by Richard Scott, Bulk Shipping Analysis
Although the view is still broadly positive, prospects for global commodity movements in the period ahead have been overshadowed by the imposition of additional tariffs on some US imports. A widening interna- tional trade dispute could have adverse effects on world seaborne dry bulk trade, which currently is expected to see further solid growth during 2018 and into next year.
Forecasts of economic output (goods and services) published in mid March by the OECD organization were generally upbeat, with the proviso that an escalation of trade tensions could have a negative impact. Currently, GDP in the G20 group of countries is estimated to reach 4.1% in 2018 and a similar rate next year, after the improved 3.8% achieved last year, despite the slowing envisaged in China.
GRAIN & SOYA
Recent signs point to a continued robust upwards trend in soya movements. World imports of soyabeans and meal could total 214mt (million tonnes) in the present 2017/18 marketing year ending September, based on US Department of Agriculture estimates, as shown in table 1. This volume is 5% above the previous annual figure.
Increased imports into China are a large contributor, but many other countries are expanding their purchases. Robust consumption trends, coupled with insufficient or lack of domestic soya production underpins this strength.
While China’s imports, which comprise over two-fifths of the total, are predicted to increase by 4% to 97mt in 2017/18, other countries together including Asian and European importers could raise their volume by 6%, to 117.5mt.
Analysis of key influences affecting the global steel industry suggest that production changes in 2018 will not be as favourable for raw materials trade as seen last year. An expectation of limited or no growth in China’s steel output, or possibly even a decrease, may not necessarily have a corre- sponding effect on the country’s iron ore imports, however. Increasing emphasis on higher-quality foreign ore supplies may provide extra support.
Elsewhere around the world there are prospects for some growth in steel production this year, although at a slower rate. A recent calculation by consultants MEPS indicated a 2.6% increase in the world (excluding China) total, about half of last year’s rise. Positive results were foreseen in many countries including the European Union.
Restraints on coal consumption, resulting from environmental policies and increasing emphasis on alternative energy sources in many countries, are clearly visible. But, despite this back- ground, global seaborne coal trade strengthened last year and a further
increase in 2018 is seen as a possibility. Statistics contained in a recent IEA report provide a useful perspective. During 2017, a good year for the world economy, global energy demand rose by 2.1%. Oil demand grew at a similar 1.6% rate, while natural gas saw a 3% rise and renewables (wind, solar and hydropower) expansion satisfied a quarter of all incremental world energy demand. Yet global coal demand still rose, albeit at a marginal 1% rate, mainly due to extra power generating,
especially in Asia.
Global trade in steel products (coil, sheet, plate and other items) seems likely to be disrupted by the new US tariffs on imports from some countries. How much patterns of movements will change is not yet clear.
World seaborne cargoes amount to a huge volume of around 400mt annually and a large part is not directly affected by controls on US imports, which totalled 30mt in 2017.
BULK CARRIER FLEET
Last year growth in the world fleet of Panamax size (65–99,999dwt) bulk carriers accelerated to almost 3%, as shown in table 2. But expansion probably will be much reduced in 2018 amid lower newbuilding deliveries, possibly accompanied by lower scrapping. This size group comprises about one-quarter of the entire world bulk carrier fleet.