by Richard Scott, Bulk Shipping Analysis,  

Over the past twelve months, signs pointed to weaker growth in commodity import demand in a number of countries, or actual reductions. Provisional figures suggest that overall growth in global seaborne dry bulk trade during 2015 was minimal or nil. Confidence in predicting a solid increase this year has receded.

One influence which may assist a return to a more healthy rate of trade expansion is strengthening growth in economic activity. The latest OECD forecasts published in mid-November seem plausible. GDP in the advanced countries group (USA, Japan, EU and Korea) could edge upwards to 2.2% in 2016, from an estimated 2.0% last year. But China’s economy is still expected to continue slowing. 

GRAIN

A small 2% reduction in grain trade (wheat, plus corn and other coarse grains) during the current 2015/16 crop year seems likely. As shown by table 1, lower imports into Asia, mainly caused by a downturn in China, and into the Middle East area probably will not be fully offset by additional imports elsewhere, including higher volumes in the European Union. International Grains Council estimates suggest that the total could decline to 314.4mt (million tonnes).

Conversely, related soya trade is still expected to increase. US Dept of Agriculture calculations show global soyabeans and meal movements expanding at a fairly rapid 5% rate in the 2015/16 marketing year ending September. This 8.3mt forecast rise to 190.4mt more than offsets the reduction in grain trade predicted, although the time periods do not exactly match.

IRON ORE

An upbeat outlook published in late December by the Australian Government Dept of Industry, Innovation and Science indicated that global iron ore trade in 2016 could expand by 4.4%, after a slow 1.6% increase last year. The total, which includes land movements but is mostly seaborne, could rise from an estimated 1,381mt in 2015 to 1,442mt this year.

Although this forecast shows a decline in iron ore imports into the EU and Japan, other importers are predicted to raise their purchases. China’s imports may increase by over 2% to 951mt this year, despite an estimated fall in crude steel production. More replacement of Chinese domestic iron ore production with imports is foreseen. Other importers as a group also may see a substantial advance.

COAL

Estimates of coal trade prepared by the same forecaster, AGDIIS, are also positive, indicating resumed growth in both steam and coking coal categories. One crucial assumption is that China’s dramatic downturn in imports will not be extended further in 2016, when a flattening of the trend will evolve. Figures, again, are based on all trade, most of which is seaborne.

Global steam coal trade could see a 2% increase in 2016 to 1059mt, after last year’s sharp fall. China’s imports of this coal type could rise by almost 2% to 160mt, accompanied by larger volumes in India (up by 7% to 204mt), contrasting with lower volumes into Japan and Europe. Global metallurgical coal trade in 2016 may be 1% higher at 302mt, mainly benefiting from 7% growth in India, importing 61mt.

MINOR BULKS

World seaborne fertilizer trade, comprising raw materials and semi-finished products, amounts to large volumes which may have totalled well over 140mt last year. Recent reports suggest that the international market may strengthen over the next twelve months, amid greater import demand in a number of Asian countries.

BULK CARRIER FLEET

During 2015 the world fleet of Handysize (10–40,000dwt) bulk carriers saw a slight increase of about 2%, resulting from higher newbuilding deliveries accompanied by higher scrapping, as shown by table 2. Prospects for this size group in the next twelve months point to a similar rate of growth, based on very tentative assumptions about the main influences.