Richard Scott, Bulk Shipping Analysis, 

Towards the end of last year commodity volumes imported by numerous countries remained buoyant. Prospects for this solid pattern to continue in the months ahead are fairly favourable, and it seems likely that world seaborne dry bulk trade will see another sizeable advance through 2018.

Many forecasts for global economic activity point to a probable continuation of the improving trend seen in the past twelve months. The latest update by the OECD organization stated that “a broad-based and synchronized improve- ment in (GDP) growth rates across most countries” is progressing. Accelerating goods and services output is accompanied by strengthening international trade.

GRAIN

World trade in wheat, corn and other coarse grains is expected to see a continued modestly increasing trend, at least until mid-2018. Recent Interna- tional Grains Council estimates, summarized in table 1, suggest a 2% rise to 359mt (million tonnes) in crop year 2017/18 ending June. Lower imports into China, India and elsewhere are likely to be more than offset by higher imports into the European Union, Egypt and Saudi Arabia.

In China grain buying on international markets could decrease again, reflecting good domestic harvests and excessively high corn stocks which the government is trying to reduce. But soyabeans purchases maintain an upwards trend. 

US Dept of Agriculture calculations suggest that China could import 97mt of soyabeans in the trade year ending September 2018, a 4% rise, boosting global soya trade.

IRON ORE

A stronger performance by the steel industry is benefiting seaborne movements of the main raw materials. Iron ore trade last year grew at a brisk rate, based on provisional figures, with increased imports into China a prominent feature. Other buyers including the EU, Korea and some relatively small importers contributed additional quantities.

An expectation of more growth in the iron ore sector during 2018 partly reflects optimism about the global steel production upturn proving sustainable. Another aspect specifically relates to Chinese buyers, who purchase more than two-thirds of annual world iron ore sea trade estimated at over 1,450mt in 2017. Additional demand for high grade foreign ore, to substitute for lower grade material from Chinese domestic mines, is seen as a positive element.

COAL

Following what appears to have been a fairly strong upturn in the coal trade trend last year, will 2018 see a further increase? The rebound seen during the past twelve months could indicate that, possibly, pessimistic views after two annual reductions in the global total were too negative. However, forecasts have become more speculative. In three key coal importing areas especially — China, India and EU — policy decisions, with hard-to-predict timing and impact, are having larger effects on foreign purchases. These countries comprise about 18%, 15% and 12% respectively of global seaborne coal imports, almost half of the total. Changes in govern- ment environmental policies are likely to have effects which may or may not prove predictable.

MINOR BULKS

One of the bigger minor dry bulks sector components is fertilizers, comprising both raw materials and semi-finished products. Estimates suggest that overall world seaborne movements of phosphates, sulphur, potash and urea increased sharply last year, possibly reaching around 160mt, and further growth could be seen. Both potash and phosphate movements appear to have resumed a positive trend.

BULK CARRIER FLEET

About 12% of the entire world bulk carrier fleet is represented by the size group with the smallest ships, the Handysize (10–39,999dwt) segment. In most of the recent past years, growth in Handysize capacity has been in the 1–2% range, based on Clarksons Research data, including an estimated 2% in 2017. As shown by table 2, newbuilding deliveries decreased last year, while scrapping was lower. During the next twelve months, a further fall in newbuildings delivered could result in slower fleet growth.