BRS Shipbrokers reports that the third quarter of 2025 underscored one defining truth for global dry bulk markets — change remains the only constant. With trade barriers tightening, shipping routes shifting, and market volatility intensifying, the industry continues to balance between policy uncertainty and emerging opportunities.
Tariffs and Trade Tensions Reshape Market Dynamics
Recent trade developments have set the tone for a turbulent year ahead. As new U.S. tariffs take full effect in 2026, major dry bulk exporters are bracing for significant structural headwinds. The top 30 dry bulk importers, representing nearly 89% of global shipments, will now face a more challenging trade environment as they attempt to rebalance surpluses with the U.S.
China and India — together responsible for nearly half of global dry bulk demand — remain particularly exposed to these new tariffs. At the same time, potential secondary sanctions linked to Russian energy trade and renewed U.S. commitments at the UN signal deeper geopolitical complexity for key commodity flows.
The fresh round of targeted tariffs introduced on 1 October reinforces a stronger “America First” agenda, focusing on protecting domestic industries such as pharmaceuticals. While certain nations like Japan and the EU secured exemptions to avoid overlapping charges, most exporters will contend with dual tariff layers.
Adding to the friction, threats of new export controls on U.S.-made software and possible 100% tariff hikes on Chinese imports in November point to further turbulence in trade relations between the world’s two largest economies.
Tradeflow Pressures and Weakening Demand Signals
The first eight months of 2025 saw declines across the three major dry bulk cargo categories — iron ore, coal, and grains — down by 0.3%, 5.5%, and 4.3%, respectively. Much of this softening stems from China’s continued economic slowdown and the deepening crisis within its property and construction sectors.
Home sales across China’s largest developers have now fallen for six consecutive months, with the August figures showing a 17.6% year-on-year drop. Despite government stimulus in Beijing and Shanghai, the sector’s prolonged slump, coupled with high inventory levels, continues to dampen import demand across key bulk commodities.
Policy Shifts and Operational Implications
Since the spring, evolving USTR policies have reshaped vessel deployment and chartering patterns. A decline in Chinese-linked transatlantic voyages and uncertainty over port fee enforcement have constrained tonnage availability — particularly in the subcape segment — providing indirect rate support on transatlantic routes.
China’s retaliatory response came swiftly. As of 10 October, new port charges on U.S.-linked vessels were introduced on a net-ton basis, with limited exemptions for maintenance calls and domestic-built ships. For larger segments, the impact is magnified, effectively targeting capacity exposure to China-bound cargoes.
These developments hint at an evolving environment where “tonnage neutrality” may no longer be guaranteed. Shipowners and operators with diversified financing and fleet deployment structures are likely to hold an edge in navigating this policy-driven volatility.
Freight Markets: From Fatigue to Firmness
Following a subdued first half of 2025, the freight market regained momentum in Q3. Despite operational setbacks earlier in the year, bauxite shipments to China have driven Capesize activity sharply upward, particularly from Guinea, displacing Brazil-origin cargoes.
Geopolitical risk in the Red Sea continues to deter vessel transits through the Suez Canal, tightening effective supply and offering price support for dry bulk rates. In contrast, China’s slowing coal imports have been balanced by a 24% surge in exports — particularly in steel and fertilizer — improving utilization rates for geared bulkers in the Pacific.
By September, spot freight indices from C5TC to HS7TC had rebounded strongly, reversing earlier losses and reaching new highs. The Red Sea disruptions, coupled with USTR-linked port effects, further pushed North Atlantic rates upward, widening the spread against Pacific trades.
A notable shift has also emerged in agricultural trade flows. For the first time in decades, China has bypassed U.S. soybean purchases at the start of the export season, signaling how commodities are becoming instruments of strategic negotiation. The redirection of U.S. Gulf cargoes toward alternative buyers in the Americas and Mediterranean has reshaped tonnage deployment, widening rate differentials across major Kamsarmax and Supramax routes.
Market Outlook: Uncertainty Defines the Horizon
Despite short-term recovery, the medium-term outlook remains highly uncertain. The dry bulk sector faces an array of potential turning points — from escalating U.S.–BRICS trade tensions and shifting Chinese procurement strategies to the possible resolution of conflicts affecting the Black Sea and Red Sea trade corridors.
The expiration of the 90-day tariff truce between the U.S. and China in early November looms large, carrying the potential to reshape freight markets once again. As global dynamics evolve, adaptability in fleet operations, financing, and trade strategy will remain the industry’s most critical asset.
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Source: BRS Shipbrokers
