Dry Bulk Markets Buckle Under Renewed Strait of Hormuz Tensions and Black Sea Disruptions

The dry bulk markets are facing renewed risks from conflicts in key regions and escalating disruptions to global supply chains. The Strait of Hormuz, a critical shipping lane between Iran and the Arabian Gulf, has seen tensions rise again, affecting freight costs and iron ore prices. Despite this volatility, fundamentals are softening due to weak demand and high inventories.

Iron ore rebounded above $100/t as renewed tensions in the Strait of Hormuz lifted freight costs. However, Chinese seaborne imports fell sharply to 18.01Mt in the week ending July 12, down 28% w/w and 30% y/y. Shipments from major producers like BHP, Vale, and FMG declined.

Coal markets benefited from stronger gas prices and tighter Indonesian supply, while India's domestic coal stocks fell below 40Mt for the first time since Q2 2025 due to record coal burn driven by heatwaves outpaced domestic supply. Utilities have so far offset the drop in stocks with higher domestic production.

The escalating Russia-Ukraine conflict has limited Black Sea wheat exports, as Ukraine targeted over 100 vessels involved in Russian activity. Commercial vessels within the Sea of Azov and the Kerch Strait were suspended by Russian authorities on Friday.