Acute shipping disruptions across three major transport routes are severely hampering commodity supply chains and significantly increasing both prices and delivery times across key markets, according to sources cited by Fastmarkets. The Strait of Hormuz, Red Sea, and Black Sea have become flashpoints for logistics crises that are reshaping trade patterns for metals, minerals, and agricultural products. Ocean-going dry bulk exports loaded west of the Strait of Hormuz plummeted by 87.5 percent year-on-year to 5.8 million tonnes across all dry cargo types in the 22 weeks following the start of hostilities between Iran and the United States on February 28, according to research from URSA Shipbrokers using AXSMarine vessel-tracking data.
The strait is a critical export channel for limestone, fertilizers, and fertilizer raw materials such as urea and sulfur. However, URSA cautioned that the data should be treated with care, citing GPS jamming, AIS spoofing, and vessels going dark as factors potentially limiting the accuracy of vessel tracking data. From July 21 through July 29, there were just 21 bulker transits through the Strait of Hormuz, comprising 14 exits and 7 entries, according to trade intelligence firm Kpler.
Despite the sharp drop in tracked volumes, a trading source active in the region indicated that commercial dry bulk cargoes were still moving through the strait on a selective basis, with incomplete enforcement effort by both sides. Cargoes that managed to move included Iranian iron ore volumes, along with gypsum and fertilizers from other countries in the region, according to a shipbroker source. The situation is further complicated by Houthi militant attacks on vessels in the Bab al-Mandeb strait of the Red Sea.
Workarounds such as exporting steel products or raw materials to western Saudi Arabian Red Sea ports like Jeddah, Rabigh, or Yanbu and trucking cross-country have become expensive and unreliable. For vessels routing cargo from Red Sea ports eastward, the only safe passage is through the Suez Canal to the north and around the Cape of Good Hope, which can add another month to shipping times for destinations such as Taiwan, according to Neil Quilliam, policy specialist at UK think tank Chatham House. Escalating Russian attacks on Ukrainian ports in the Black Sea have created additional vessel availability problems.
The freight rate for Russia-Saudi Arabia Panamax routes was assessed at $49 per tonne on Wednesday, up from $37 per tonne two months earlier. UK scrap exporters are facing a rise of $500 per 20-foot container on August sailings to India and Pakistan. Freight rates on open routes have risen so dramatically that some market participants are purchasing vessels rather than exiting the trade.
These shipping disruptions have directly impacted commodity markets. Saudi Arabia produced 321,162 tonnes of direct-reduced iron (DRI) in June 2026, representing a month-on-month decrease of 9.8 percent and a year-on-year decrease of 46.3 percent from 598,097 tonnes in June 2025, according to the World Steel Association. Few vessels carrying direct-reduction pellets have been able to enter Gulf states, hitting output for DRI, a key raw material for steel mills.
Most DRI plants are operating at 30-40 percent capacity, according to sources. With primary steelmaking raw materials in short supply, demand for steel scrap has surged. Fastmarkets' weekly price index for steel scrap HMS 1&2 index, domestic composite, delivered Saudi Arabia, was 1,810.59 riyals ($476) per tonne on Tuesday, up from 1,808.46 riyals per tonne on July 21, and hitting a new record high.
Ukrainian pellet supplier Ferrexpo stated on Tuesday that it does not expect it can load additional vessels via the Black Sea export route for the foreseeable future due to ongoing drone and missile attacks. The Southern Mining and Processing Plant, a major iron mining complex in Kryvyi Rih, Ukraine, co-owned by Metinvest, was forced to temporarily suspend operations, with several shiploads of iron ore intended for export accumulating at ports and in storage. Iron ore exports from Iran have also reportedly ground to a halt since April.
Bulk carriers have proven more resilient than container shipping, according to sources. With bulk shipments, traders have more control through full vessel charters and can negotiate terms. Container lines retain the right to divert cargo to alternative ports, leaving traders to arrange onward collection and additional inland transport.
One exception to the broader disruption has been Brazil's continued exports of agricultural products to Iran. Brazilian customs data showed Brazil exported 1.46 million tonnes of corn from January to June to Iran, versus 2.3 million tonnes a year earlier. Soybean shipments were less disrupted, with Brazilian exports to Iran hitting 1.17 million tonnes in the first half of the year, versus 1.2 million tonnes a year earlier.
Market participants face considerable uncertainty going forward. Sailing times from Iran to China are about 25 days, according to a trading source, who noted that conditions had been manageable through the first phase of disruption but were less predictable as the strait faced new closures.
Source: fastmarkets.com