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| Global commodity trade |
Strait of Hormuz disruptions cut dry bulk trade significantly during the first half of 2026. Ocean-going dry bulk exports loaded west of the strait plunged by 87.5 percent year on year. Consequently, these logistical bottlenecks severely impacted metals, minerals, and agricultural supply chains across the Middle East.
Global traders faced escalating risks across the Red Sea and Black Sea corridors. Houthi militant attacks in the Bab al-Mandeb strait forced vessels to bypass traditional routes or face extreme delays. Furthermore, Russian attacks on Ukrainian ports drained Panamax liquidity and pushed freight rates to historic highs. Therefore, commodity supply chains suffered unprecedented transit delays and surging operational expenses.
Record High Scrap Demand in Saudi Arabia and Adaptive Trade
Primary steelmaking raw materials faced critical shortages across the Gulf region. As a result, demand for steel scrap surged to record highs in Saudi Arabia. Fastmarkets reported that the domestic composite price index for HMS 1&2 steel scrap delivered to Saudi Arabia hit a new peak of 1,810.59 riyals ($476) per ton.
Bulk carriers proved far more resilient than container ships amid the ongoing maritime conflicts. Chartering full bulk vessels allowed traders to maintain better control over cargo diversions and route negotiations. Meanwhile, agricultural trade adapted successfully as Brazil continued moderate corn and soybean exports to Iran.
ScrapInsight Commentary
Shipping crises on three fronts continue to inflate freight costs and restrict primary raw material flows to the Middle East.
Regional steel mills rely heavily on soaring local steel scrap demand to sustain operations amid crippled direct-reduced iron production.
These persistent logistical bottlenecks will force long-term structural realignments in global bulk shipping routes.
