by Richard Scott, Bulk Shipping Analysis,
Recent indications of global commodity import demand in the twelve months ahead suggest that a cautiously optimistic outlook is still justified. After last year’s pick up in the growth rate, world seaborne dry bulk trade seems set to continue expanding firmly in 2018, although there are doubts about quite how strong this advance will prove.
Most current forecasts of global economic output point to a further improvement this year. However, while average GDP growth for the world as a whole could rise, several individual economies which are key dry bulk importers may see reduced increases. Based on the latest IMF estimates for 2018, China, Japan and the European Union are unlikely to repeat last year’s economic growth achievements.
One major contributor to dry bulk trade expansion during 2017 was iron ore, which saw an increase of around 4%, according to provisional estimates. While a large proportion of the incremental volume consisted of China’s additional imports, there were positive changes among other countries.
An exception to the general pattern over the past twelve months was Japan’s iron ore imports, which declined by 3% to 127mt (million tonnes). Elsewhere imports into the EU, South Korea, Taiwan and several smaller importing countries rose, boosted by stronger steel output. China’s extra
51mt, raising annual iron ore imports to 1075mt, was the largest contribution. During 2018, the upwards trend could be sustained.
As more complete information on world seaborne coal trade over the whole of last year emerges, it seems that growth was faster than earlier signs indicated. Expansion may have been in the 5–6% range, according to some estimates. If that calculation proves accurate, it will be a remarkable upsurge after previous weakness.
Uncertainty about coal trade both in the short term and further ahead remains valid, given environmental pressures. Nevertheless, imports into many countries, especially in Asia are still growing and are likely to continue expanding. Analysts at Klaveness Research estimate that among rises in 2017 India’s imports rose by 2% to 197mt, while a group of Asian emerging economies — Malaysia, Vietnam, Philippines, Pakistan and Bangladesh — saw a 26% increase to 82mt.
Changing patterns in world grain trade are clearly visible, amid evolving slight growth in the total annual volume. During the current 2017/18 crop year ending June, exports from the USA and Australia are expected to be much lower, contrasting with upturns in Argentina and Brazil, accompanied by strong expansion in Russia’s exports, as
reflected in the figures shown in table 1. Updated International Grains Council forecasts published last month show a 2% rise in global wheat plus coarse grains trade within the present crop
Changes predicted among importers
are limited, but variations among exporters are likely to be more noticeable. The recovery in Brazil’s corn production, leading to exports jumping by well over 20mt, to 34mt in 2017/18 from 13mt in the preceding year is especially prominent. Russia’s good harvest could raise grain exports by 25%, to 45mt.
Positive influences were seen in the minor bulk trades sector during the past year and some are expected to persist, resulting in further growth. Global seaborne movements of bauxite and alumina are an example. These are estimated to have totalled 130mt in 2017, a 14% increase. Forest products trade also appears to be strengthening.
BULK CARRIER FLEET
The deadweight carrying capacity of the world bulk carrier fleet grew by about 3% to 817 million deadweight tonnes at the end of 2017, according to Clarksons Research and is expected to see a further enlargement of around 2% this year, as shown in table 2. It seems certain that newbuilding deliveries will fall sharply in 2018, but scrapping also may be much lower.