Import demand for dry bulk commodities around the world still seems to be firmly on a moderate upwards trend, which could continue into next year and beyond. Prospects for additional seaborne trade in many commodities used by industrial processes are fairly encouraging. But signs of renewed growth in agricultural cargoes, particularly grain, are awaited.
The latest indications of economic output trends, with implications for dry bulk trade, show a mixed picture. Revised forecasts by the IMF, published a month ago, suggest that GDP growth rates in 2013 will be similar to last year’s sluggish or slow (in most countries) performances. In the advanced countries group (mainly USA, Europe, Japan and Korea) growth averaging only 1.2% is expected this year, but in China a slight improvement to 8% is predicted.
COAL
Global seaborne coal trade could experience another sizeable increase this year. Among importers just two countries, India and China, probably will account for a large part of the incremental volume, however. Elsewhere the outlook is less promising or, alternatively, unclear.
In the largest sector, steam coal, comprising about three- quarters of overall coal trade, growth of around 5% may be seen in 2013. Estimates for Asian importers are shown in table 1. A recent forecast by Australia’s Bureau of Energy and Resource Economics suggests a more cautious 30mt (million tonnes) or 3% global increase this year, to 988mt (including land movements, but mostly seaborne). In this outlook, Asia contributes all the annual world expansion.
IRON ORE
During the current year a limited strengthening of the global steel market may unfold, continuing into next year and benefiting trade in raw materials, iron ore and coking coal. Expectations were reinforced by publication last month of the World Steel Association’s short range outlook.
These projections point to global steel demand growing by 2.9% in 2013, an improvement compared with only a 1.2% rise in the previous twelve months. Of more
significance for bulk commodity trade is the regional breakdown. The WSA predicts a 3.2% steel demand increase in Asia, mainly reflecting a 3.5% rise in China. Japan by contrast could see a 2.2% reduction, while the EU’s performance may be almost flat.
GRAIN
Indications of how grain trade will develop over the remainder of this year and into 2014 will become gradually clearer in the next few months. Uncertainty is especially notable in the period leading up to domestic harvests in northern hemisphere countries. These harvests, which are not easy to forecast because of unpredictable weather, have a large impact on import requirements.
The latest International Grains Council forecast for the current 2012/13 crop year, ending June, shows a global wheat and coarse grains trade reduction of 11mt (4%), to 259mt. Weakness among importers is widely spread although declines in north and sub-saharan Africa, and Mexico are prominent. At present there are no obvious reasons for expecting a sharp rebound in 2013/14, but lower prices (if the recent trend is sustained) could promote extra purchases.
MINOR BULKS
Seaborne trade in minor bulk commodities includes large quantities of a variety of agricultural products. Movements of oilseeds (excluding soyabeans) and meal, rice and sugar plus fertilizer raw materials and semi-finished products apparently totalled around 330mt last year, a huge volume. Some further growth is envisaged during 2013.
BULK CARRIER FLEET
After more than doubling in size over the past five years, one segment of the bulk carrier fleet is likely to see a sharp deceleration this year. The Capesize fleet’s deadweight capacity may increase by a relatively slow 6%, as shown in table 2. A steep fall in newbuilding deliveries, coupled with relatively high scrapping seems likely to greatly moderate the expansionary trend.