Some positives for coal trade

Further indicators of a more positive background for 
global dry bulk trade have been emerging in recent
weeks.  Key industries in many commodity-importing
countries seem to be gradually reviving, amid a turn in the
inventory cycle.  But there is still great uncertainty about
how strong the real demand trend for industrial products
will prove, over the next twelve months.  And bulk carrier
fleet capacity expansion, meanwhile, is likely to be very
rapid.
Recently the IMF declared that economic output growth in
most countries would be positive for the remainder of this
year and also through 2010.  Despite that welcome
reassurance, there are good reasons for caution about the
pace of improvement.  Currently, it seems realistic to expect
that world recovery may be quite slow and remain
COAL
As seen within several dry bulk commodity sectors, the
pattern of activity in seaborne coal trade this year has been
very mixed.  While China’s imports have expanded greatly,
and strength in some other coal import markets evolved,
elsewhere large reductions are noticeable.  Table 1 below
shows sharply contrasting changes among Asian buyers of
steam coal.
A recent Abare forecast suggests that world steam coal
trade — including land movements, but mostly seaborne —
could increase robustly in 2010, by 6%, reaching 729.6mt
(million tonnes), after a 2% reduction this year.  Several
Asian and European buyers may need larger volumes.
Similarly a turnround in global metallurgical coal trade is
envisaged, after a steep 12% fall in 2009, with growth of
IRON ORE
Another encouraging view is the latest World Steel
Association forecast of global steel demand.  Assuming a
continued upturn in economic activity, demand for steel
worldwide is expected to increase by 9.2% in 2010, after
declining abruptly by 8.6% this year.
Seaborne iron ore, and coking coal, trade will benefit
calculations suggest that, in Japan, steel demand could grow
by 16% next year, reaching 60.8mt.  European Union
demand may be 12% higher, at 137.4mt, while Korea’s total
rises by 16% to 53.4mt.  For China however, only a relatively
modest 5% rise to 552.6mt is envisaged, following
GRAIN
Negative elements are currently dominating the outlook for
global grain trade.  Unexpected changes could occur, of
course, given the high sensitivity of this sector to completely
unpredictable weather patterns around the world.  But the
possibility of a boost seems distant, awaiting clearer signs of
how northern hemisphere importers’ summer 2010 domestic
harvests may develop.
Expectations for wheat and coarse grains trade currently
point to a fall of about 9% during the current crop year
ending June 2010.  A forecast 3% increase in the smaller
soyabeans and meal trade will be only a partial offset.
Middle East grain imports are expected to be 22% lower at
39mt in 2009/10, while North Africa’s purchases decline by
MINOR BULKS
Seaborne trade in steel products has been severely
weakened by the global recession. Some estimates suggest
that the reduction in 2009 as a whole may be about 10%.
This downturn could be followed by a recovery next year. The
major US import market is especially weak at present -
volumes in this year’s first eight months were 51% lower, at
9.3mt. European Union imports are down by a similar
BULK CARRIER FLEET
Along with robust expansion in other size groups, the
Capesize fleet is growing rapidly, as shown in table 2.  The
deadweight capacity of the Capesize fleet of bulk carriers
(vessels over 100,000dwt) is expected to increase almost
twice as fast in 2009 as seen last year, probably followed by