Despite uncertainty about how solidly the global economy is likely to grow in the period ahead, there is optimism about dry bulk trade expansion. Clear signs of larger commodity movements on a number of routes have emerged. Many importing countries are expected to need higher volumes of minerals, fuels and other commodities.
Indicators of economic activity and industrial output in several key areas seem moderately encouraging. China’s growth has recently shown signs of regaining momentum, while the Japanese economy — benefiting from new government policies — appears poised to break out from a lacklustre performance and become more robust. The USA is also apparently strengthening, but the European Union looks set to remain subdued for most of 2013.
Within the grain (including soya) sector of the dry bulk market, an upwards trend in soyabeans and meal trade is expected to continue. According to US Dept of Agriculture estimates summarized in table 1, the world total could increase by 4.1mt (million tonnes) or 3% in marketing year 2012/13 ending September, reaching 154.6mt.
However, much of the global soya trade growth envisaged is likely to be contributed by China’s extra requirements. Some recent signs suggest that USDA’s 63mt forecast for China’s soya imports may prove too high. In the wheat and coarse grains global trade component, imports into China in 2012/13 are forecast by the International Grains Council to decline by 16% to 8.4mt, partly explaining why world grain trade is weakening.
Steel production trends in the main raw materials importing countries, over the past few months, have broadly reflected economic activity patterns. The impact of recession is clearly seen in the EU’s depressed crude steel output, which has been well below volumes seen in the early part of last year. A recent European Steel Association report indicated that domestic EU steel demand could see a further (marginal)
reduction this year. Yet the outlook for global iron ore trade is widely
regarded as positive. In 2013 a 53mt increase, to 1,176mt, is forecast by Australia’s Bureau of Resources and Energy Economics in its latest quarterly review. Slightly higher imports into Japan and some other countries are expected to be accompanied by strong growth in China, where a 28mt rise to 773mt is estimated.
Both steam and coking coal sectors look set to benefit from higher import demand in a range of countries during the twelve months ahead. Asian importers are the main focus, especially India and China, although others may contribute limited additional volumes.
Some reports point to a possibility of higher coal imports into Japan in 2013, adding to last year’s 5% growth, which raised the annual total to 184mt. The largest element, steam coal imports, comprising three-fifths may be boosted by additional power station usage amid continued closure of most of the nuclear generation capacity. Two large new coal-fired power station units are scheduled to begin operating later this year.
One of the largest individual commodity trades in the ‘minor’ bulks sector is steel products (such as coil, sheet, and plate). Provisional estimates suggest that seaborne movements may have expanded by about 4% last year, reaching around 280mt, and further growth is envisaged this year.
BULK CARRIER FLEET
While expansion of the world bulk carrier fleet as a whole seems set to continue decelerating in 2013, the Panamax (60-99,999 dwt) size group could almost maintain its previous rapid pace, as estimated in table 2. Panamax newbuilding deliveries probably will remain very high. Assuming that scrapping recedes, 13% growth in this fleet is foreseeable, but if scrapping is maintained or rises, then less rapid fleet growth will emerge.