Dry bulk companies posted strong earnings results in the second quarter of 2026 on the back of robust freight markets. Despite geopolitical tensions, the market has been borne up by strong fundamental demand and a balanced supply side, which has also benefited from trading inefficiencies elsewhere in the market. The third quarter is expected to bring similarly strong TCE results for dry bulk shipping companies, though it is worth questioning how long the freight markets can hold up.
From strength to strength in earnings
The Tidewake TCE composite for listed dry bulk companies ticked up once again in the second quarter of 2026, based on companies that had reported results as of the end of August 2026. Across the companies, TCE performance increased on average by 25% from the first quarter — typically the seasonal low point in the dry bulk market — reaching a new multi-year index high. Compared to the second quarter of 2025, TCE levels were also up significantly, by approximately 60% on average.
Dry bulk time charter (TCE) levels continue to increase in 2026
Indexed composite, Q1 2023 = 100
- Realised composite
- Q3 2026 base case
- Upside
- Downside
Source: Tidewake.io
Note: Q3 2026 estimate is based on public forward guidance from larger dry bulk owners as well as a general assessment of market sentiment.
The second quarter of 2026 brought significant geopolitical turmoil, with continued tension in the US–Iran conflict and resumed attacks in the Red Sea. While such conflicts can introduce inefficiencies into dry bulk markets, it was not necessarily these conflicts that drove the strong earnings levels seen in the second quarter.
The market was instead driven by a robust demand picture, with healthy commodity exports underpinning the strength. In the larger dry bulk segments, including Capesize and Panamax, iron ore exports out of Brazil contributed to strong demand alongside healthy bauxite exports from West Africa. Coal demand also proved more resilient than expected in parts of the market, lending some support to fixtures, even as broader thermal coal trade remained mixed. In contrast, the Supramax and Handysize segments saw less extraordinary earnings, but still held up well and rose from the seasonal dip seen in Q1.
Outlook for Q3: the persistence puzzle
Based on forward guidance from some of the larger dry bulk companies, Tidewake expects TCE levels to persist into the third quarter of 2026. Barring any sharp reversal in freight levels, TCE is likely to hold firm or even increase by approximately 10% into Q3, as companies fix forward at elevated levels. Companies particularly tilted toward Capesize are expected to perform well this quarter.
At the same time, there is a puzzle over how persistent this strength can be. Earnings have already hit multi-year highs in 2026, without the market even having entered the traditional seasonal highs of Q3 and Q4. As Capesize earnings continue to pull ahead, there is also increasingly a cargo-splitting risk with Panamax tonnage that could also put a damper on freight levels.
At the macro level, economic growth prospects could start to fade on the back of unusually elevated geopolitical tension, with direct consequences for global commodity demand. In addition, the spectre of inflation and rising bond yields in the US continues to lurk in the background, weighing on sentiment in equity markets.
While the iron ore trade is expected to hold up in the coming quarters, underpinning strength in the larger segments, vessel contracting has also started to pick up, creating longer-term issues for the market. As long as earnings remain strong, this wave of ordering is likely to continue in the coming quarters and may start to weigh on the long-term sentiment of the dry bulk market.
