BIMCO’s latest Bulk Shipping Market Overview & Outlook for July predicts a weakening dry bulk supply/demand balance for both 2025 and 2026 compared to 2024. This outlook is driven by a combination of slowing demand growth, a weaker global economic outlook, and geopolitical factors.
Supply and Demand Balance
- Weakening Balance: The dry bulk supply-demand balance is expected to weaken in both 2025 and 2026. This is due to demand growth slowing down while fleet supply continues to expand, albeit at a slower pace. The weakening balance may lead to lower freight rates and a decrease in second-hand ship prices.
- Red Sea Assumption: The outlook is based on the assumption that ships will not be able to fully return to the Red Sea until the end of 2026. A full return to the Red Sea is estimated to be equivalent to a 2% decrease in ship demand, which would further weaken the market.
- U.S. Trade Policy: Shifts in U.S. trade policy and the introduction of new tariffs have created uncertainty and are directly impacting approximately 4% of global dry bulk tonne-mile demand.
Demand Outlook
- Growth Forecast: Overall, dry bulk demand is forecast to grow at a timid pace of 0-1% in 2025 and 1-2% in 2026.
- China’s Economy: China’s economic growth is expected to slow, particularly in the second half of 2025, due to the pressure from tariffs, a struggling property market, and deflation. The World Bank forecasts China’s GDP growth to slow to 4.5% in 2025 and 4% in 2026.
- Commodity-Specific Forecasts:
- Iron Ore: Shipments are forecast to fall by up to 1% until the end of 2026, as weakening Chinese steel demand leads to increased price competition between imports and domestic supply.
- Coal: Shipments are estimated to fall by 7.9% between 2024 and 2026. This is primarily due to rising electricity generation from renewable sources, which is reducing import demand.
- Minor Bulks: This segment is the main driver of growth, with shipments expected to grow 8.1% between 2024 and 2026. This growth is largely fueled by a ramp-up of Guinean bauxite shipments to China.
Supply Outlook
- Fleet Growth: The overall dry bulk fleet is projected to grow by 6.1% between the end of 2024 and the end of 2026. This growth is primarily driven by an increasing number of deliveries, especially in the Panamax and Supramax segments.
- Orderbook: The dry bulk orderbook is equivalent to 10.8% of the current fleet. However, newbuilding contracting has been slow this year due to weaker market conditions.
- Recycling: A total of 13.9 million DWT are forecast to be recycled between 2024 and 2026. Despite a drop in freight rates, recycling activity has remained low so far this year.
- Sailing Speeds: As freight rates weaken, ships are expected to slow down to save on fuel costs. Sailing speeds are estimated to slow by 1.5% between 2024 and 2026, which will cause the effective supply (tonnage available to carry cargo) to grow at a slower rate than the physical fleet. Supply is estimated to grow at a rate of 1.9% in 2025 and 2.6% in 2026.
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Source: BIMCO
