A varied outlook for commodity import demand around the world is evolving. Global seaborne dry bulk trade evidently has been holding up firmly after last year’s upturn but potential for further growth in 2024 seems uncertain and perhaps limited.
Several influences are contributing to a supportive global economy, although a strong improvement this year seems unlikely. The latest update by the OECD organization published at the beginning of May suggested that continued gross domestic product growth “at a modest pace” is achievable, and risks to the world outlook “are becoming more balanced”. Declining interest rates amid receding inflation are expected to provide benefits for economic activity and dry bulk trade.
Following last year’s recovery, a flat or marginally higher volume of world seaborne iron ore trade could be seen in 2024. Several importers may see larger purchases, but the performance of China will probably have the largest influence on shaping the outcome due to its dominant position, as shown by the breakdown in table 1.
During the first four months of this year China’s iron ore imports totalled 412mt (million tonnes), rising by 7% from the same period a year earlier. However, port inventories have enlarged and crude steel production was 3% lower in the January–April period. Amid a weaker property market that comprises a large part of the country’s domestic steel consumption, there are doubts about support for iron ore trade in the months ahead despite stronger exports of steel products.
Restricted import growth or possible downturns, in coal imports by the two largest buyers — India and China —together comprising almost half of the world total, are envisaged during 2024. Elsewhere, including many European countries and some Asian importers, growth prospects are heavily constrained by continuing advances in the shift towards cleaner energy supplies.
According to a new report published last month by energy think tank Ember, in 2023 record renewable electricity generation (the sector in which coal use is concentrated) propelled the world “towards a new era of falling fossil generation”. Expansion of solar and wind power in particular is steadily diminishing coal’s market. Renewable sources provided 30% of world electricity requirements during 2023.
More attention is now being focused on prospects for grain and soya trade in the new 2024/25 year approaching. 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/ meal, the year starts on 1 October. Trade is expected to be fairly flat.
The US Department of Agriculture, in its first forecast for 2024/25 revealed a few weeks ago, suggested that world grain and soya trade may be marginally higher by under 1%. In the current 2023/24 year a 24mt or 4% increase to 693mt is estimated. But the calculation for the year ahead is tentative, mainly because weather conditions affecting harvests in both importing and exporting countries are unpredictable.
Higher volumes of industrial raw materials and products movements could provide additional impetus for the minor bulk segment this year. Positive signs have emerged in some of the biggest components, the steel products, forest products and bauxite/alumina trades, as well as in other ores and minerals.
Among bulk carrier size groups, the handymax (including Supramax and Ultramax) category of ships with a 40–69,999 deadweight capacity comprises over 20% of the entire world bulk carrier fleet, as detailed in table 2. During 2023 Handymax capacity grew by over 3%, sustaining a trend of fairly steady annual expansion rates in recent years. Amid increased newbuilding deliveries and low scrapping this year, similar growth is likely to continue.