Among reports emerging in the past few weeks, indications of growing imports of dry bulk commodities in many countries are still prominent. This evidence suggests that global seaborne trade in minerals, other industrial products and agricultural commodities could advance further over the next twelve months.
But negative international financial markets events recently, and figures pointing to slowing economic activity in a number of countries, cast a shadow. GDP growth during the 2011 second quarter was weak in Europe and the USA, while Japan’s economy has not yet started recovering after the natural disasters. If this weakness persists, forecasts of dry bulk trade may need to be revised downwards.
IRON OREDespite a possibility of slightly reduced imports into Japan, world seaborne iron ore trade in 2011 seems likely to increase robustly. Aided by resumed growth in China’s purchases, following last year’s downturn, the global total could be around 6% higher than seen over the previous twelve months at 1062mt (million tonnes), as shown in table 1.
Expectations of firm support for steel demand and production in Europe and Japan during this year’s second half are reflected in the outlook. Also of crucial significance is an assumed buoyant trend continuing in China. Imports by Chinese buyers, comprising over three-fifths of the entire global seaborne iron ore trade, may be about 7% higher at 660mt in 2011 as a whole.
COALImport demand for both steam coal and coking coal is benefiting from positive influences in many areas. Expanding usage in power stations and various other industries could raise steam coal movements by 5% or more this year. By contrast, steel industry demand for imported coking coal, amounting to about one-quarter of the overall total, is likely to grow at a much slower rate.
Overall seaborne coal trade is forecast to increase by 4% in 2011, reaching 988mt (table 1). Higher imports into a
number of Asian countries including India, South Korea and Taiwan are foreseeable, while Europe’s requirements also could rise. Japan’s volume in the year as a whole may decline, although a recovery from low monthly volumes in the second quarter can be anticipated. In China, it is not yet clear whether another annual increase will be recorded.
GRAINProspects for grain trade are not especially favourable. A sluggish growth mode continues, reflecting only limited extra import demand among buyers around the world. Global seaborne grain trade (wheat and coarse grains, plus soyabeans) is forecast to increase by about 2% this year, to 301mt.
Additional purchases by importers are most visible in the soyabeans sector, where rising volumes into China, Europe and other countries provide a boost for trade. In the much larger wheat and coarse grains sector, there is an absence of prominent features currently. Most importing countries have experienced relatively good domestic grain harvests, resulting in broadly unchanged needs for foreign supplies.
MINOR BULKSMovements of the many ‘minor’ commodities comprise about one-third of global dry bulk trade. The biggest part consists of industrial bulks, linked to construction and manufacturing industries, including bauxite/alumina, steel products, forest products and cement. Further growth in the entire sector of about 4–5% seems possible in 2011, although there is now more uncertainty about industrial activity in many countries during the months ahead.
BULK CARRIER FLEETA sharp slowdown in bulk carrier fleet expansion is now under way after last year’s extremely rapid surge. Newbuilding deliveries in 2011 are likely to be higher, and some forecasts suggest a larger volume than the 82m dwt total indicated in table 2. However, scrapping has accelerated and is predicted to offset a big proportion, at around 24m dwt. Consequently fleet growth seems set to slacken, while remaining very strong, at about 11%.
by Richard Scott, Bulk Shipping Analysis, Tel: +44 (0)12 7722 5784; Fax: +44 (0)12 7722 5784; e-mail: bulkshipan@aol.com