China’s latest policy changes and shifting raw material dynamics are setting the stage for new market conditions in the dry bulk shipping sector as 2026 begins. According to shipbroker Intermodal, both steel export controls and iron ore inventory trends are reshaping trade flows and vessel demand.
From 1 January 2026, China introduced export licensing requirements across a broad range of steel products, adding documentation, lead time, and compliance costs to outbound shipments. While not an outright export cap, the new framework discourages low-margin, high-volume flows and favors higher-value, better-documented steel products.
The immediate impact was visible at the end of 2025, as exporters rushed cargoes out ahead of the new rules. December steel exports reached a record 11.3 million tonnes, pushing full-year shipments to 119 million tonnes and underscoring how heavily exports have been supporting the domestic steel sector.
With domestic demand still constrained by weakness in China’s property market, exports have acted as a release valve for excess capacity. The new licensing regime does not close that outlet, but it is likely to reduce overall volumes and shift the mix toward fewer tonnes with higher unit value.
For dry bulk shipping, the greatest exposure lies in the geared segments, particularly Supramax and Handy vessels that carry most seaborne steel. Any moderation in export flows could quickly soften utilization and rates, especially on backhaul routes into Southeast Asia during the seasonally weaker first half of the year.
Iron ore dynamics point in a different direction, with Chinese port inventories climbing to around 155 million tonnes after record imports in 2025. High stock levels reduce near-term urgency for spot cargoes and make mills more price-sensitive as they draw down existing supplies.
At the same time, new high-grade supply from Guinea’s Simandou project could reshape trade patterns rather than cut demand outright. Longer Atlantic-to-China voyages may support Capesize tonne-mile demand even as near-term restocking slows.
Taken together, 2026 opens with softer visibility for geared bulk carriers tied to steel exports, while the outlook for Capesize vessels hinges on inventory trends and shifting trade lanes. China’s evolving policies are not shrinking the market, but they are clearly changing how — and where — bulk cargo moves.
