Dry Bulk Shipments: Demand growth weakened as coal shipments declined
WWe expect the dry bulk supply/demand balance to strengthen slightly in 2025 and gradually weaken in 2026 and 2027. Cargo demand growth is slowing, as coal shipments decline and iron ore shipments stagnate,” said Filipe Gouveia, Shipping Analytics Manager at BIMCO.
Coal shipments are expected to decline by 4.9% between 2025 and 2027. Demand is declining as electricity generation from renewable sources continues to expand, particularly in China, Europe and India. In addition, the outlook for global steel demand is weak, contributing to limited demand for iron ore and coking coal.
“Weakening market conditions may lead to lower freight rates and second-hand prices, although this may vary depending on the segment. The capesize segment is expected to remain more resilient, supported by limited fleet growth and longer shipping distances. In contrast, the panamax and supramax segments may face greater pressure from higher shipping amid limited cargo demand growth,” Gouveia said.
The global economic outlook has improved since our last report, supporting dry bulk demand, although it remains weaker than last year. In China, growth is expected to slow in 2026 and 2027 compared to 2025, driven by a prolonged property sector crisis and excess production capacity.
Overall, ship demand is expected to grow 1.5-2.5% in 2026, and 1-2% in 2027. Longer shipping distances, driven by stronger South Atlantic iron ore and bauxite shipments, are expected to support demand. Additionally, grain shipments and small shipments are expected to strengthen, partially offsetting the poor outlook for coal and iron ore.
Ship supply is projected to grow by 2.8% in 2026 and 2.7% in 2027. Fleet growth is expected to accelerate in 2026 and 2027, despite gradual increases in recycling. Shipments will reach their highest levels in the supramax and panamax segments, while capesize shipments will increase in 2027. Shipping speeds are expected to decline slightly in 2026 and 2027, limiting supply growth.
“Ongoing trade negotiations between the US and China pose downside risks to the outlook. Shipping between the two countries has already nearly halved, and further tariff increases could further weaken cargo volumes and economic conditions. Another key risk is the potential return of ships to the Red Sea route. If ships return to sailing through the region instead of via the Cape of Good Hope, this could result in a 2% decline in ship demand,” Gouveia said.
Source: BIMCO
