Steel raw materials trades fading?

Further signs of negative influences affecting commodity imports have been emerging recently. The outcome seems likely to be flat or slightly lower world seaborne dry bulk trade in 2025 as a whole, compared with last year. Nevertheless aspects of this outlook remain difficult to predict. Amid continuing uncertainty about the extent of assumed adverse consequences from international trade policy changes, prospects for world economic activity in the near future and later have become more cautious. Forecasts of global growth in gross domestic product, the most widely used indicator, are now showing a downturn after last year’s over 3% enlargement, to below 3% this year. Implied restraint in consumer or business investment spending patterns could affect some dry bulk movements.

 

A downturn in China’s iron ore imports, the biggest individual dry bulk commodity trade, is becoming more likely during 2025. Despite buoyant exports of steel products, output of steel in China is being restrained by slack domestic demand, while high stocks of iron ore are also a restricting influence. Elsewhere, among other importers of steel raw materials, there are only very limited signs of positive influences potentially sufficient to substantially offset lower volumes into China. For example a 30–40mt [million tonnes] (2–3%) reduction in China’s iron ore total this year, from 1,241mt last year, may be only partly compensated. Several large buyers including the European Union, Japan and South Korea appear likely to see flat or possibly lower imports.

 

After a remarkably strong performance by global seaborne coal trade over the past two years, the trend’s direction may be changing. Among the largest importers there is an absence of positive pointers. An exception may be Vietnam where imports have continued to rise, reaching 69mt in 2024 and could increase again. Lower volumes into both India and China, together comprising almost half of the world coal trade total, are envisaged this year by some forecasters. Indications of impending weakness are perhaps most visible in China, where the market seems well supplied by domestic production and accumulated stocks. In many countries steps to deter coal usage are having an adverse impact on import demand, particularly in the steam coal segment.

 

Prospects for grain and soya trade in the new 2025/26 year approaching are now a greater focus of attention. For wheat, about a third of the total, the marketing year begins on 1 July. For the remainder, corn and other coarse grains plus soyabeans and meal, the year starts on I October. Trade is expected to recover after the present year’s large reduction. In an initial forecast revealed a few weeks ago, the US Department of Agriculture calculated that world wheat and coarse grains trade (including land movements but mostly seaborne) may be about 5% higher. In the current 2024/25 year, a 10% decline to 418mt is estimated, mainly reflecting China’s massive reduction. Figures for the year ahead are tentative, however, because of uncertainties about harvests in both importing and exporting countries.

 

Among minor dry bulk commodities related to industrial processes, raw materials inputs and outputs of products, clear indications of additional volumes are not prominent except in the bauxite/alumina segment where trade may increase rapidly. Steel products and forest products trade may be flat or lower.

 

The Handymax size group (including Supramax and Ultramax vessels) in the 45–69,999dwt range, comprises almost a quarter of the world bulk carrier fleet. During the past twelve months Handymax capacity grew by 4%, after several years of similar growth rates. In 2025 higher newbuilding deliveries than seen last year are expected and, assuming steady scrapping, growth could be slightly faster than previously.