by Richard Scott, Bulk Shipping Analysis

Commodity import demand in a number of countries evidently is being reinforced by positive influences.
These are assisting growth in global seaborne dry bulk trade, with indications pointing to a possible
acceleration in 2017 as a whole, compared with last year.
However, there is still uncertainty about aspects of second half expansion.
The latest economic outlook prepared by the OECD organization, published last month, highlighted signs of
improvement in the global economy beginning to appear. A modest pickup in the world’s GDP growth rate this year now seems achievable, from 3.0% in 2016, to 3.5%. World trade volume is forecast to grow by 4.6% in 2017, almost double last year’s sluggish rate.
In the grains sector (wheat, corn and other coarse grains) International Grains Council estimates suggest that global
trade may be marginally lower at 349mt (million tonnes), during the new 2017/18 crop year starting this month.
Previously a small 5mt or 1% estimated rise to 351mt occurred in 2016/17 which has just ended, as shown in table
1. The outlook may change when summer harvests in northern hemisphere importing countries have been
Sizeable increases in grain import demand are not a prominent feature at present. In the past twelve months,
higher imports into India, Mexico and Brazil (wheat) were the main additions. A restraining element probably
continuing in the period ahead is a downwards trend in China’s imports, especially feedgrains, reflecting government
policy designed to reduce excessive corn stocks. Also, India’s imports which were unusually high in 2016/17 are likely to diminish because of a better domestic harvest.
Higher steel production in a number of countries is benefiting raw materials trade. Improving economic growth momentum is apparently reflecting partly a greater contribution from investment spending, much of which incorporates steel.
Stronger public infrastructure investment in Asian countries supports this trend.
China’s monthly iron ore imports averaged 89mt in the first five months of 2017, after an average 85.4mt through
last year. The strengthening trend indicates that the annual figure will be much higher this year, but there are
uncertainties about future performance. Other importers currently expected to see annual increases include Japan, the
European Union, and several smaller buyers.
Seaborne coal trade now appears to be set for a solid increase in 2017 which, if achieved, will be a notable reversal of the trend following two down years. But this year’s second half is still difficult to predict, especially as
China’s imports could be greatly affected by changes in official policy as well as commercial decisions.
In another key importing country, India, coal imports could continue declining. Last year saw a 10% reduction to just below 200mt, amid increased output from domestic Indian coal mines. These are expected to expand production again.
While demand for power remains strong as the economy grows rapidly, other energy sources are contributing
additional electricity supplies.
Fertilizers in raw or processed forms comprise a large part of the minor bulks trade group. Shipments of phosphate rock, sulphur, potash, urea and manufactured fertilizers are estimated to have totalled over 150mt in 2016. Tentative
signs of an increase in the current year have emerged, possibly raising the total by about 3–4%.
In the Handysize (10-40,000 dwt) bulk carrier category, which comprises about 12% of the entire world fleet of
all sizes, growth may accelerate slightly in 2017, as shown in table 2. This fleet has grown slowly in the past three
years, averaging 1.4% annually. During the current twelve months, lower newbuilding deliveries accompanied by
sharply reduced scrapping could raise the growth rate to over 2%.