In many dry bulk commodity trades there are clear signs of continuing growth. Positive influences are expected to be more than enough to offset any negative changes, ensuring solid expansion. But grain trade is an exception. After a very strong performance in the past twelve months, a reduction seems likely.
Prospects for economic activity around the world are mixed. A modest pick up in GDP growth within the OECD group of advanced economies (mainly USA, Europe, Japan and Korea) contrasts with a slowing pattern among emerging economies including China. A recent World Bank report suggested a gradual deceleration in China’s GDP growth to 7.6% in 2014 and 7.5% next year, a prediction which some forecasters view as optimistic.
Global trade in wheat plus corn and other coarse grains is estimated to have increased at a remarkably rapid rate of 12% during the 2013/14 crop year ending last month. The total, mostly comprised of seaborne movements, rose by 32.1m tonnes to reach 300.7mt, based on International Grains Council estimates, as shown by table 1. About one- third of the rise was contributed by a doubling of China’s imports to 19mt.
Resources and Energy Economics, at the end of last month, predicted 7% growth in world iron ore trade (including land movements but mainly seaborne) this year. From 1,225mt last year, the total is estimated to grow by 86mt to 1,311mt. More than half of the incremental volume is expected to reflect a 49mt or 6% increase in China to 869mt.
Despite much greater uncertainty about China’s coal import demand in the next twelve months and further ahead, the Asian region is still seen as a growth area for coal, particularly steam coal purchases. In an extended list of importing countries there seems to be potential for extra volumes.
Based on information from several sources, India remains at the top of the list, with one forecaster pointing to a possible cumulative 44% rise over the next four years, boosting the annual total to 230mt. South Korea could see a 24% rise over the same period, to 128mt. Taiwan also is expected to experience growth and, elsewhere, higher volumes in Malaysia, Philippines, Thailand and Vietnam are envisaged.
In the 2014/15 year now starting, flat or lower purchases are foreseen in a number of the countries which saw sharp rises in the previous twelve months. Most of the global decrease in the current year, however, is expected to be caused by a fading of China’s import demand. In the Middle total of over 130mt, about 2% above the previous year’s
Fertilizer raw materials and semi-processed products are a sizeable element of the minor bulks sector. Estimates of seaborne volumes in 2013 — comprising phosphate rock and processed phosphates, potash, sulphur and urea — point to a East area a slight increase could be seen, accompanied by weakening in North Africa and Europe.
Forecasts of global iron ore trade growth remain upbeat, although this stance is still heavily dependent upon calculations of sustained strong expansion in China’s foreign purchases. Among other importers, European countries, Japan and South Korea could see relatively modest additional volumes in 2014.
A revised forecast published by Australia’s Bureau of volume. Signs of further growth this year, possibly 4–5%, have been seen.
BULK CARRIER FLEET
The Handysize (10–39,999dwt) bulk carrier fleet, contrasting with other size groups, is in a minimal growth phase, as shown by table 2. Following a 1.5% increase two years ago, last year’s 1% capacity reduction could be followed by a 1% increase in 2014 raising the total to 88m dwt. Both newbuilding deliveries and scrapping this year are expected to decrease.