Coal trade’s fading strength

Over the past few months indications of more support for import demand in some countries have been emerging. Conversely, adverse influences are prominent elsewhere, possibly resulting in a fairly flat annual volume of world seaborne dry bulk trade this year followed by limited growth prospects in 2026.

 

A marginally brighter outlook than foreseen previously, for economic growth in many of the countries importing dry bulk commodities, was suggested by the International Monetary Fund in its end-October assessment. But the net result of calculations is that world gross domestic product growth, after 3.3% last year, is likely to be reduced to 3.2% in 2025 and 3.1% in 2026, relatively subdued progress compared with past performance. China, in particular, still seems to in a sustained deceleration phase.

 

Further confirmation that perceptions of coal trade prospects have become mainly negative was provided by last month’s revised forecast by analysts at the Australian Government’s Department of Industry. The figures include all world trade in coal, which is mostly seaborne.

 

This update shows global coal trade totalling 1,456mt (million tonnes) in 2025, a 95mt or 6% decline from the previous twelve months. More than half of that decline is expected to occur in China, where imports could be 56mt or 10% lower at 487mt. India and Japan may also see reduced volumes. In 2026 a further world trade decline of about 18mt (1%) to 1,438mt is predicted, amid a sustained downwards trend in China and extended weakening in other countries.

 

In the iron ore segment there have been few signs of expansion ahead. Some figures suggest roughly unchanged volumes of world seaborne trade both this year and more tentatively next year, at around 1,600mt annually, of which China’s imports form the dominant part, over three-quarters of the total.

 

Crude steel production in China is estimated by AGDISR to decline by 4% in 2025 from last year’s level, to 968mt. The weakening envisaged reflects ongoing difficulties in the property, especially residential construction and other domestic steel-consuming industries, partly offset by rising exports of steel products. Restraints seem likely to continue into and through 2026, pointing to possible flat or lower import demand for iron ore.

 

Indications of an upturn in world grain trade over the next twelve months have been emerging, following weakness in the preceding period. Increased imports into Asian countries are foreseen, and these could be accompanied by additional volumes required by other importers around the world.

 

The latest available (September) forecasts by the US Department of Agriculture showed world trade in wheat, corn and other coarse grains, plus soyabeans and meal rising by 4.6% in the 2025/26 marketing year beginning 1 October. The total including land movements but mostly seaborne, as calculated by Bulk Shipping Analysis, could be 31mt above the previous year’s figure at 722mt.

 

Within the minor bulks segment, ‘agricultural bulks’ such as oilseeds and meals, rice, sugar and several other commodities comprise substantial trade. World seaborne volumes in this sub-category have been growing in recent years, reaching about 205mt in 2024, and further growth could be seen during the current year and further ahead, based on present expectations of potential strengthening in global import demand.

 

Vessels of 100,000 deadweight tonnes and over comprise the Capesize fleet of bulk carriers — a size group which statistically includes Newcastlemaxes as well as larger ore carriers. As shown in table 2, Capesize fleet growth has averaged about 2% annually in the past few years, including an estimated 1.5% in the twelve months to end-December 2025. Next year newbuilding deliveries could be higher, but more scrapping may occur, resulting in a broadly stable fleet growth rate.