Global import demand for dry bulks is still benefiting from a variety of positive influences, resulting in rising trade volumes. Seaborne movements of industrial and agricultural commodities are growing, but some prominent adverse factors are restraining the pace of expansion. A slowing world economy is having widespread repercussions.
The latest (mid-July) IMF update commented that “in the past three months, the global recovery, which was not strong to start with, has shown signs of further weakness”. World GDP growth is expected to slacken further to 3.5% in 2012, after last year’s sharp deceleration to 3.9%, followed (possibly) by a pick up next year. The problems and persistent recession in the eurozone is a cause for much anxiety, however.
 
COAL
Signs of increasing demand from a wide range of importers are visible in the coal market. Both steam and coking coal movements are strengthening, amid varying trends among importing countries. Expanding coal-fired power generation, or higher blast furnace steel production or greater reliance on foreign coal suppliers (compared with domestic supplies) are key influences.
Forecasts of coking coal imports into a number of Asian countries are shown in table 1. Recent estimates by Australia’s Bureau of Resources and Energy Economics suggest that world metallurgical coal trade (including on land, but mainly seaborne) could grow by 16mt (million tonnes) or 6% in 2012, reaching 286mt. Higher volumes into the Asian region are likely to provide the biggest boost.
 
IRON ORE
Indications of how steel industry raw materials trade is progressing are given by figures for pig iron production at blast furnace mills. In the first half of 2012 China’s pig iron output was 4% higher than seen in last year’s same period, at 335mt, according to World Steel Association provisional data. South Korea saw a marginal 1% rise, to 21mt.
Developments among other key iron ore and coking coal
importing countries were less encouraging. In Japan, pig iron production in the January–June period this year showed no growth, at an unchanged 40.3mt. In the European Union, reflecting the area’s very subdued economy, pig iron output actually declined, by 4%, to 47.5mt. Moreover, there are no obvious signs yet of an EU pick-up in the second half.
 
GRAIN
Predictions for grain trade in the year ahead were recently marked down sharply. The International Grains Council’s latest (end-July) forecast for global wheat and coarse grains trade, in crop year 2012/13 beginning July 2012, shows a 10.3mt or 4% reduction compared with the previous year, to 256.3mt. The preceding forecast a few weeks earlier had indicated little change.
What explains this drastic revision? In the space of just a few weeks it became much clearer that prospective world grain supplies and, in particular, export availability, is likely to tighten greatly. Excessively dry and hot weather has damaged US crops due to be harvested soon, and the outlook for imminent harvests among the Black Sea suppliers — Russia, Ukraine and Kazakhstan — has deteriorated further.
 
MINOR BULKS
Global movements of bauxite/alumina reached an estimated 110mt last year, and a further increase may be seen in 2012. But not all signs in the importing countries are positive. North America’s aluminium production in the first five months of this year was 1% lower, while Europe’s output fell by 8%. In China, by contrast, there was a robust 12% increase.
 
BULK CARRIER FLEET
Very high newbuilding deliveries from shipyards are still expanding the world bulk carrier fleet. In the first half of this year 656 ships totalling 56.1m dwt were delivered, according to Clarksons provisional data. As shown by table 2, the annual total for 2012 could be over 100m dwt, exceeding last year’s volume. Higher scrapping is offsetting about 30% of this new tonnage.