Indications pointing to additional dry bulk commodity import demand around the world are clearly visible. But some restraining influences are also very prominent. These signs suggest that global seaborne trade growth in this sector during 2015 will not be as robust as seen last year.
The outlook for economic activity in several key areas has improved slightly, although not enough to imply more than a modest positive impact on dry bulk trade. Estimates published recently by the OECD organization showed an upwards revised forecast for GDP in the OECD area. Prospects for Japan and eurozone countries are looking a little more encouraging. However, China still seems to be facing an extended slowing trend.
Predictions for trade in wheat and coarse grains during the current 2014/15 crop year ending June have been raised again. Instead of the sharp fall previously envisaged, a 1% increase to 309mt (million tonnes) is now shown by International Grains Council estimates. Although imports into China and the European Union are set to weaken, other countries’ larger purchases could provide a full offset.
by Richard Scott, Bulk Shipping Analysis
In the soyabeans and meal category, a world trade increase of over 3% in marketing year 2014/15 ending September is predicted by the US Dept of Agriculture, raising the total to almost 175mt (see table 1). The strong upwards trend in China’s soyabeans imports appears set to continue, while higher volumes into other Asian countries and elsewhere seem likely.
Another sizeable global iron ore trade expansion is foreseeable this year, amid lower international ore prices resulting from the massive growth of supplies entering the world market, especially from Australia. These additional volumes are expected to displace higher cost iron ore supplies, particularly output from domestic mines in China.
Updated forecasts, published last month by the Australian Government’s Department of Industry, suggested that world iron ore trade could grow by 57mt or 4% in 2015, to 1,393mt. The calculations point to most of the growth among importers being contributed by a large 46mt (5%) increase in China’s imports, which could reach 935mt. In Europe, Japan and South Korea potential for growth seems very limited.
Prospects for coal trade seem to have deteriorated, amid further weakness in China’s import demand and signs that this downwards trend may be set to persist. There is also uncertainty about Europe's requirements. Not all aspects are negative, however, as India’s purchases remain buoyant and could continue expanding, while there are some favourable signs elsewhere.
Unfavourable influences affecting China’s coal imports in the early months of this year have been evident. Following the country’s sharp import decline in 2014, reducing the annual total (including low-quality lignite) by a huge 35mt, down to 292mt, a pattern of weakening seems to be evolving. Last year, much higher hydro-electricity output amplified the adverse impact on coal usage of government measures to control air pollution and shift towards cleaner fuels.
Among minor bulk commodities, a large element consist of steel products (coil, sheet, plate and many other items). Global seaborne steel products trade has been on a rising trend, and apparently increased robustly to reach about 305mt last year, including sharply higher US imports. Another, perhaps smaller, global increase could be seen this year.
BULK CARRIER FLEET
Within the Panamax (65–99,999 deadweight tonnes) bulk carrier segment, world fleet growth could continue decelerating in 2015. During the previous twelve months, Panamax fleet capacity rose by 8.5m dwt (4.6%), reaching over 193m dwt at year-end, as shown in table 2. Newbuilding deliveries are expected to decrease this year, while scrapping may be higher, although both of these key influences are difficult to forecast accurately.