Favourable influences affecting commodity import demand in numerous countries have become more prominent. World seaborne dry bulk trade volume is likely to grow substantially in 2023, but prospects for a continuation of this trend next year are hazy.
Stronger dry bulk trade is unfolding despite restraints on global economic activity preventing acceleration. A feature of this pattern is China’s difficulty in sustaining a rebound after the adverse effects caused by pandemic controls. In its latest (mid-September) update the OECD organization suggests that world gross domestic product growth in 2023 could be below last year’s 3.3%, down to 3.0%, followed by a further slowing next year.
Amid extra import demand in several countries, global trade in soyabeans and meal could increase by 1% in the 2023/24 October/September year now starting, based on US Department of Agriculture (September) estimates. The total is calculated at 233mt (million tonnes), as shown in table 1, following a 3% rise to 230mt in the 2022/23 year that has just ended.
The largest part of this commodity trade segment, wheat plus corn and other coarse grains, is also expected to grow, but somewhat more vigorously. In this category USDA analysts estimate a 2% rise to 432mt, reversing a reduction to 424mt in the previous twelve months. While China’s soya imports are now seen as diminishing to 100mt in the year ahead, wheat and coarse grain imports may be 11% higher at just over 50mt.
Forecasts for world coal trade in 2023 have been raised since earlier this year, despite emerging evidence of a downturn in Europe following that region’s rising volumes during the past two years. Although carbon reduction policies in many countries are still an underlying adverse influence on coal consumption, trade is proving to be well supported.
Reported views expressed at a recent major international conference point to positive influences continuing to benefit imports into Asia, comprising the largest part of global coal trade. According to these opinions coal is widely seen as the most economical and secure form of energy for growing economies across Asia in the years ahead. Renewable sources of energy for power generation and the electricity grid investments required to facilitate these may not expand fast enough.
Another commodity exceeding earlier expectations for 2023 is iron ore, now predicted to see significant growth in world trade volume this year. The upturn after last year’s weakness is occurring even though signs of strength in many ore-importing countries are limited, and some are likely to experience reductions.
The main element of strength is China. Iron ore imports into China during the first eight months of 2023 totalled 776mt, a 52mt or 7% increase compared with the last year’s same period. Steel production rose less strongly however, by 2%, supported by higher exports of steel products. It is unclear whether the buoyant iron ore imports trend will be sustained through the months ahead and into next year.
Among minor dry bulk commodities, signs of trade expansion in 2023 are not widespread but some growth seems likely to partly reverse last year’s decline in this category as a whole. Estimates suggest that a large reduction in cement trade could occur this year, offsetting much of the added volumes predicted to emerge elsewhere.
About a quarter of the world bulk carrier fleet is comprised of Panamax (70–99,999 deadweight tonnes) size ships, including Kamsarmax vessels. As shown in table 2, this size group expanded by almost 4% in 2022 based on Clarksons Research data, reaching 3032 ships totalling 246m dwt at year-end. A further 3% may be added by end-December 2023, reflecting higher newbuilding deliveries and more scrapping.