MID-SHIP Report: Dry Bulk Freight Market – February 5, 2026

February 5, 2026

As we move deeper into Q1, it is becoming clear that 2026 is not shaping up to be the smooth freight market correction many expected. Fleet growth is real and visible, but geopolitical risk, trade-route disruption, and shifting commodity flows continue to absorb effective capacity and support freight levels. The key theme remains: distance over volume. While overall seaborne dry bulk trade growth is moderating, tonne-mile demand continues to outpace cargo volumes. Longer sailing routes, particularly continued diversions away from the Red Sea and strengthening South Atlantic-to-Asia trades, are driving higher vessel demand. At the same time, fuel prices have firmed, and macroeconomic signals remain mixed, reinforcing uncertainty that continues to underpin freight pricing.

Market conditions – stabilising after seasonal softness: After the typical easing seen in very late Q4 and early January, dry bulk markets have begun to stabilise. Capesize earnings appear to have found a floor as longer-haul iron ore and bauxite shipments from the Atlantic improve. Although Chinese iron ore port inventories remain elevated following heavy imports late last year, expectations around post-Lunar New Year restocking, steady infrastructure-related steel demand, and continued long-distance supply flows are supporting near-term sentiment. Panamax and Ultramax markets remain more balanced but are benefiting from solid grain and minor bulk programs, particularly out of South America and Southeast Asia. Handysize markets continue to show regional tightness, with uneven vessel availability in both the Atlantic and Asia helping sustain rates despite ongoing fleet deliveries. While spot markets are not surging, their resilience to downside pressure remains a notable feature.

Supply growth vs. effective availability: Vessel deliveries are accelerating in 2026, led by the Panamax and Supramax segments. However, effective capacity growth is being tempered by longer voyage distances, slightly slower operating speeds, planned dry-dockings, and persistent congestion tied to seasonal grain flows and port inefficiencies. Recycling activity is expected to rise modestly but remains insufficient to meaningfully offset fleet growth. The result is a market that remains finely balanced rather than oversupplied. Cargo outlook… mix and routing matter. Cargo mix continues to matter more than headline volume growth. Iron ore shipments are expanding only marginally, but lower prices and increased exporter competition are encouraging longer-haul flows that disproportionately benefit vessel demand. Coal volumes continue to trend lower overall, with declines in China and developed economies only partly offset by growth in India and Southeast Asia. Grain demand is a clear bright spot early in 2026, with strong South American export programs, additional U.S. soybean volumes flowing into Asia, and steady regional demand supporting Panamax and Ultramax utilisation. In minor bulks, energy-transition commodities, including bauxite and other ores, continue to support tonne-mile demand despite moderating growth rates.

Looking ahead: As we approach the spring cargo season, the dry bulk market appears positioned for continued firmness rather than a sharp correction. Fleet growth is real, but longer distances, uneven vessel availability, and ongoing geopolitical uncertainty continue to limit flexibility.

Bottom line for cargo interests: Early engagement, clear program visibility, and flexibility across vessel classes remain the most effective tools for managing freight exposure in a complex and finely balanced market. Our team is ready to support your strategy and secure competitive freight solutions.

Subscribe below to receive the full report.