by Richard Scott, Bulk Shipping Analysis
Various signs point to a sizeable increase in global seaborne dry bulk trade during 2015. Import demand around the world, for many commodities, almost certainly will rise but, after last year’s slower growth, a decelerating pattern seems to be evolving. There is still a heavy dependence on the expansion of China’s commodity purchases.
Strengthening momentum in global economic activity could provide a more solid backdrop for trade movements. Additional demand for the products of industries importing dry bulks can be expected to have a beneficial effect. The recent large reduction in oil prices, assuming that it persists, will boost many economies. Although China’s slowing mode is predicted to continue, a gradual pick up elsewhere may be seen.
After growing rapidly last year, world seaborne iron ore trade could expand by 62mt (million tonnes) or about 5% in 2015, to 1,398mt as shown by table 1. Other forecasts suggest higher growth is likely. Most of the extra volume probably will be bought by China, the dominant importer, similar to the pattern seen in previous years. Predictions therefore reflect assumptions about key influences shaping Chinese purchases.
A rise in China’s imports this year of about 6%, raising the total to 990mt, is part of the overall iron ore trade forecast. An enlarging proportion of ore from foreign suppliers, displacing domestic supplies, is a key influence. Among other importers including Europe, Japan and South Korea, additional volumes are also envisaged.
The upwards trend in coal trade evidently ceased last year, but growth could resume during 2015. Higher volumes of both steam and coking coal trade are foreseeable. Steam coal, the largest portion, comprising almost three-quarters, is still benefiting from growing power station usage of imports in some countries. In the coking coal segment higher steel production at blast furnace mills using this coal type, in several areas, could provide more impetus.
Overall world seaborne coal trade during the year ahead
is forecast to grow slightly by 22mt or 2%, reaching 1,215mt. Positive indications for a number of importers in Asia are apparent, but there is considerable uncertainty about China’s purchases after last year’s big reduction. India also is a major focus of attention, but the outlook for these imports seems favourable, amid an increasing dependence on foreign coal supplies.
Vigorous growth in grain trade last year may be followed by only a limited further rise in 2015. However, forecasts for this commodity, especially beyond about six months ahead, are highly speculative. This feature reflects the difficulty or impossibility of predicting weather patterns which will determine both importers’ domestic harvests and exporters’ production volumes.
World seaborne grain trade (including wheat, corn and other coarse grains plus soyabeans) may be fairly flat this year at 376mt. During the conventional crop year used in statistics, a 2% wheat and coarse grains trade reduction in the current period ending June 2015 is indicated. Conversely, soyabeans trade in the period ending September could be 2% higher, assuming increased imports into China.
The large and varied minor bulks sector comprises about one-third of global seaborne dry bulk trade. Following last year’s estimated flat performance overall, resumed expansion of about 3%, to 1,540mt seems likely in 2015. Advantages for industrial bulks related to manufacturing and construction, the largest part, could evolve from reviving economic activity in several regions.
BULK CARRIER FLEET
A further slowdown in the world bulk carrier fleet’s expansion over the past twelve months could be followed by an acceleration in 2015, as shown by table 2. An increase of 41m deadweight tonnes or over 5%, to 797m dwt at end- 2015 is estimated. Despite an envisaged rise in scrapping, higher newbuilding deliveries are set to ensure robust fleet growth.