Signs of some pick up in commodity import demand have become a more distinct pattern in recent weeks. These indications reinforce expectations of resumed growth in world seaborne dry bulk trade trend during 2023 and into next year.
The post-pandemic evolution of the global economy, after an initial revival, has been less positive than expected.
An energy crisis, inflationary pressures and rising interest rates have greatly restrained economic activity with adverse effects on dry bulk trade. But there are tentative indications of an improvement ahead over the next twelve months. The OECD organization commented early last month that “the global economy has begun to improve, but the recovery will be weak”.
GRAIN & SOYA
An upturn in world grain trade in the new 2023/24 year — starting this month for wheat, and October for corn and other coarse grains — seems likely based on tentative evidence. The US Department of Agriculture’s revised estimates published a few weeks ago showed world wheat and coarse grains trade increasing by 13.6mt (million tonnes) or 3%, from 421.5mt in 2022/23, to 435.0mt.
Imports into Asia and North Africa are forecast to rise in the period ahead but, by contrast, European Union purchases may be lower, as shown in table 1. China’s volume may be 5.5mt (12%) higher at 50.4mt. The EU’s total could be 7.1mt (19%) lower at 31.0mt. A large influence on predictions is assumptions about summer 2023 domestic harvests in importing countries. There is still much uncertainty surrounding these because the weather conditions determining output are unpredictable.
COAL
Assisted by higher imports into two of the largest importing countries, world coal trade is likely to strengthen during 2023. Both India and China are seeing growing purchases, although the boost may be partly offset by receding import demand in Europe after last year’s upsurge.
In the first five months of this year coal imports into China increased rapidly from the low volume seen in the previous year’s same period. The January-May 2023 total was up by 86mt or 90%, reaching 182mt, amid a pickup in economic activity and energy consumption following the ending of pandemic restrictions. But the annual imports growth rate seems unlikely to show such a high percentage expansion because monthly levels had already bounced back in the second half of last year.
IRON ORE
Among steel industry raw materials importing countries, trade volumes are still restrained by trends in steel demand and production. The latest World Steel Association statistics emphasize negative output changes in Europe and Japan especially, while China saw added support.
A large crude steel production decline occurred in the European Union in the first five months of this year. The volume fell by over 10% compared with last year’ same period, to 56.0mt according to the WSA figures. In Japan a 5% decline to 36.5mt was seen, accompanied by a marginal (under 1%) reduction in South Korea to 28.1mt. In China, output increased by 2%, reaching 444.6mt, although the May monthly figure was down by 7%, confirming other indications of a softening market for steel.
MINOR BULKS
Prospects for fertilizer trade, a substantial component of the minor bulks sector, seem to have improved. After a large reduction last year, to around an estimated 180mt, movements of potash, phosphates (rock and processed), sulphur and urea could all see increases in 2023 based on recent reports.
BULK CARRIER FLEET
About one-sixth of the world bulk carrier fleet consists of Handysize (10–39,999 deadweight tonnes) size vessels. As shown by table 2, fleet capacity has grown by about 3% annually in the past two years.
In 2023 a similar rate of increase is expected, resulting from fairly stable newbuilding deliveries and scrapping totals.