After the weakening impulses seen last year, commodity import demand may regain some momentum during the twelve months ahead. This change of pace may be sufficient to enable global seaborne dry bulk trade to strengthen slightly in 2023 as a whole, although prospects for several influences are not yet clear.
Additional support for dry bulk cargo movements is implied by indications, albeit tentative, suggesting that the world economy could begin to pick up later this year. Signs have emerged pointing to a more positive trend than seen recently in several major economies, unfolding during 2023. Extra impetus may be derived from a revival in China, depending on how control of the Covid-19 pandemic progresses, which could benefit commodity imports.
Prospects for increases in steel industry raw materials trade — iron ore and coking coal — over the next twelve months seem limited. In the iron ore segment much depends on China’s import demand, comprising almost three quarters of the global total. None of the main importers are currently showing signs of substantial rises in steel output or purchases of ore.
Negative influences prevailing last year are reflected in the World Steel Association’s data for world steel output volumes. Crude steel production was down by 2% in China, to 1,013mt (million tonnes). Elsewhere larger reductions were seen by 7% in Japan and South Korea to 89.2mt and 65.9mt respectively, and by 10% to 136.7mt in the European Union. India was an exception, achieving a 5% rise to 124.7mt.
Provisional calculations for world seaborne coal trade suggest that last year’s result was flat, after the previous year’s partial recovery. Amid evidence pointing to tight supplies remaining a feature of energy markets for some time ahead, several recent forecasts identify potential for a small coal trade increase in 2023.
Coking coal imports into Asian countries (table 1 shows trends in major importing countries) apparently weakened last year, and a recovery in this group’s performance may not be seen in the next twelve months. However, there is a possibility that one element — India — could provide a boost, assuming that steel production continues to rise, accompanying solid demand trends amid the economy’s strong trend.
Among importers in the grain and soya trades, positive changes are apparent but reduced volumes elsewhere have been prominent. For example in the largest volume individual trade in this segment, soyabeans imports into China in 2022 were down by over 5mt or 6% to 91mt.
The reduction was caused by restraints on livestock feed consumption reflecting the weak economy, but estimates suggest an upturn ahead.
A forecast published in January by the U.S. Department of Agriculture shows global wheat and coarse grains trade in the current 2022/23 year decreasing by about 12mt or 3%, to 419mt. This total includes wheat on a July/June trade year basis, while for corn and other coarse grains a October/ September year is used. Much of the decline is concentrated in the East Asia region, where an estimated 9mt (10%) reduction to 87.4mt reflects the continuing decline in China’s requirements.
Steel products (coil, plate, sheet and other items) are one of the biggest minor bulk trade components. According to some calculations, there was a big fall in global seaborne movements during 2022 amid the slowing world economy and restrained demand from steel-using manufacturing and construction activities.
New capacity added to the world fleet of bulk carriers is detailed in table 2. These newbuilding deliveries declined by about a fifth to 31 million deadweight tonnes last year, according to Clarksons Research calculations, contributing to a deceleration in fleet growth to under 3%. Signs suggest that the 2023 newbuilding deliveries total may be fairly flat.