- The dry bulk market is set for higher earnings in 2025, driven by environmental regulations limiting vessel speed and supply growth.
- Resilient commodity demand, particularly for coal and grains, will support shipping trade despite subdued industrial activity in key regions.
- Shifts in trade dynamics, including China’s diversification efforts and US trade policy changes, will shape global shipping flows.
As the dry bulk market enters 2025, a combination of evolving regulations, resilient demand for key commodities, and shifting trade dynamics are poised to reshape the industry. With vessel supply constrained by environmental compliance measures, higher charter rates are anticipated. Despite headwinds such as subdued industrial activity and geopolitical uncertainties, the outlook for the sector remains optimistic, reports Drewry.
Environmental Regulations Reshape Supply Dynamics
The enforcement of regulations like the Carbon Intensity Indicator (CII) and FuelEU Maritime in 2025 will constrain vessel speed and limit supply expansion.
Shipowners’ compliance strategies, including slower sailing speeds and a preference for younger vessels, will contribute to market fragmentation and higher freight rates.
Resilience in Commodity Demand
Global shipping demand remains strong, supported by trade in coal and grain.
Elevated imports of thermal coal in China, India, and Southeast Asia will sustain demand, while Europe’s transition away from fossil fuels will temper its imports.
High exports from Russia, Australia, and Brazil will offset reduced French exports, with additional growth driven by China’s diversification efforts. It includes new sorghum imports from Brazil.
Weak domestic demand will be counterbalanced by increased exports to distant markets. It supports longer voyages and boosts shipping demand.
Shifting US Trade Dynamics
The re-election of Trump introduces uncertainty into US-China trade relations. While tariffs on imports from Canada and Mexico could raise costs, their impact is unlikely to disrupt major trade flows significantly.
Seasonal lows in US soybean exports to China are expected in early 2025 following expedited shipments in late 2024.
Vessel Re-routing and Geopolitical Influences
Geopolitical tensions and environmental considerations are prompting vessel re-routing via the Cape of Good Hope (COGH) and reducing transits through the Suez Canal.
This results in longer voyages, tightening vessel supply, and supporting higher freight rates.
Modest Supply Expansion
Scheduled vessel deliveries for 2025 remain limited, further tightening supply in the dry bulk market.
Coupled with environmental regulations and rerouting trends, this creates buoyancy in charter rates, bolstered by strong demand fundamentals.
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Source: Drewry
