disruption or market move, but more to focus on one’s own service proposition and business competencies where there is some degree of control.