by Richard Scott, Bulk Shipping Analysis,

Limited optimism for dry bulk trade

Prospects for further growth in global seaborne dry bulk trade seem to be quite limited. Indications of rising import demand for commodities are still visible, around the world, but many are not very prominent. In some of the largest individual trade movements, flat or reduced volumes in 2016 are foreseeable.

One aspect is the subdued progress of several key economies. Forecasts continue to be downgraded. In the USA, Eurozone and Japan, this year’s GDP growth could be slightly slower than seen in the previous twelve months, at 2.2%, 1.6% and 0.3% respectively, according to recent IMF calculations. By contrast, estimates of China’s economic output expansion this year have been raised slightly, to 6.6%.


World seaborne iron ore trade, the largest commodity movement, is expected to increase modestly again in 2016. As shown in table 1, a 2% rise to 1,380mt (million tonnes) appears achievable, mainly resulting from the continued upwards trend in China’s purchases, comprising a high proportion of the global total. Elsewhere, positive signs are less visible.

Among other major importers — Japan, South Korea and the European Union — flat or weaker steel production seems set to result in similar changes in raw materials imports. While in China lower domestic production of iron ore benefits import demand, which consequently can strengthen even when steel output declines, a similar pattern is not evident 

elsewhere. Minor importers are not likely to provide a boost either.


After last year’s large reduction and a previous smaller decline, seaborne coal trade may continue diminishing 2016. Estimates contained in table 1 show a marginal global decrease to 1,103mt, although there is much uncertainty about both the direction and magnitude of change in several key importing countries.

Negative influences affecting coal trade are highly visible. In many countries a long term shift towards cleaner energy sources is well under way. But annual changes in coal import demand are still difficult to predict. Lower imports, especially of steam coal used in power stations — which comprise three-quarters of total trade — are likely in Europe, Japan and India this year. By contrast, China’s imports may be higher.


Compared with last year, changes in import demand strengthening global seaborne grain trade (comprising wheat, corn and other coarse grains plus soyabeans) seem to be less pronounced. Signs of weakness in some importing countries are also evident. The result may be a slight overall 2% increase in 2016, raising the total, to 462mt.

Grain trade estimates are usually somewhat speculative, since calculations are based partly on unpredictable weather conditions affecting domestic harvests in importing countries as well as production in exporting countries.

Since the mid point this year has now passed, the pattern of import demand has become clearer. One of the main changes restraining trade is an expected reduction of China’s grain (but not soyabeans) imports due to very high corn stocks.


Over one-third of all dry bulk trade consists of minor bulk commodities, a varied and extensive group. Commodities related to construction and manufacturing comprise the largest part, with the remainder related to agriculture. Last year the global total appears to have increased, reaching around 1,800mt, and some elements could see further growth in 2016.


The capacity of the world fleet of bulk carriers has continued to slow, and another deceleration is predicted, as shown by table 2. In 2016 the growth rate is estimated at under 2%. Despite the possibility of higher newbuilding deliveries adding to the fleet this year, scrapping of old or uneconomical ships is set to rise, resulting in a smaller net increase in deadweight cargo-carrying capacity.