Hazy outlook for grain trade – BULKCARRIER TRADE & FLEET OUTLOOK

import demand, in the next twelve months, seem
The future trend of some
agricultural commodity trades — particularly grain — is not
clear at present. But movements of raw materials, fuels,
and numerous other commodities related to industrial and
construction activity can be expected to increase.
Forecasts still point to a continuing world economic
recovery through 2010 and into next year, providing vital
support for trade. The OECD group of advanced countries,
including Europe, Japan and the USA is apparently regaining
momentum. And China’s economy, based on the World
Bank’s latest figures, is now likely to achieve faster GDP
growth of 9.5% this year, after expanding strongly by 8.7%
last year.
As the end of the 2009/10 crop year for wheat and coarse
grains approaches, few signs have emerged of how trade
will develop in the new 2010/11 year starting July. Currently
there are no indications of an upturn after the present year’s
estimated 7% fall. However, import demand will be heavily
influenced by mid-2010 domestic harvests in northern
hemisphere importing countries, and the production
quantities from these crops are not yet predictable.
Global soyabeans and meal trade is forecast to increase by
5mt (million tonnes) or 4% during marketing year 2009/10
ending September, reaching 133.4mt, based on USDA
calculations summarized in table 1. Imports into the
European Union could be about 4% higher, while China’s
volume rises by about 3%, to 42.6mt. Some other Asian
countries also may purchase larger amounts.
Continued growth in world seaborne iron ore trade this year
is widely expected, but China’s proportion of incremental
movements is not easy to estimate. In the first two months
of 2010, China imported 96mt, a much lower volume than
seen in the previous two months. Monthly quantities in the
period ahead are likely to be larger.
Support for iron ore trade during 2010 will be derived
from higher steel output in Europe, Japan, and Korea.
Production of steel in these countries began recovering in last
year’s second half and the positive trend is likely to persist.
Eurofer’s estimates point to a 12.5% rise in EU steel demand
in 2010, amid reviving manufacturing activity, implying extra
output at European mills.
Both steam and coking coal import demand probably will
expand over the next twelve months, but growth in coking coal
movements could be especially rapid. Recent Abare estimates
suggest that world metallurgical coal trade — including
steam coal grades used in the steel industry — may rise by
20mt (9%) in 2010, to 231mt, benefiting from higher
volumes into Japan, India, Korea and Europe.
India has become a greater focus of attention in the coal
sector as imports continue to advance strongly. Moreover,
there are clear signs that growth will remain rapid over the
next few years. Abare’s calculations show a further sharp
11% increase in India’s steam and coking coal imports this
year to 73mt, from an estimated 66mt in 2009.
Seaborne steel products trade was greatly weakened by last
year’s global recession, falling by over 15% to around 220mt,
according to some estimates. A rebound is expected to
follow in 2010, as import demand revives in many areas,
probably including the USA, Middle East and European
countries, although it is less clear whether another increase
BULK CARRIER FLEET
Fleet growth in the panamax sector is expected to be less
rapid than Capesize and Handymax fleet expansion this year,
but it will be brisk. Table 2 shows an estimated 7% increase
in panamax deadweight capacity during 2010, raising the
year-end total to 129m dwt. Much higher newbuilding
deliveries are predicted, possibly accompanied by more