by Richard Scott, Bulk Shipping Analysis

Alarge part of global dry bulk seaborne trade expansion currently taking place is concentrated in the iron ore and coal sectors. Within these sectors, two countries, China and India, are the biggest growth drivers. Yet, elsewhere, many other importers of the same and other commodities are increasing their imports, and a grain trade pick up seems to be emerging.

The latest IMF update, published several weeks ago, continued to suggest that the world economy will under- perform in 2013, followed by an improvement next year. Global GDP growth is forecast at just over 3% this year, a sluggish performance and well down from almost 4% in the previous twelve months. In 2014 a step up to a 3.8% advance could be seen, assuming that China keeps growing at around 7.8% annually.


Recent calculations by Australia’s Bureau of Resources and Energy Economics put this year’s growth in world coal trade at 3.3%. Other forecasters are more optimistic, pointing to the possibility of a 5–6% increase. A crucial aspect is what happens to Chinese and Indian import demand.

Indications of import buying trends in the first half of 2013 have been mostly positive. China’s coal imports in the January-June period were reportedly 13% higher than in last year’s same period, at 158.6mt (million tonnes). India’s upwards trend also apparently persisted. However, prospects for the near term are not altogether clear. China’s economy has shown signs of slackening and, recently, measures to discourage foreign purchases of low-quality coal grades were proposed.


Among key importers of iron ore, contrasting influences were prominent in the past six months. Pig iron production at blast furnace mills was lower in the European Union and South Korea. But in Japan a moderate increase was achieved, while in China robust expansion occurred.

A further phase of the downwards trend in the EU saw first half 2013 pig iron output reduced by 2%, compared with the previous year’s same period, to 46.4mt. South Korea’s total was 6% lower, at 19.6mt. Conversely, Japan’s volume rose by 3%, to 41.5mt and Chinese production was 357.5mt, a vigorous 7% rise. The outlook also is mixed with, in particular, a possibility of extended weakness in Europe.


Potential for higher grain and soya imports into China seems to have improved recently. As well as envisaging higher soyabeans purchases, USDA analysts are pointing to greatly expanded wheat and corn import demand during the 2013/14 crop year now beginning. These additional quantities could provide a substantial boost for world trade.

According to the forecasts, soyabeans crushing mills in China could raise their imports to 69m, a 10m or 17% increase, reflecting lower stocks and strong soyameal and oil consumption. China’s wheat and coarse grains imports are now expected to double to 18m, despite predictions of a larger domestic grain harvest this summer. But there have been some reports of crop damage from heavy rainfall, and government reserves of milling wheat have fallen.


Some estimates suggest resumed growth in global bauxite/alumina seaborne trade during 2013, after a reduction to around 105mt last year. Primary aluminium output in North America and China rose in this year’s first half, benefiting raw materials consumption, although Europe’s output was lower.


The world bulk carrier fleet is still being greatly expanded by high newbuilding deliveries. While these are well below the past year’s volume, a total of over 70m dwt could be completed in 2013 as a whole, as shown in table 2. During the first half of this year, based on Clarksons figures, newbuilding deliveries reached 35.1m dwt (428 ships). Scrapping, amounting to 12.9m dwt, offset over one-third.