“Uncertainty over the Strait of Hormuz remains central to the outlook. A three-week ceasefire between the US and Iran allowed transits to partly recover, but safety conditions have since deteriorated. Under normal market conditions, around 4% of dry bulk cargoes and tonne-mile demand sail through the strait,” says Filipe Gouveia, Shipping Analysis Manager at BIMCO.

Given this uncertainty, BIMCO presents two forecast scenarios. The “SoH closed” scenario assumes that the strait remains effectively closed indefinitely, while the “SoH open” scenario assumes that it reopens by the end of the third quarter of 2026. The longer the closure persists, the closer the market outlook will resemble the SoH closed scenario.

A full return of dry bulk shipping to the Red Sea is not factored into either scenario, although a full return could lower tonne-mile demand by around two percent. The Houthis have announced a blockade of Saudi Arabia’s Red Sea ports, increasing uncertainty over when commercial shipping may be able to fully return to the Red Sea.

“The dry bulk supply/demand balance remains supportive in 2026, but we expect it to weaken in 2027, albeit from a high baseline. If the Strait of Hormuz reopens by the end of the third quarter, we forecast a comparatively stronger market outlook for both years,” says Gouveia.

In 2026, supply is forecast to grow by 1.5-2.5%, regardless of our forecast scenario. This is slower than the dry bulk fleet growth, due to an increase in congestion and because around 0.5% of the dry bulk fleet remains underutilised due to being trapped in the Persian Gulf. Demand is expected to grow faster than supply in both scenarios, supported by stronger grain and coal shipments as well as longer sailing distances. Under our SoH closed scenario, it’s forecast to grow 2.5-3.5%, while under our SoH open scenario, growth is estimated to be one percentage point higher.

In 2027, supply is forecast to grow 3.5-4.5% if the Strait of Hormuz is effectively closed, or 0.5 percentage points faster if it is open, as the trapped fleet in the Persian Gulf returns to the global market. Demand growth is expected to slow in 2027 under both scenarios and remain below supply growth. If the strait is effectively closed, demand is expected to grow 0.5-1.5%, while growth is projected to be 1.5 percentage points higher if it reopens.

“The arrival of El Niño is expected to boost dry bulk ship demand during the next twelve months. The Panama Canal may experience growing restrictions to ship transits, leading bulkers to seek alternative routes and thus lengthening sailing distances. The weather phenomenon is also leading to a weaker monsoon in India, which could limit electricity generation from hydroelectric power and thus support coal import demand,” says Gouveia.