A fairly promising outlook for world seaborne dry bulk trade growth during 2014 is unfolding. In many countries commodity imports seem set to increase, probably by quite large amounts. Crucially, in the coal and iron ore trades, together comprising more than half of the total, solid upwards trends continue.
Tentative signs of strengthening momentum in global economic activity are still intact. This improving pattern could assist demand for the products of various industries importing dry bulk commodities. Despite widespread expectations of slowing in China’s economy, the global outlook is for “ a further strengthening in the recovery” according to the IMF’s end-February assessment.
World seaborne iron ore trade could grow by about 5% in 2014, a rise of 63mt (million tonnes) to 1,269mt, as shown by table 1. Some other forecasts suggest a much higher expansion rate is likely. As in previous years, most of the extra volume probably will be contributed by China, the dominant importer. Consequently, predictions reflect varying assumptions about how the key influences shaping Chinese purchases will evolve.
The overall iron ore trade forecast incorporates a rise in China’s imports this year of about 6%, raising the total to 870mt. One key factor expected to support firm expansion is a sustained emphasis on increasing the proportion of ore from foreign suppliers, displacing domestic supplies. Elsewhere, among other importers including Europe, Japan and South Korea, additional volumes are envisaged.
Prospects for both steam and coking coal trade during 2014 are positive. The largest part, comprising three-quarters of the total, is steam coal, which is still benefiting from growing power station usage of imports in numerous countries. In the coking coal segment higher steel production at blast furnace mills using this coal type, in many areas, could provide additional impetus.
Within the overall forecast of about 5% growth in world
seaborne coal trade during the year ahead, reflecting an estimated 57mt rise to 1233mt, Asian importers are prominent. The focus of attention is not only China but India as well, and a number of other countries. While the pattern in China is surrounded by considerable uncertainty, India’s upwards trend appears set to continue at a very strong pace.
Global grain trade forecasts are more conjectural. This characteristic arises because it is difficult or impossible to predict the weather patterns which will determine both domestic harvests in importing countries and output in exporting regions. Therefore a predicted 2% growth rate for seaborne trade to 345mt (including wheat, coarse grains and soyabeans) this year is provisional.
Calculations based on the conventional crop year, used in statistics, show a much higher percentage increase for wheat and coarse grains trade during the current period ending mid-2014. A large part of the incremental volume reflects China’s additional import demand for wheat and corn. Expectations of higher Chinese import requirements for soyabeans are also incorporated.
About one-third of global seaborne dry bulk trade comprises the large and varied minor bulks sector. An overall 2% growth rate is foreseeable in 2014, boosting the total to over 1,550mt. Industrial bulks related to manufacturing and construction, the largest part, could derive some advantages from reviving economic activity in several regions including Europe.
BULK CARRIER FLEET
The world fleet of bulk carriers is set to grow briskly this year, although less rapidly than seen in 2013, continuing the established deceleration trend, as shown by table 2. A 37m deadweight tonnes or 5% increase to 758m dwt at end-2014 is estimated. Newbuilding deliveries are likely to be lower, but signs point to sharply lower scrapping as well, reflecting many perceptions of an approaching freight market recovery.