News about dry bulk trade has been mainly positive
in recent weeks. Import demand for many
commodities is strengthening in a large number of
countries and the outlook seems quite encouraging.
Benefits for iron ore, coal, and other industrial commodity
trades are evident. Some signs of a modest pick-up in grain
trade have emerged as well.
But more doubts about future global economic activity
have emerged, with implications for trade movements.
Nevertheless, the latest (end May) OECD forecasts suggest
that the recovery from last year’s downturn will continue.
GDP growth among the advanced countries group — mainly
USA, Japan, EU and Korea — could average 2.7% in 2010 and
2.8% next year. China’s growth rate is expected to slacken
only from 11.1% this year, to 9.7% in 2011.
Prospects for grain trade during crop year 2010/11 beginning
this month are becoming clearer. International Grains Council
calculations point to a slight increase in world wheat and
coarse grains movements after the sharp decline in the
previous twelve months. The total is forecast to rise by
about 1%, reaching 233.6mt (million tonnes), following a 7%
fall, as shown in table 1.
This prediction could change if summer 2010 domestic
harvests in northern hemisphere importing countries are
different to what is currently expected. Indications of
additional foreign purchases have been seen in North Africa,
where grain output probably will be lower. North African
imports may be 10% higher at 33.9mt in 2010/11.
Conversely, Middle East requirements are likely to continue
diminishing, by 6% to 38.6mt.
Estimates of iron ore trade typically show a large annual
increase this year, followed by further growth. But a large
part of the 2010 expansion may have been seen already in
the first six months, after which a flattening phase seems
likely in the second half, amid a levelling-off of steel
The latest Abare quarterly outlook suggests that world
iron ore trade — including land movements, but mostly
seaborne — could grow by 8.5% in 2010, reaching 1032mt,
and by 7.2% in 2011, to 1106mt. Most of this year’s import
growth is expected to take place outside China. Iron ore
imports into Japan, the European Union and Korea are
predicted to rise by a combined 71mt or 30%, to 311mt
while China’s quantity could advance by 14%, to 637mt.
Favourable influences are prominent in both the steam coal
and coking coal sectors. Improvements in steel output in
most of the raw materials importing countries are boosting
coking coal consumption and import demand. However, if
pig iron production flattens in many countries in the 2010
second half, coking coal imports will be affected.
Greater confidence about another increase in China’s coal
imports this year has emerged recently. In 2009 China
imported 126.6mt, over 200% above the previous year’s
figure, of which more than two-thirds was steam coal. This
dramatic upturn raised the Chinese proportion of world
imports to about 15%. Further growth will reflect differences
between prices for Chinese domestic and international
supplies, amid strongly expanding consumption.
A wide range of ‘minor’ bulk trades, some of which are
actually very large, is benefiting from the recovery in
industrial activity now under way around the world.
Additional import demand for steel products, cement,
bauxite/alumina, forest products and other commodities
used direcly or indirectly in construction and manufacturing
has been visible.
BULK CARRIER FLEET
Many of the ships employed in minor bulk trades are
Handysize (10–39,999 dwt) vessels. This size group’s capacity
decreased marginally last year when scrapping exceeded
newbuilding deliveries, as shown in table 2. During 2010
the Handysize bulk carrier fleet is set to resume expansion
briskly, increasing by about 5%, as a result of much higher
newbuildings and, probably, lower demolition sales as well.