We spoke with Signal Group senior market analyst Maria Bertzeletou about the latest developments in global maritime shipping and freight markets, the impact of the geopolitical crisis in the Middle East, and shifting trade flows.
How would you assess the current state of the global shipping and freight markets? What have been the main factors influencing freight rates and shipping activity recently?
Global freight markets remain highly sensitive to geopolitical developments, with significant differences between tanker and dry bulk shipping. The Middle East crisis continues to affect vessel movements, insurance costs and port operations, while disruptions in the Black Sea, changing Chinese steel demand and shifts in grain and coal trade are influencing dry bulk freight.
The Strait of Hormuz remains a major source of uncertainty for international shipping. Repeated attacks on commercial vessels, elevated war-risk insurance premiums and restrictions affecting regional transportation have increased operating costs and complicated voyage planning. In dry bulk, Signal Ocean monitoring recorded 265 vessels waiting across 29 selected Arabian Gulf and Gulf of Oman ports on October 28, illustrating the extent of regional vessel congestion.
Freight rates are also responding to changes in regional vessel supply. An increase in ballasting vessels can place pressure on rates even when cargo demand remains relatively firm. In the Atlantic dry bulk market, the positioning of vessels approaching loading regions remains particularly important for Panamax, Supramax and Handysize freight.
The principal factors influencing shipping activity are therefore geopolitical security, commodity demand, trade restrictions, voyage duration and vessel availability. The distance travelled and the time vessels remain employed are becoming increasingly important in determining freight market conditions.
How has the ongoing geopolitical crisis in the Middle East affected maritime transportation? What changes have you observed in shipping routes, freight rates and delivery times in particular?
The Middle East crisis has significantly increased the cost and operational risk of maritime transportation, particularly through the Strait of Hormuz. Its impact extends beyond freight rates to war-risk insurance, vessel availability, port congestion and the reliability of cargo deliveries.
Security incidents have continued throughout October. According to publicly available figures in October (October 23), 28 confirmed and reported attacks on commercial vessels had been recorded in the Strait of Hormuz and surrounding waters during the month. More than 30 very large crude carriers (VLCCs) had reportedly been damaged since the conflict began, including 11 during October. On October 13, several commercial vessels were struck, including the Singapore-flagged container ship GFS Pride, which subsequently sank.
War-risk insurance has become a high additional cost for shipowners and charterers, although premiums differ considerably between the Middle East and the Black Sea. For Strait of Hormuz transits, reported high-risk quotations have reached approximately 3-10 percent of insured vessel value, compared with around 0.15–0.25 percent before the conflict. In the Black Sea, insurance brokers reported premiums of 0.4-1 percent for transits towards Romania and Bulgaria, averaging approximately 0.5 percent as of October 26. However, the exposure is considerably higher for certain Ukrainian and Russian port calls, where quotations have reached 5-15 percent or more, depending on the destination. For a vessel insured at $100 million, a three percent premium represents $3 million, compared with $500,000 at a 0.5 percent rate. These differences illustrate how security risks, port destinations, and vessel characteristics increasingly influence voyage economics, with additional costs potentially affecting freight rates and the competitiveness of steel and raw material shipments.
The operational consequences are also visible in dry bulk shipping. Signal Ocean data recorded 265 dry bulk vessels waiting across 29 selected Arabian Gulf and Gulf of Oman ports on October 28. Fujairah accounted for 74 vessels, approximately 28 percent of the regional total, followed by Sohar with 50. Supramax vessels represented the largest segment, with 107 waiting vessels, equivalent to 40 percent of the total.
The concentration of waiting vessels at Fujairah and Sohar is particularly relevant for Supramax and Handysize shipping, which serves regional trades in steel products, construction materials and other minor bulk commodities. Vessels delayed at these ports remain unavailable for subsequent employment, potentially tightening prompt tonnage supply across the Arabian Gulf and nearby Indian Ocean markets. At the same time, shipowners assessing new Arabian Gulf fixtures must account for war-risk insurance, uncertain port turnaround times and the possibility of delayed repositioning. These additional costs may be reflected in freight negotiations, although the extent of any rate increase will depend on cargo demand and the availability of alternative tonnage. For steel importers, the commercial impact is therefore concentrated on the delivered cost and timing of shipments rather than a uniform increase in freight rates.
How are developments in the Middle East reshaping global trade flows, particularly shipments from the Far East? Do you think these disruptions could create new competitive advantages or trade opportunities for steel producers and exporters in certain regions?
China remains a major supplier to international steel markets, with finished steel exports reaching 10.49 million tonnes in September 2026, up 3.3 percent from August and marking the fifth consecutive month above 10 million tonnes. January-September exports totalled 85.64 million tonnes, down 2.6 percent year on year. Despite the annual decline, the recovery in monthly shipments shows that Chinese steel continues to compete strongly in overseas markets.
The Middle East disruption is particularly visible in the supply chains of Arabian Gulf steel producers. Industry reports have identified difficulties delivering direct reduction-grade iron ore pellets to Gulf steelmakers, affecting direct-reduced iron production. In the UAE, steel processors have increasingly relied on Fujairah for deliveries outside the Strait of Hormuz. However, congestion at Fujairah and the additional cost of inland transportation from alternative ports, including Sohar and Duqm in Oman, have complicated raw material supply. The commercial decision has increasingly centred on the cost of waiting for a shipment against the expense of moving material overland from another port.
These disruptions are affecting both finished steel imports and the raw materials required for regional steel production. They also highlight a distinction between Far Eastern exporters supplying the Gulf and steel producers operating within it: imported finished steel faces shipping and discharge constraints, while regional mills face additional difficulties securing production inputs. The available evidence does not yet establish a sustained shift in steel market share towards Turkey or Mediterranean exporters, although access to alternative ports and established distribution networks has become more important in securing deliveries.
A comparable adjustment is occurring in the Black Sea. Russian steel exporters have been redirecting cargoes from southern ports towards the Baltic, but railway capacity and port-handling limitations are restricting this alternative. According to reporting published on October 24, Russian steel shipments through Azov Sea-Black Sea ports totalled approximately 6 million tonnes during January-August 2026, while monthly shipments fell from 1.86 million tonnes in July to 860,000 tonnes in August. The diversion has increased pressure on northwestern railway connections and Baltic terminals, demonstrating that replacing a disrupted export corridor involves additional logistical constraints rather than simply changing the port of loading.
What are the key trends you are currently observing in global steel and raw material shipments? How would you assess the impact of changing steel demand, trade restrictions and geopolitical developments on dry bulk shipping?
China's iron ore imports have remained strong despite weaker domestic steel production and continued pressure from the property sector. During January-September 2026, imports reached 954.97 million tonnes, up 4.1 percent year on year, with September volumes at 109.82 million tonnes. However, higher imports should not be interpreted as an equivalent recovery in steel demand, given inventory accumulation and weaker construction activity. For Capesize freight, Brazilian iron ore exports remain particularly important. The Brazil-China C3 route involves substantially longer voyages than Western Australia-China, absorbing more vessel capacity per shipment. Recent differences in export activity between Vale's Tubarão and Ponta da Madeira terminals also underline the importance of monitoring individual loading ports rather than treating Brazilian iron ore exports as a single market.
Black Sea steel shipments have contracted sharply. Signal Ocean seaborne data indicate that volumes fell by 65.6 percent year on year in the third quarter of 2026, to approximately 650,000 tonnes across 51 voyages. January-September shipments totalled 4.65 million tonnes, down 31 percent, across 314 voyages. Smaller bulk carriers remain central to this trade, with Handysize and Supramax vessels handling much of the regional steel movement. Ukrainian steel shipments were particularly concentrated in smaller bulkers, while Russian steel cargoes were predominantly carried by Supramax and Handysize vessels. Continued security risks and logistical restrictions have also encouraged Russian exporters to redirect some shipments towards Baltic ports, increasing reliance on rail connections and alternative export terminals.
Grain trade has provided a contrasting source of dry bulk activity. During the week ending October 15, US soybean export inspections destined for China reached 682,779 tonnes from the Pacific Northwest across 10 vessels, the highest weekly total since November 2024. This compared with just under 600,000 tonnes across nine vessels from the US Gulf. The distinction matters for Panamax and Kamsarmax employment: Pacific Northwest shipments support Pacific vessel demand, while US Gulf loadings generate Atlantic employment. Where Gulf cargoes are routed around southern Africa rather than through the Panama Canal, the longer voyage increases vessel employment time, although this depends on actual routing decisions.
Coal trade presents a different picture. In October, Chinese authorities urged the resumption of suspended coal mines in Shanxi and the identification of additional emergency production capacity, reinforcing efforts to strengthen domestic supply. India has similarly prioritised domestic coal production, limiting the scope for sustained import growth where local supply can meet requirements. Indonesia's preparation of its 2027 coal production quotas, with submissions due by November 15, adds uncertainty over future export availability. These developments are particularly relevant for Panamax and Supramax demand on Indonesia-China and Indonesia-India routes.
What is your outlook for global freight markets in the coming months? If geopolitical uncertainties persist, what do you see as the main risks and opportunities for steel trade and maritime transportation?
For the remainder of 2026 and early 2027, freight market direction will depend on whether cargo demand can absorb available vessel capacity, particularly in the Atlantic, and whether security conditions allow more predictable shipping operations in the Middle East and Black Sea.
For steel exporters, the principal risk is the loss of competitiveness in destination markets where additional insurance, freight and inland transportation costs raise delivered prices. Continued disruption could also encourage buyers to reconsider shipment origins and contract arrangements, particularly for steel products requiring regular deliveries. However, alternative suppliers cannot necessarily replace established trade flows quickly, given differences in product specifications, production capacity and trade restrictions.
In dry bulk, the Atlantic market offers some support from US grain exports and Brazilian iron ore shipments. The critical factor for Panamax and Supramax freight will be whether additional cargo enquiries translate into confirmed fixtures faster than ballasting vessels return to loading regions. For Capesize shipping, sustained Brazilian iron ore exports to China would support longer-haul employment, although the distribution of cargoes between Brazilian terminals and Australian suppliers remains important.
The Black Sea outlook is more constrained. Further disruption to export infrastructure or railway connections could limit steel shipment recovery and restrict employment opportunities for smaller bulk carriers. For Mediterranean steel importers, this increases the importance of assessing alternative supply origins against their delivered cost rather than freight rates alone.
A sustained improvement in Middle East security conditions would gradually reduce voyage uncertainty and release vessels currently delayed or committed to longer trading arrangements. This could ease freight pressure in affected routes, although the adjustment would depend on how quickly port operations and vessel schedules normalise. Conversely, continued disruption may support rates in selected markets through reduced effective vessel availability, without necessarily producing a broader freight recovery.
The main distinction in the coming months will be between freight markets supported by actual cargo growth and those where elevated transportation costs primarily reflect geopolitical risks. For steel trade, competitive advantages will depend increasingly on reliable market access and delivered prices, rather than proximity to destination markets alone.
