TThe ongoing uncertainty surrounding the Strait of Hormuz is impacting the Panamax dry bulk sector. According to recent media reports, a possible two-week extension of the ceasefire discussions is being considered, although this remains unconfirmed at the official level.
In this context, Signal Ocean data shows that the number of Panamax vessels in ballast within the strait has remained stable at around 30 (shown in the chart below), while the number of loaded vessels has fallen sharply from its highs in late February. This difference indicates delays arising in the loading or transit of ships operating in the region amid the ongoing disturbances.
Scheduled ship deliveries are highest since 2014
Panamax vessel shipments are expected to reach a record level in 2026, with approximately 15 million DWT of new capacity entering the market, up from approximately 10-11 million DWT the previous year. This expansion is expected to push the global dry bulk fleet to approximately 220 million dwt, promoting a clear supply-side growth cycle.
This increase in fleet capacity comes in light of stable expectations for coal demand. According to forecasts in the IEA’s Mid-Year Coal Update (July-December 2025), global coal demand is expected to reach a record high of 8.85 billion tonnes in 2025, before falling slightly in 2026 and stabilizing near 8.7-8.8 billion tonnes.
Coal Demand Forecast: Policy Shifts and Market Pressures
Energy mix trends
The recent trend in coal demand reflects structural changes in the global energy mix, especially in China and India, which together account for the majority of consumption. While both countries are working to broadly expand renewable energy capabilities, coal continues to play a central role in energy security. This results in a dual-track approach, combining the continued use of coal to stabilize the system with continued investment in renewables.
Chinese market dynamics
In China, recent developments indicate a gradual shift. While previous data indicated a slowdown in coal plant approvals, geopolitical developments have strengthened coal’s role as a reliability barrier. At the same time, policymakers continue to push a broader shift toward renewables and nuclear power. Domestic coal production remains a priority, limiting increased demand for imports.
Indian market dynamics
In India, policy has moved more decisively towards reducing reliance on seaborne coal. The government aims to reduce thermal coal imports by approximately 30% in 2026, and replace imports with increased domestic production. Meanwhile, coal power plants are running at full capacity during periods of peak demand, indicating higher utilization without a corresponding rise in imports.
Short-term driving factors
Recent geopolitical developments in the Middle East have led to short-term volatility in energy markets, tightening gas supplies and prompting a temporary fuel shift toward coal in some regions. At the same time, these developments are accelerating investment in renewables and broader energy security measures.
Demand forecast
If turmoil in energy markets continues, coal demand may see a modest boost in the short term, which could offset part of the expected decline in 2026. However, policy direction in major consuming countries suggests that any increase is likely to remain cyclical rather than structural, with demand stabilizing in the long term rather than returning to sustainable growth.
Will ship orders continue to increase…?
Geopolitical tensions in the Middle East are likely to keep Asian buyers focused on energy security, slowing efforts to reduce dependence on coal imports. This may provide some short-term support for coal demand, although the broader trend still points to a more stable demand profile, rather than growth, as the energy transition continues.
Meanwhile, new-build prices have recently moved in line with used goods prices, with a 5-year-old Panmax truck worth around $37 million. This shift may begin to support new construction orders compared to used purchases, although order activity remains sensitive to geopolitical market conditions.
Against this backdrop, the key question remains whether the recent momentum in orders can be maintained, with the market continuing to monitor oil prices, potential supply disruptions, and continued uncertainty over refueling in the Arabian Gulf.
Source: Signal Ocean
