GMS Week 43 – Freight Refuses to Stay Down

Week 43 of 2026 provided mixed signals for the recycling market, despite a brief rally in freight rates. The Baltic Dry Index rebounded from 2,545 on October 15 to 2,693 on Thursday, October 22, driven by stronger Capesize earnings. However, this recovery was short-lived, as broader market developments raised concerns about shipping risks and insurance costs.

Oil supply disruptions due to renewed Houthi attacks in Saudi Arabia contributed to the upward pressure on oil prices, with Brent crude surpassing USD 115 per barrel and WTI climbing above USD 100. These elevated energy costs have continued to disrupt normal trading patterns, making it difficult for ageing tankers to justify retirement over recycling.

The recovery in dry bulk markets was uneven, with Capesizes strengthening to 3,848 and Supramaxes advancing to 1,890. However, Panamax vessels declined to 2,151, reflecting the unique challenges faced by different vessel segments. Despite a one-week decline in freight rates, buyers remain cautious, reminding themselves that such optimism can vanish just as quickly.

Steel markets provided little common direction, with Indian plate strengthening while Bangladesh, Pakistan, and China remained flat. Domestic finished-steel consumption continued to disappoint across much of the subcontinent, limiting the positive impact of stable steel quotations. Turkey weakened slightly against the international market, but its central bank reduced interest rates to offer modest financing relief amid currency pressures.

Physical waterfront activity remained steady, with Alang receiving additional general cargo and reefer tonnage, Chattogram completing several smaller vessel deliveries, and Gadani welcoming another secured bulker. However, these movements did not indicate a significant improvement in fresh recycling sales.

While ships are arriving at the beaches, the next pipeline of recycling candidates remains far from full. Bangladesh showed the strongest conventional buying appetite, though suitable candidates are still limited. Pakistan demonstrated healthy underlying demand with greater purchasing discipline, while India benefited from specialist opportunities and improving local steel conditions. Turkey remained cautious due to weak domestic consumption restricting buying enthusiasm.

Overall, the final quarter of 2026 is unfolding much as it did at the beginning of the year. Buyers are seeking tonnage that owners are still hesitant to release. Freight rates have recovered, but steel markets offer mixed support, and recycling demand remains largely intact. The beaches are ready for more business, but the ships are still holding out for a different outcome.