by Richard Scott, Bulk Shipping Analysis,
Import demand for commodities looks set to benefit from a number of positive influences in the twelve months ahead. Consequently global seaborne dry bulk trade can be expected to show a sizeable increase. Higher volumes of minerals, other industrial cargoes and agricultural products are foreseeable.
Better prospects for international economic activity were reflected in the latest European Commission predictions, published a few weeks ago. In the world as a whole, GDP is forecast to grow by an average 3.6% in 2014, compared with last year’s slow 2.9%, accelerating to 3.9% next year. But within this overall average, China is expected to see a slowing trend, a view reinforced by some recent indicators.
Favourable influences have become more prominent in the grain (including soya) trades. In the soya segment, US Dept of Agriculture calculations point to global trade rising by 15mt (million tonnes) or 10% in the current 2013/14 marketing year ending September, reaching 164mt, as shown by table 1. Higher imports into China, up by 15% to 69mt, are likely to be a big element of growth.
World trade in wheat and coarse grains is also likely to increase, almost as rapidly. International Grains Council figures suggest a 25mt or 9% rise in crop year 2013/14 ending June, to 291mt. Larger imports into China are the biggest part of this growth as well, predicted to double to 19mt. Even as the economy slows, Chinese usage of agricultural products is strengthening.
Among positive contributions to steel industry raw materials trade this year, additional iron ore imports into Europe could be visible, resulting from the economic revival now under way. After two years of declining steel production in the European Union, domestic demand for steel seems to be picking up and a modest increase is envisaged during the current year.
Higher iron ore purchases by several key buyers are reflected in forecasts just published by Australia’s Bureau of Resources and Energy Economics. Global iron ore trade (including land movements, but mainly seaborne) in 2014 is estimated at 1315mt, a 90mt (7%) increase. Extra volumes into South Korea and other countries could be accompanied by strong growth in China.
Steel production advances are likely to have advantages for coking coal trade this year, while steam coal import demand looks set to see further expansion. Asian importers are the principal focus, especially India and China, but positive trends in a wide range of other areas are also prominent.
One possible exception to this picture is a reduction in Europe’s steam coal imports. These imports appear to have diminished last year despite remaining buoyant in the United Kingdom, with weakness especially notable in Spain and Italy. Although it is not yet clear whether another decrease will be seen in 2014, longer-term prospects are distinctly unfavourable, given the EU policy decision to promote cleaner energy use and close coal-fired power stations.
Steel products trade comprises a large part of the ‘minor bulks’ segment, and continued growth may be achievable this year. After rising by an estimated 10mt or 3% last year, to about 290mt, a similar 2–3% rate of increase could emerge in 2014. Larger imports into the EU market are envisaged, and possibly into the US market as well, where demand is improving.
BULK CARRIER FLEET
Amid decelerating expansion in the entire world bulk carrier fleet, the Panamax (65–99,999dwt) size group is still growing rapidly. As shown by table 2, this fleet’s deadweight capacity growth exceeded 9% in 2013, and a further 7% is expected to be added this year. However, both newbuilding deliveries and scrapping are difficult to predict accurately.