BIMCO has issued its Bulk Shipping Market Overview & Outlook for April 2025, highlighting a weakening supply/demand balance in the dry bulk market for 2025 and 2026, driven by trade policy shifts, economic headwinds, and softening cargo demand.
BIMCO’s Shipping Analysis Manager, Filipe Gouveia, stated that the dry bulk market’s supply/demand balance was expected to weaken in both 2025 and 2026. He noted that since the last update, a change in US trade policy had led to a deterioration in the economic outlook and increased uncertainty, prompting BIMCO to reduce cargo demand growth projections by 0.5 percentage points for both 2025 and 2026.
The tariff increases by the US and China in effect as of 25 April are estimated to directly affect 4% of dry bulk tonne mile demand. They are expected to impact the growth of minor bulk cargo volumes, as shipments to the US may stagnate or decrease. On the other hand, China is expected to increase purchases of dry bulk cargoes from other countries, leading the US to seek alternative markets.
The demand outlook is weakest for iron ore and coal shipments, the two largest dry bulk commodities. Iron ore shipments are expected to stagnate in 2025 and 2026, as Chinese domestic steel demand slips, partly due to China’s property sector crisis. Coal shipments are estimated to drop 2-3% in 2025 and 1-2% in 2026, amid rapid deployment of renewable energy capacity and stronger domestic coal mining in China and India, the two largest importers.
BIMCO’s outlook
Supply/Demand
Supply is forecast to grow 1.5–2.5% in 2025 and 2–3% in 2026. This is lower than fleet growth due to slower sailing speeds. Demand is estimated to stagnate in 2025 and grow 1–2% in 2026. A change in US policy is affecting economic growth and curbing dry bulk cargo demand growth. The supply/demand balance is expected to weaken in both 2025 and 2026. Consequently, freight rates and second-hand ship prices could soften. BIMCO has assumed that ships will not fully return to the Red Sea during 2025 and 2026. A full return would be equivalent to a 2% decrease in ship demand.
Demand
China’s GDP growth is forecast to slow to 4.0% in both 2025 and 2026, according to the IMF. This slowdown is driven by tariffs, China’s property crisis, and deflation. Iron ore shipments are forecast to stagnate from 2024 to 2026. Chinese domestic steel demand is slowing, and exports are unlikely to fully compensate. Coal shipments are estimated to fall by 4% between 2024 and 2026 due to the rapid deployment of renewable energy capacity and increased domestic mining in importing countries. Minor bulk shipments are expected to grow 4% between 2024 and 2026. However, increased US tariffs are likely to slow growth.
Supply
The fleet is expected to grow 5.7% between the end of 2024 and the end of 2026. The capesize fleet is expected to grow the slowest due to low deliveries. The dry bulk orderbook is equivalent to 10.3% of the current fleet and is shrinking due to a recent drop in newbuilding contracting. About 16.3 million DWT are forecast to be recycled between 2024 and 2026. As market conditions worsen, recycling of older ships could increase. Sailing speeds could slow by 1.5% between 2024 and 2026, as ships reduce speed to save fuel costs amid weakening freight rates.
On the supply side, an expected decrease in freight rates could lead to a decrease in sailing speeds, as this would allow for savings in fuel costs. Consequently, we expect supply to grow at a slower rate than the dry bulk fleet.
Overall, ship demand is estimated to stagnate in 2025 and grow 1-2% in 2026, whereas ship supply is expected to grow 1.5-2.5% in 2025 and 2-3% in 2026.
“Amid a poorer outlook for the dry bulk market, we expect that freight rates will remain lower in 2025 and 2026, than in 2024. We forecast that the outlook for the panamax segment will be the weakest, as coal accounts for over half of the cargo it transports. Conversely, low fleet growth in the capesize segment could keep that segment’s freight rates higher compared to other segments,” Gouveia explained.
The weaker supply/demand outlook should also impact asset prices. Amid weaker freight rates, second-hand ship prices could weaken. Newbuilding prices have fallen since the start of the year, and we do not currently expect them to revert to previous highs.
In this update, we are assuming that ships are unable to fully return to the Red Sea during the current and next year and reroutings via the Cape of Good Hope will continue. The full return of ships would be equivalent to a 2% decrease in ship demand. If this occurs, the demand outlook will be weaker than our baseline forecast,
… said Gouveia.
