by Richard Scott, Bulk Shipping Analysis
Global seaborne dry bulk trade, during 2015, may see its weakest period of growth since the contraction resulting from the world recession six years ago. Over the past nine months the dry bulk commodity import demand trend has slackened noticeably. A key feature of this change is China’s receding impact as a driver of expansion.
Economic output growth is not providing much stimulus for trade. In a mid-September update, the OECD organization commented that global economic growth prospects have weakened slightly in recent months and become less clear. Amid slowing progress in China, world GDP in 2015 is now forecast at only 3.0% after last year’s 3.3% increase, although a modest pick up to 3.6% in 2016 is expected.
Contrasting prospects for grain trade and soya trade are evident. International Grains Council estimates for global movements of wheat plus corn and other coarse grains, in crop year 2015/16 ending June 2016, show a slight reduction. The total is forecast at 314mt (million tonnes), down by 2% from the previous year, reflecting lower imports into some Asian countries, the Middle East area and North Africa.
Soyabeans and meal trade, summarized in table 1, seems likely to increase, based on US Dept of Agriculture calculations. In marketing year 2015/16 ending September 2016, a 3% rise could lift the total to 187mt. China’s imports and purchases by other Asian countries and elsewhere seem set to continue growing.
Expectations of sustained growth in iron ore trade this year have been undermined. During the first eight months of 2015 China’s imports were essentially flat, compared with the same period a year earlier, at 613mt. Steel production in China is slightly down, and low prices for imported ore have not led to foreign supplies displacing domestic iron ore output at the rate expected.
Developments in some other iron ore importing countries also have been subdued. In Japan, steel production is slightly lower this year, affecting raw materials imports adversely. Iron ore imports reportedly were 5% lower in the 2015 first eight months, at 86mt, similar to the percentage reduction in crude steel output recorded. While steel products exports remain buoyant, Japanese domestic steel demand is slack.
Expectations for global coal trade have moderated despite some prominent positive changes among importers. China’s huge reduction in coal imports this year, following a sizeable fall last year, is the most visible influence. During January- August 2015, overall coal imports into China, including low- quality lignite, fell by a massive 64mt or 31%, down to 139mt. Slowing energy usage, greater emphasis on other energy sources, and tighter regulations governing coal use and imports contributed.
Forecasts of India’s coal imports mostly point to further expansion, possibly resulting in an increase of around 25–30mt in the current year, raising the total to a volume approaching 250mt. If that expansion occurs, It could result in India becoming the world’s largest importing country. Much of the growth again is likely to be steam coal for power station use.
Trade in steel products (such as coil, sheet, plate and many other items), the largest element of the ‘minor bulk’ group, is evolving robustly. After apparently exceeding 300mt in 2014, this year’s figure could be higher. China’s exports, which comprise a large proportion of the world total, rose by 15mt in January-August 2015, reaching 72mt and the annual volume may be well above last year’s 93mt.
BULK CARRIER FLEET
Fleet growth in the Panamax bulk carrier size group seems likely to decelerate sharply in 2015 (as shown in table 2), to about 3%, broadly in line with the entire bulk carrier fleet’s average expansion rate. Panamax newbuilding deliveries could diminish, while demolition sales probably will be substantially higher.