Further downgrading of forecasts for key economies provides a sombre backdrop. Updated estimates, published last month by the OECD organization, showed 3% world GDP growth in 2016, no higher than seen last year and the joint slowest pace in the past five years. Despite a vast amount of monetary stimulus, achieving a more robust pace of economic activity remains elusive in numerous countries.
IRON ORE
During the year ahead growth in world seaborne iron ore trade looks likely to be very modest, and some forecasts point to the possibility of a decline. Calculations shown in table 1 indicate a one percent rise, to 1,372mt (million tonnes), assuming that China’s imports, comprising more than two- thirds of the total, increase marginally. Potential for larger volumes among other key importers seems quite limited.
In the European Union, Japan and South Korea additional iron ore import demand in 2016 is expected to be small, and there is considerable uncertainty about whether this slightly positive outcome is attainable. Among many other relatively minor importers around the world, there are no obvious signs of any sizeable boost for trade. China’s dominant market position, with 953mt received last year, ensures that even a low percentage change will heavily affect overall global evolution.
COAL
Global seaborne coal trade’s large estimated reduction last year, following a slight decline in the previous twelve months, seems to have ended a long period of strong growth. However, despite all the clear signs of restraining influences, another decrease in 2016 does not necessarily appear inevitable.
Again, much depends upon China’s import demand. A continuation of the plummeting purchases by Chinese buyers
seen in the past twelve months, falling by a huge 30% to 204m, would almost certainly lead to reduced global coal movements. But some countries in Asia and elsewhere are still increasing their coal usage and imports. Table 1 shows a 2% global rise this year, to 1,133mt, although India’s faltering uptrend, coupled with possible negative influences in Europe are uncertainties.
GRAIN
Estimates of grain trade, including soya movements in the twelve months ahead are always characterized by a high degree of speculation. Weather patterns affecting domestic harvests in importing countries, as well as harvests in exporting countries, are largely unpredictable, complicating forecasts of import demand.
Based on very tentative assumptions, global grain and soya trade in 2016 may grow marginally to just over 400mt. Lower imports into China and the Middle East area during the period up to mid-2016 could be partly offset by higher volumes into Europe. In the second half, trade will be greatly affected by summer grain harvests in northern hemisphere importing countries, prospects for which are not yet entirely clear.
MINOR BULKS
The varied and extensive minor bulks group comprises over a third of all seaborne dry bulk trade. Last year’s total of commodities related to industrial and agricultural activities appears to have exceeded 1,600mt. This category includes large individual elements such as forest products and steel products, as well as many smaller volume commodity movements. Further growth at a moderate rate could be seen in 2016.
BULK CARRIER FLEET
A continued slowdown in the world bulk carrier fleet’s capacity growth to 2% was seen last year, as shown by table 2. The deceleration is expected to persist in 2016 despite the possibility of a slightly higher volume of new ships entering the fleet, because scrapping of old or uneconomic vessels probably will be greater.