Slowing growth in dry bulk trade envisaged

Following last year’s resumed growth, commodity import demand may lose some momentum over the next twelve months, based on recent signs. As a result a slowing tendency in world seaborne dry bulk trade seems likely.

 

Currently a pickup in global economic activity’s growth rate that could boost dry bulk trade volume substantially in 2024 is not expected, but some positive influences are visible. In particular interest rates in many countries appear set to begin a downwards trend in the fairly near future, amid retreating inflation, with benefits for spending patterns. But there is great uncertainty about China’s progress, and how much this will contribute to the wider import demand trend.

 

The outlook for steel industry raw materials trade — iron ore and coking coal — in the next twelve months suggests further growth may prove elusive. After last year’s increase, iron ore movements in particular probably will experience restraints. Lower imports into China, seen as quite likely could offset or more than offset any increases among other countries.

 

Annual 2023 steel production figures published by the World Steel Association emphasize contrasting changes among the main raw materials importers. Compared with the previous year South Korea’s crude steel output was 1% higher at 66.7mt (million tonnes), while China’s total was unchanged at 1,019.1mt. In Japan a 3% reduction to 87.0mt was recorded, and the European Union experienced a much larger 7% decline to 126.3mt.

 

Calculations for world seaborne coal trade in 2023 as a whole point to an increase of 5–6%, a remarkably robust performance after almost no growth in the previous twelve months. The huge expansion of imports into China more than offset weakness among other prominent importing countries.

 

A continuation of this trend during 2024 looks unlikely based on recent indications. Prospects for importers are mixed. Some, including India and several smaller Asian buyers such as Vietnam are expected to raise their volumes. Others, including China, Japan and the EU may see flat or lower volumes purchased. In China an especially large reduction is seen as a possibility because the combination of influences resulting in last year’s upsurge may be absent.

 

Among grain and soya importing countries positive changes are evident. Higher volumes are emerging in a number of areas. These could contribute to an overall 22mt or 3% increase in world grain and soya trade in the current 2023/24 year based on US Department of Agriculture estimates published in mid-January, raising the total to 687mt, compared with 665mt in the preceding 2022/23 period. Expected additional wheat and coarse grains volumes in most importing areas are a feature of the outlook for the 2023/24 year ending third quarter 2024.

 

An increase in Asia’s regional total is predicted by USDA, with the East Asia sub-region seeing a 7.7mt (9%) rise to 97mt, while Southeast Asia sees a 2.6mt (6%) rise to 45.8mt. In other areas including the Middle East, North Africa and sub-Saharan Africa growth is also predicted, although by contrast European Union imports may be lower.

 

Steel products (coil, plate, sheet and other items) form one of the biggest minor bulk trade elements. In 2023 these movements apparently increased modestly by about 2% after falling steeply to around 360mt in the previous twelve months. Another rise may be achieved in 2024 according to some forecasts.