by Richard Scott, Bulk Shipping Analysis
Growth-inducing features are identifiable in many dry bulk commodity trades, but grain has been a prominent exception during the past twelve months. This pattern is set to change. Expansion in seaborne volumes of minerals and other industrial bulk cargoes moving is expected to continue, but could be accompanied by an upturn in the grain sector over the period ahead.
Global economic developments are providing only limited support, however. It now seems likely that China’s GDP growth rate in 2013 will not exceed last year’s 7.8%, instead of the slight improvement predicted earlier. And the OECD’s latest assessment of economic growth in the advanced countries group (mainly Europe, USA, Japan and Korea) points to a sluggish 1.2% average this year, marginally below last year’s minimal advance.
Following a downturn in global wheat and coarse grains trade during crop year 2012/13 ending last month, a modest turnaround is foreseen. International Grains Council estimates, summarized below, show the volume edging upwards by 1% in the new 2013/14 year starting July, reaching 263mt (million tonnes).
Increased grain imports into a number of Asian countries, including China, is one positive influence envisaged. North African countries also may need more supplies. Conversely, movements into the Middle East and Europe may decline. However, prospects will remain highly tentative until summer 2013 domestic harvests in northern hemisphere importing areas are more certain. Unexpected weather changes at the end of the crop growing season could alter forecasts.
Signs pointing to higher imports into China are the most positive aspect of the outlook for iron ore trade. A few other relatively minor additional volumes seem quite likely, but the European element is developing negatively amid weakness in steel production caused by the ongoing economic recession.
The latest forecast by Australia’s BREE (Bureau of Resources and Energy Economics) published at the end of
last month provides an optimistic view. Global iron ore trade — including land movements, but mostly seaborne — is expected to grow by just over 5% in 2013, to 1,186mt, followed by faster expansion next year. Within this overall progress, China’s imports are estimated to increase by 4% annually, reaching 805mt in 2014.
Among importing countries expected to contribute to continuing solid growth of world coal trade, the Asian area is the most prominent. But Europe’s rising volumes, a somewhat unexpected trend, have been significant recently as well. However, prospects for individual countries within the European region this year are mixed.
Seaborne coal imports into the EU apparently rose to around 190mt in 2012, with sharply higher steam coal volumes a key feature. While coking coal imports have been adversely affected by steel production weakness, other users of imported coal purchased additional quantities. Steam coal’s competitiveness for power generation is particularly noticeable, although Spain’s large increase last year may be reversed in 2013.
One element of the minor bulk trades group, traditionally described as a ‘major bulk trade’ but no longer justifying that label, is phosphate rock. In 2012 estimated global seaborne movements were about 30mt, slightly above the previous year’s figure. Indian phosrock imports, comprising about one- third of the total, grew sharply last year and look set to increase further.
BULK CARRIER FLEET
Deadweight capacity growth in the Handysize (10–39,999dwt) bulk carrier sector has become minimal, as shown by table 2. This remarkable change contrasts starkly with other bulk carrier size groups where expansion, although slowing, is still rapid. Much lower Handysize newbuilding deliveries during 2013, coupled with substantial scrapping, could reduce the fleet’s growth rate to under the 1% seen last year, which raised capacity to 85m dwt at year- end.