China has started 2026 with two signals that matter for bulk shipping in different ways. One is policy-driven and hits steel trade flows directly. The other is balance-sheet driven and shows up first in iron ore restocking behaviour.
On the steel side, the introduction of export licensing from 1 January 2026 marks a clear change in how outbound steel trade is managed. A broad range of products across the steel value chain now require shipment-specific approval, supported by export contracts and manufacturer quality documentation. This does not represent a formal export cap, but it adds cost, lead time, and administrative friction to what had become an exceptionally fluid export channel over the past two years. As a result, the mechanism is designed to make low-margin, high-volume flows harder to push through, while higher-value, better-documented products remain easier to justify. That naturally pulls the market away from quantity. The immediate impact was visible into year-end. December 2025 steel exports reached 11.3 million tonnes, the strongest month on record, and full-year exports hit 119.02 million tonnes as cargoes were pulled forward ahead of the new regime. Against that backdrop, the more interesting question for shipping is not whether licensing “bans” exports, but what it does to the mix. That surge matters because exports have been doing much of the balancing work for the industry. Domestic steel demand remains under pressure, with the property sector still acting as a structural drag and total consumption continuing to trend lower. In that environment, exports became the primary release valve for excess capacity. The new licensing framework does not eliminate that outlet, but it does reshape it. Low-margin, highvolume products become harder to justify once each shipment carries incremental compliance cost, while higher-value or more processed steel can better absorb the burden. The direction of travel is therefore toward fewer tonnes and higher unit value, rather than a simple continuation of record volumes.
For dry bulk, the exposure is most acute in the smaller geared segments. The bulk of seaborne steel moves on geared vessels, with Supramax accounting for the largest share. Any moderation in export volumes disproportionately affects backhaul demand out of China, particularly into Southeast Asia and other nearby markets where low-value products dominate. Even a partial pullback from 2025’s exceptional levels would be enough to soften utilisation and rates in these segments, especially in the first half of the year when seasonality is already working against cargo availability.
Iron ore presents a different dynamic. Here, the near-term signal is inventory. Portside stocks have climbed to around 155 million tonnes, close to historic highs and near the levels last seen during the 2018 peak. High port inventories do not automatically mean imports collapse, but they do change the rhythm; mills can run down port piles first, spot cargo urgency fades, and spot buying becomes more price-sensitive. That is especially relevant after 2025 imports reached about 1.26 billion tonnes, with December alone at 119.65 million tonnes. Looking further ahead, grade and trade-lane effects complicate the picture. Market talk is increasingly focused on how grade preferences and trading behaviour are shifting as mills stay cost-sensitive and as portside and seaborne markets interact more tightly. Simandou reinforces that theme. The first Simandou cargo, nearly 200,000 tonnes, has already arrived in China after a 46-day voyage, and the project is marketed as high-grade ore around 65% Fe with a nameplate ramp toward 120 million tonnes per year. Could more high-grade supply reduce China’s total iron ore volume requirement at the margin? Directionally, yes; higher Fe content means fewer gross tonnes for the same contained iron, assuming the mill can use the grade efficiently in its blend. But the bigger shipping implication is not “less tonnage” so much as “different tonne-miles”. A Guineato-China flow is structurally longer than Australia-to-China, so even a modest substitution can support Capesize tonne-mile demand, while the near-term inventory overhang and any steel output discipline work the opposite way.
Netting it out, 2026 starts with softer visibility for Supramax/ Handy steel-export demand because policy is adding friction exactly where volumes had been doing the heavy lifting. For Capes, the call hinges on whether elevated port stocks translate into a sustained slowdown in restocking, or whether new high-grade Atlantic supply simply reshuffles trade lanes rather than shrinking the pie.
Data Source: Intermodal