BULK CARRIER TRADE & FLEET OUTLOOK
Slackening grain trade may be ahead ore evidence of strengthening commodity imports into numerous countries has been unfolding. Assuming that the improving trend is durable, global seaborne dry bulk trade’s resumed growth in 2021 could persist through next year, amid industrial activity recovering from the effects of the pandemic. Most forecasts of global economic growth remain upbeat, despite ongoing covid infection problems. If world gross domestic product expands by 5–6% this year, followed by another sizeable increase in 2022, as recovery progresses, prospects for trade in many industry-related bulk commodities seem favourable. Yet some analysts are not entirely certain, pointing to rising potential for an inflationary surge.
M
GRAIN &
SOYA
One element of dry bulk trade which may cease contributing to overall growth is grain. In the past twelve months a further rapid expansion of global trade in wheat plus corn and other coarse grains occurred. But this was entirely due to China’s remarkable increase in imports, which may be partly reversed in the new 2021/22 crop year starting this month. According to International Grain Council estimates published at the end of last month, China’s grain imports reached 60mt (million tonnes) in the past crop year, 2020/21, a 167% rise from 22.5mt. In the twelve months ahead this total could fall to 47.5mt amid improved
domestic supplies and moderating feedgrain demand. Currently there are no signs of a full offset from additional imports into other countries, and so world grain trade in 2021/22 is expected to decline slightly by 7.3mt or 2%, to 418mt, as shown in table 1.
IRON
ORE
Support for the steel industry raw materials trades has been boosted this year by the revival of steel production around the world, as a direct consequence of the industry’s recovery from the most damaging effects of the pandemic. In Europe, Japan and among Asian countries positive trends have emerged and, in China, the recovery which began earlier has continued. Several forecasters see iron ore imports into the European Union, Japan, South Korea, Taiwan and some smaller importing countries growing briskly in 2021. But prospects for world iron ore trade still depend on what happens in China, which comprises three-quarters of the total. Although during the first five months China’s imports were 6% higher at 472mt, there are doubts whether this pace of expansion will be maintained.
COAL Environmental pressures seeking to reduce or eliminate coal consumption are prominent globally. Yet it still seems quite likely that seaborne coal trade will grow this year, albeit probably only modestly, after last year’s large
reduction, as energy demand picks up. Recent forecasts published by the Australian Government showed world metallurgical coal trade increasing by 17mt or 6% in 2021 reflecting steel output recovery, reaching 315mt. By contrast, however, there was less optimism for the bigger thermal coal segment’s progress. Trade in this category is now expected to decrease marginally by 6mt (under 1%) to 1019mt, down from a 4% growth rate envisaged earlier.
MINOR
BULKS
Within the minor bulks sector, fertilizers — including potash, phosphates (rock and processed), sulphur and urea — form a large element which evidently continued growing at 2–3% annually in the past few years, totalling about 190mt in 2020. A further increase could be seen this year base on recent signs.
BULK
CARRIER FLEET
Handysize bulk carriers with a capacity of 10–39,999 deadweight tonnes comprise about 12% of the world bulk carrier fleet. As shown in table 2 this category has seen modest 1–2% expansion annually, to reach 106m dwt at the end of last year, and a similar increase is envisaged during 2021. Both newbuilding deliveries and scrapping may remain quite stable. This low growth contrasts with more vigorous expansion in the larger bulk carrier size groups.
JULY 2021
www.drycargomag.com
TABLE 1: GLOBAL WHEAT & COARSE GRAINS IMPORTS (MILLION TONNES)
DCi 2
Asia (excluding Japan) Japan Middle East Africa Others World total
2016/17 99.7 23.1 54.0 75.4 100.6 352.8
source: International Grains Council, 24 June 2021
2017/18 99.3 23.6 61.5 76.9 108.5 369.8
*forecast
2018/19 89.9 23.7 61.6 72.4 117.0 364.6
2019/20* 104.0 23.7 65.6 82.4 119.6 395.3
2020/21* 147.0 23.2 57.7 81.3 116.2 425.4
2021/22* 135.3 23.6 63.5 79.7 116.0 418.1
July/June crop years
TABLE 2: HANDYSIZE 10–39,999 DWT BULK CARRIER FLEET (MILLION DEADWEIGHT TONNES) Newbuilding deliveries Scrapping (sales) Losses Plus/minus adjustments World fleet at end of year % change from previous year-end
2016 4.6 3.4 0.0 0.0 98.5 +1.3
2017 3.4 1.7 0.0 0.1 100.1 +1.7
2018 3.0 0.5 0.0 0.0 102.6 +2.5
source: Clarksons Research (historical data) & Bulk Shipping Analysis June 2021 forecast
2019 3.0 0.8 0.0 0.0 104.8 +2.1
2020 2.4 1.0 0.0 0.0 106.2 +1.4
2021* 2.5 1.0 0.0 0.0 107.7 +1.4
*forecast
by Richard Scott, Bulk Shipping Analysis, Tel: +44 (0)12 7722 5784; Fax: +44 (0)12 7722 5784; e-mail: bulkshipan@aol.com
