In many countries around the world, import demand for
dry bulk commodities is expected to strengthen over the
next 12 months. Raw materials and other industrial
commodity trades are set to expand. The outlook has
become more promising as clearer signs emerge of a
sustainable global economic recovery under way. Rapid bulk
carrier fleet growth also will be seen.
The latest IMF forecasts published at the end of January
suggest that economic activity in the advanced countries
group (mainly USA, EU, Japan and Korea) could grow by
+2.1% in 2010. This prospective recovery, although sluggish
by past standards, would be a great improvement compared
with last year’s painful –3.2% GDP contraction. Emerging and
developing economies are expected to lead the upturn this
year, with average +6% growth.
Downturns in coking coal imports in a large number of
countries were visible last year, amid severely weakened
steel production, including lower volumes in Asia, as shown
by table 1. One exception was China, which saw a very rapid
expansion to about 35mt (million tonnes) — from 7mt in the
previous year — amid severe shortages of domesticallymined
coking coal. During 2010 a widespread pick-up is
foreseeable, with extra European demand also contributing.
Global steam coal trade last year was hit less hard by
adverse influences and seems to have grown marginally.
Over the next 12 months, based on recent Abare estimates,
world steam coal trade (including land movements, but
mostly seaborne) could increase by just over 3%, reaching
735mt, after a 1% rise in 2009. Higher imports into Asian
and European countries are expected.
Steel production increases in most of the principal raw
materials importing countries seem likely in 2010. China’s
upwards output trend could continue while, in Japan, the EU,
South Korea and Taiwan, after very large falls last year,
upturns are foreseeable. Recovery in these countries began
to emerge clearly during the past quarter.
World Steel Association figures for 2009 emphasize the
depths of the crude steel production slump. Compared with
the previous year, production was down by 30% in the
European Union, at 139.1mt, and down by 26% in Japan, at
87.5mt. Korea’s volume was 9% lower at 48.6mt, while
Taiwan’s fell by 21%, to 15.8mt. By contrast, China’s output
was up by 14%, at 567.8mt.
There are still few signs of an improvement in global grain
import demand ahead. Prospects for summer domestic grain
crops in the main northern hemisphere importing countries
are being closely watched, but it is too early in the growing
season to identify any reliable indications of potential
An unusual combination of reduced purchases in all the
large importing areas is currently a prominent feature. As a
result, in crop year 2009/10 ending June, global wheat and
coarse grains trade is likely to fall by 8%, to 229.4mt, based
on recent International Grains Council calculations. Lower
volumes into the Middle East, North Africa, Asia and Europe
Weaker aluminium production had unfavourable effects on
bauxite/alumina import volumes last year. But in 2010, trade
could pick up as a consequence of strengthening aluminium
demand among the main consuming industries. Last year
primary aluminium output fell by 19% in Europe, and by
18% in North America. It was also down marginally by 1%
BULK CARRIER FLEET
Over the next 12 months the bulk carrier fleet is set to
expand rapidly, boosted by sharply higher newbuilding
deliveries, which could exceed 60m dwt in 2010 as a whole.
Last year the newbuildings total is estimated to have risen to
around 43m dwt, a massive 77% increase, as shown by
table 2. Capesize deliveries in 2009 were up by over 150%,
accompanied by large rises in other size groups.
by Richard Scott, Bulk Shipping Analysis