Since the beginning of this year positive changes affecting commodity import demand have gained momentum. A large annual increase in world seaborne dry bulk trade in 2023 as a whole is now envisaged, but signs currently suggest a slowing may occur next year.
According to the latest International Monetary Fund update published last month the world economy is resilient but “still limping along, with growing divergences”. Global growth based on gross domestic product is forecast to slacken by half a percentage point this year, to 3.0%, with no improvement foreseeable in 2024 when a similar 2.9% is predicted. These growth rates are below historical averages.
COAL
Seaborne coal trade is proving a bright element with current-year forecasts being revised upwards to show robust expansion. However the upturn mainly reflects China’s extra purchases, particularly steam coal, offsetting weakening trends among some other importing countries in Europe and Asia.
The world seaborne coal trade total in 2023 now seems likely to see more than 5% growth, a performance greatly exceeding many expectations at the start of this year. But there are no firm indications that China’s import demand next year will continue expanding at the recent remarkable rate. This contribution from the world’s largest importer may add over 100mt (million tonnes), 40% or more, in the entire current year.
IRON ORE
Global iron ore trade is also forecast to achieve a substantial annual increase in 2023 The latest estimate from the Australian Government Department of Industry published last month suggests a rise of 72mt (5%) this year, to 1,646mt (including some land movements, but mainly seaborne), despite a lack of growth in numerous countries.
A positive overall trend again largely reflects strength in China’s purchases which are the dominant influence on international ore trade. Revised calculations by the World Steel Association show demand for finished steel products in China growing by 2.0% in 2023 after last year’s 3.5% decline, followed by a flat outcome next year. Based on that expectation, and other signs, it seems likely that expansion of global trade in iron ore may prove difficult to sustain in the year ahead.
GRAIN & SOYA
After an extended period of little growth in world grain and soya trade, there are some tentative pointers to a resumed strengthening. The US Department of Agriculture’s mid-October estimates showed almost flat trade in wheat, corn and other coarse grains plus soyabeans and meal over the past two trade years. In 2023/24 beginning this month, a 7mt (1%) increase to 676mt is expected.
During the current 2023/24 year, higher imports into Asian countries are envisaged. The USDA’s figures show East Asia’s wheat and coarse grain imports rising by 5mt (6%) to 95.1mt while Southeast Asia’s volume increases by 1.4mt (3%) to 45.0mt. Conversely, European Union imports are likely to decline by 5.1mt (13%) to 33.3mt as a result of improved domestic grain supplies.
MINOR BULKS
Within the minor bulk trades category agricultural commodities including sugar, rice and miscellaneous oilseeds and meal form a sizeable component. The global total grew slightly in 2022 to about 190mt and could see further growth this year.
BULK CARRIER FLEET
Capesize bulk carriers, defined statistic ally as vessels of 100,000 deadweight tonnes and over to include Newcastle max as well as much larger ore carrier sizes, comprise two-fifths of the entire world bulk carrier fleet. As shown in table 2, Capesize fleet growth slowed to 2% last year amid greatly reduced newbuilding deliveries that almost halved, compared with the previous twelve months. In 2023 the newbuilding total is likely to be similar to last year’s volume amid scrapping remaining at a low level, probably resulting in fleet growth of around 2% again.