Amore cheerful picture of the global economy has been taking shape recently. This outlook augments other signs pointing to growing dry bulk trade amid some notable positive influences among importers in various parts of the world. Indications of increasing grain and soya volumes add to the upwards trend in industrial commodity movements.
The latest (early September) OECD forecasts are slightly more encouraging than previous assessments. In the advanced economies group (mainly USA, Japan, South Korea and European Union) second quarter 2013 GDP growth sharply improved, exceeding 2% annualized, and this stronger pace is expected to be maintained during the second half of the year. China’s growth has slowed but a pickup now seems to be unfolding.
World grain trade could increase by about 2% in the present 2013/14 crop year which started in July, reaching 269mt (million tonnes), according to International Grains Council calculations. But this predicted outcome is heavily dependent upon expectations of a large expansion of China’s wheat, corn and barley imports. These are forecast to rise by 86%, to 17.1mt. An expected stronger advance in soya trade also reflects larger Chinese imports. US Dept of Agriculture estimates summarised in table 1 show global soyabeans and meal movements, in marketing year 2013/14 beginning October, rising by over 9%, to 163mt. Lower domestic production of beans in China, coupled with rapidly growing meal and oil consumption trends and relatively low stocks could boost import demand.
Sharply different production experiences, among steel mills in the principal raw materials importing countries, underline contrasts among iron ore purchasers. Some noticeable output reductions have been seen in the first eight months of this year, when EU crude steel production declined by 5%, to 109.3mt compared with last year’s same period, and South Korea’s output was 6% lower at 43.5mt.
Conversely, during the January–August 2013 period, Japan’s steel industry raised its output by 1% to 73.2mt, while China’s mills achieved a remarkable 8% expansion to 521.8mt. Together with the beneficial impact of relatively low iron ore port stocks and competitive international prices, iron ore imports into China in the same months also rose by 8% to 526.1mt. Many forecasters see this positive pattern continuing.
Global import demand for steam coal, comprising the largest part of seaborne coal trade, still derives valuable advantages when new coal-fired power stations start up in countries dependent on foreign supplies. The latest example is in Japan, where a major plant is being commissioned.
This new Japanese power station consists of two generating units with a combined capacity of 1,600 megawatts. Over a full year’s operation, assuming that demand for the electricity generated utilizes the plant’s capacity fairly fully, well over 3mt of coal from foreign sources could be required. The added volume will support Japan’s imports amid continued closure of most of the nuclear power plants.
Steel products trade (coil, sheet, plate and other items) is a major component of the minor bulk commodities sector. According to some estimates, seaborne volumes may increase by around 10mt during 2013 as a whole, reaching around 290mt. One especially strong element is European Union imports, which reports suggest are likely to jump rapidly this year.
BULK CARRIER FLEET
The global fleet of Panamax (65–99,999dwt) bulk carriers could prove the fastest growing size group in the current year. Newbuilding deliveries are expected to decline, as shown in table 2, but scrapping also seems set to diminish. The outcome is likely to be about 9% fleet expansion during 2013, to just under 186m dwt at year-end. This modest deceleration follows 12–13% annual expansion in the past three years.