Global dry bulk seaborne trade looks set to continue growing at a moderate rate during 2013. Some negative influences are very prominent, however, and there is great uncertainty about how other factors will evolve. Grain trade has weakened but may regain momentum later this year. Industrial commodity movements could benefit from any pick up in economic activity.
In recent weeks, a few positive signs have emerged among statistics providing clues to the health of key economies determining world import demand for dry bulk commodities. It is not yet clear yet entirely whether Europe is moving towards a slow improvement, and Japan’s progress has been uneven. But indications for China in 2013 have begun to seem distinctly more encouraging.
Although forecasts of grain trade in the current crop year show a large decline, prospects are not quite as negative as predicted earlier. A few months ago, an 8% reduction seemed likely. The latest International Grains Council estimates suggest that world trade in wheat and coarse grains could be down by less than 6% in crop year 2012/13 ending June, compared with the previous twelve months, at 254.4mt (million tonnes) (table 1).
Much higher international grain prices, resulting from greatly curtailed supplies available in a number of key exporting countries, have caused a widespread weakening of import demand around the world. Among the very few importers likely to increase foreign purchases is the European Union, where the 2012/13 volume could rise by 11% to 15.3mt. This upturn follows a sharply reduced EU domestic corn harvest last summer.
Steel industry raw materials trade has derived strong support from China in the past year. During the January–November 2012 period, imports of iron ore into China (including some land movements, but mostly seaborne) increased by almost 52mt or 8%, reaching a total of 675mt.
This growth in iron ore trade’s dominant component was
especially beneficial at a time when there were only limited advances in other country’s purchases and, apparently, a reduction in Europe. Over the next twelve months further expansion of Chinese imports is expected. Another increase could enable global iron ore trade to continue growing, despite probably not much additional demand elsewhere among other importers.
Positive factors affecting coal trade are more widely spread. In many countries rising electricity generation based on imported coal is a trend which could continue this year and well beyond. The focus is on Asia in particular, but in Europe also events during the past twelve months have demonstrated that there is potential for additional import demand to appear.
An updated forecast, published in mid-December by Australia’s Bureau of Resources and Energy Economics, suggests that global metallurgical coal trade (coking coal plus steam coal grades used in the steel industry) could increase robustly in 2013. After an estimated 5% rise to 272mt last year, the total is predicted to grow again by a similar percentage, reaching 286mt. Much higher imports into India and China are foreseen
Imports into the European Union, from external origins, form a large element of world trade in steel products. In 2012 these imports may have fallen very sharply from the 29mt total seen in the previous year. According to recent estimates by Eurofer (European Steel Association), this year could see a turnaround, resulting in a modest 3% rise.
BULK CARRIER FLEET
The Handysize (10-39,999dwt) bulk carrier fleet’s expansion has been modest over the past two years, at about 3% annually, as shown by table 2. In 2012, higher newbuilding deliveries were accompanied by a large increase in scrapping. During the twelve months ahead, tentative indications point to slower growth, amid a sharp fall in newbuildings delivered.