Freight News, Logistics, Sea

Dry Bulk Demand Softens as Coal Shipments Fall

[ November 7, 2025   //   Gary Burrows ]

Coal shipments are forecast to decline 4.9 percent between 2025 and 2027, as demand is falling as electricity generation from renewable sources continues to expand, particularly in China, Europe and India, said BIMCO, the Danish shipping association.

Furthermore, the global steel demand outlook is weak, contributing to limited demand for iron ore and coking coal.

We estimate that the dry bulk supply/demand balance will 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 analysis manager at BIMCO.

“A weakening in market conditions could lead to lower freight rates and second-hand prices, though these could differ by segment. The capesize segment is expected to remain more resilient, supported by limited fleet growth and longer sailing distances. In contrast, the panamax and supramax segments may face higher pressure from higher deliveries amid limited cargo demand growth,” Gouveia said.

The global economic outlook has improved since BIMCO’s last update, supporting dry bulk demand, though it remains weaker than a year ago. In China, growth is projected to slow in 2026 and 2027 compared to 2025, driven by its lingering property sector crisis and excess manufacturing capacity.

Overall, ship demand is forecast to grow 1.5 percent to 2.5 percent in 2026, and 1 percent to 2 percent in 2027. Longer sailing distances, driven by stronger South Atlantic iron ore and bauxite shipments, are expected to support demand. Furthermore, grain and minor bulk shipments are expected to strengthen, partly compensating for a poor outlook for coal and iron ore.

Ship supply is projected to grow 2.8 percent in 2026 and 2.7 percent in 2027. Fleet growth is expected to accelerate in 2026 and 2027, even as recycling gradually increases. Deliveries will be strongest in the supramax and panamax segments, while capesize deliveries will see an uptick in 2027. Sailing speeds are expected to marginally fall in 2026 and 2027, limiting supply growth.

“The ongoing trade negotiations between the U.S. and China present a downside risk to the outlook. Shipments between the two countries have 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 vessels resume sailing through the region instead of around the Cape of Good Hope, it could result in a 2 percent drop in ship demand,” Gouveia said.

Tags: BIMCO