by Richard Scott, Bulk Shipping Analysis,
Signs of favourable influences benefiting global seaborne dry bulk
trade are still prominent. Rising import demand for industrial
commodities in many areas is clearly visible, and the upwards trend is
likely to continue over the next twelve months. But there are now
more doubts about how vigorously iron ore trade will grow
in the near future, because of uncertainty about China’s
Recently also, a less solid outlook for the world economy
has emerged. Some indicators of GDP and industrial
production in a number of countries have started suggesting
that recovery may be faltering. The IMF’s July update said
downside risks have increased sharply amid renewed
financial turbulence. Currently the IMF is forecasting world
GDP growth of 4.6% in 2010, and 4.3% in 2011, following
last year’s –0.6% contraction.
Stronger production in the electricity, steel, cement and other
industries is boosting coal consumption and import demand
in many regions. In some countries also a rising proportion of
foreign supplies, resulting from improved competitiveness
compared with material from domestic mines, is further
boosting seaborne trade. China and India are prime
In the coking coal sector, movements are expected to
expand rapidly this year amid recovering pig iron output.
Abare’s latest analysis forecasts global metallurgical coal
trade (including land movements, but mainly seaborne)
growing by over 10% in 2010, after a similar percentage
reduction last year. From 212mt (million tonnes) in 2009, the
total could increase by 22mt, to 234mt this year, chiefly
reflecting higher imports into Japan and Asia (table 1).
Great advantages for seaborne iron ore trade have been
derived from the steel industry’s revival over the past twelve
months. Figures for pig iron production, compiled by the
World Steel Association, show second quarter 2010 output in
the EU reaching 25.5mt, up by 65% from an average 15.5mt
quarterly in last year’s first half. Japan’s output reached
20.8mt, up by 44% from a 14.4mt quarterly average in the
first half of 2009.
South Korea and Taiwan also achieved improved
performances, while China’s pig iron production totalled
153.7mt in the April-June 2010 period, 26% above last year’s
first quarter. Evidence of a slackening trend in China has
already begun emerging, however. Demand for steel in some
Chinese industries appears to be receding, and stocks are
reportedly very large.
The outlook for wheat and coarse grains trade in the twelve
months ahead remains subdued. Only a minimal rise during
crop year 2010/11 ending mid-2011 is expected, after the
sharp downturn in the previous year. But soyabeans trade
prospects are more positive, and the US Dept of Agriculture
has forecast 4% growth to 87.5mt in marketing year
2010/11 starting October.
Currently there is an absence of events — such as severe
domestic harvest shortfalls in importing countries — which
could greatly boost global grain import demand. However,
higher imports into North Africa are foreseen, resulting from
lower domestic output. Also, the recent long period of dry
weather in northern Europe could have a marked adverse
impact on this summer’s crop yields, implying additional
buying of foreign grain and possibly soya supplies.
Among key minor bulks, bauxite/alumina trade could reflect
a pick up in aluminium production in a number of areas over
the year ahead. Stronger aluminium consumption by
industries such as vehicles, packaging and construction may
be seen as economic recovery progresses.
Additional capacity augmenting the global bulk carrier fleet
during 2010 is expected to exceed last year’s extra volume.
Much higher newbuilding deliveries are forecast, although
great uncertainty still prevails, because of postponements
and order book slippage, which is difficult to estimate. As
shown in table 2, newbuilding deliveries this year could
reach around 70m dwt, up by over 60% from 43m dwt in