DDisruption in trade patterns and cargo demand may be on the horizon for dry bulk shipping. In its latest weekly report, shipbroker Xclusiv said, “The global bulk market is bracing for a period of extreme climate-driven disruption. The National Oceanic and Atmospheric Administration (NOAA) has increased its forecast to an 82% probability of an El Niño developing between May and July 2026, with a 37% increased probability of an extreme event by the end of the year. This meteorological shift is expected to reach peak intensity between the fourth quarter of 2026 and And the fourth quarter of 2026.” While environmental and operational fluctuations pose distinct structural challenges to supply chains, historical data confirms that major El Niño events consistently lead to significant increases in dry bulk freight rates, strongly shifting the market balance in favor of shipowners.
Source: Exclusive
According to 2026, immediate infrastructure pressures are already there and exacerbating these systemic climate risks is that average waiting times in the Panama Canal have risen to 47.9 hours this month – 60% higher than pre-war baseline levels – while scheduled maintenance of the dry room on the Gatun Locks next June will reduce available daily slots to just 16 crossings.
The intersection of infrastructure maintenance, geopolitical bottlenecks, and climate anomalies will drive critical structural shifts across major ship asset classes. In the short term, during the second and third quarters of 2026, an extremely hot Asian summer combined with a weaker Indian monsoon is expected to cause a domestic hydropower deficit, increasing immediate demand for seaborne thermal coal imports. This will greatly benefit the Capesize and Kamsarmax tonnage operating across the Pacific Basin. At the same time, agricultural trade patterns are shifting. The expected decline in Australian wheat production will force Asian buyers to replace volumes with long-haul grain exports from Brazil and Argentina, providing a material boost to Kamsarmax and Panamax demand per tonne-mile. More importantly, restrictions on canal transit will force record US Gulf grain shipments to bypass the Panama Canal entirely, and reroute around the Cape of Good Hope. This operational transformation increases transit times by up to 50%, tightening effective fleet supply and expanding global ton-mile demand.”
Source: Exclusive
The shipbroker added, “For the buy and sell (S&P) market, this structural supply deficit arrives at a time when freight forward agreements (FFAs) are showing elastic long-term curves, with Capesize curves maintaining a flat outlook for the rest of the year. Buoyed by rising Rotterdam VLSFO prices trading at around $768 per metric ton, fuel efficiency remains paramount for long-haul operations. As a result, buyer sentiment is squarely focused on the recent environmental tonnage across the In the market and rising freight rates are not the only factors driving the market; bulk owners have enjoyed continuous and healthy cash flows for several years in a row, and this extended period of profitability has allowed a large number of owners to pay down their debts aggressively by significantly reducing their balance sheets, effectively lowering their break-even levels and expanding their profit margins. There is no pressing need or desire to sell, as sellers remain fixed on their asking prices, providing a solid footing that supports used asset values, thus, Institutional buyers looking to secure a quick load before a winter El Niño rally will find a very defensive market with tightly held price levels.
Nikos Rousanoglou, Global Hellenic Shipping News
