GMS Week 37 – ROUTES TIGHTEN, BIDS RISE!

Last week, the Gulf witnessed renewed shooting, while this week the risk expanded westward. Houthi forces seized Mocha and Mayun Island in Bab al-Mandab, intensifying pressure on Red Sea routes while Hormuz maintained operation albeit far from normal. For commercial shipping, factors such as passage, insurance, security, and delay remained the primary considerations.

Nevertheless, one chokepoint had not recovered before another tightened. Oil prices responded accordingly, with Brent surpassing USD 107 per barrel and WTI exceeding USD 103 early Friday, driven by heightened concern over the additional threat to Middle East exports and transit. This surge in energy costs and altered routing bolstered earnings prospects for vessels that might otherwise have transitioned towards the coastlines.

Dry freight continued to pose the most significant constraint. The Baltic Dry Index stood at 3,521 on Thursday, with Capesizes at 6,122, Panamaxes at 2,409, and Supramaxes at 1,713. Despite easing from this week's peaks, the index remained at levels that kept aging bulkers trading, while second-hand values offered owners another exit before recycling.

The beaches were competing against both daily earnings and asset values, neither of which were currently aiding supply. The macroeconomic landscape was volatile, with U.S. August CPI remaining steady at 3.4% year-on-year, monthly growth accelerating to 0.4%. The Indian Rupee depreciated to 95.79 against the Dollar, reversing most of last week's gains, while the Pakistani Rupee settled near 277.35, and Bangladesh Bank's latest reference rate hovered around 123.14.

The Turkish Lira weakened to 48.6, and the Turkish Central Bank (TCMB) maintained its policy rate at 37% on Thursday. India's currency tailwind from the previous week had largely dissipated. On the beaches, scarcity was finally prompting competition to rise. Several smaller dry bulk sales emerged this week, with Bangladesh's market benefiting the most from the scarcity after underperforming recently.

Chattogram buyers showed renewed vigor as viable options emerged. Pakistan retained its leading position as a destination, though August's urgency was absent. India continued to extract strong performance from specialist and non-ferrous-rich tonnage rather than conventional steel ships. Physical waterfront activity was improving, with Chattogram receiving fresh arrivals in its current tide period, Gadani welcoming three additional bulkers, and Alang accommodating a significant general cargo arrival.

However, the critical distinction remains that much of the tonnage reaching the beaches was secured earlier, and today's freight and second-hand markets were still preventing the next recycling cycle from being replenished adequately. Consequently, Pakistan held the lead, Bangladesh intensified its bidding due to the need to feed its yards, and India maintained activity through its specialist lane despite a weaker currency.

Fresh sales returned, but they were not enough to loosen candidate scarcity. Owners still had earnings, resale options, and time on their side. Ships could trade, so the beaches had to pay. For Week 37 of 2026, GMS Market Rankings/Vessel indications are as follows, sourced from GMS,Inc.