BULK CARRIER TRADE & FLEET OUTLOOK
Doubts about dry bulk trade
O
ver the past couple of months doubts about strengthening commodity imports into many countries have multiplied. Events affecting import demand, and also export supplies, point to intensifying restraints on growth in world seaborne dry bulk trade during 2022, resulting in last year’s robust recovery fading. Earlier expectations of a slowing world economy have been accentuated in recent weeks by clearer signs of rapidly rising inflation, exacerbated by the impact of the war in Ukraine, and weakening progress in China. In midApril the International Monetary Fund commented that “global economic prospects have been severely set back”. The IMF forecasts world GDP growth decreasing to 3.6% in 2022 (after last year’s 6.1% rebound), a reduction of almost one percentage point from its previous estimate.
COAL Upheavals in the global energy market have been a feature this year, resulting in higher international prices for all the main energy commodities, including coal. Supply shortfalls, actual or potential, are affecting trade flow volumes and altering patterns of trade. Slowing economic activity in many countries will restrict overall energy usage, but coal import demand could be solidly supported. While some observers still foresee limited growth in coal trade in 2022, others are less optimistic. Analysts at the Australian Government’s industry
department, in their latest quarterly update, predicted that world trade in coal (including land movements, but mostly seaborne), could decline by 37mt (million tonnes) this year. The volume is a 3% reduction, from 1,382mt in 2021, to 1,345mt. Almost all of that fall is expected to be concentrated in the steam coal segment.
IRON
ORE
Benefits for raw materials movements derived from higher steel demand and output this year now seem likely to be smaller than predicted earlier. The construction activity and manufacturing production recovery after the pandemic is becoming more muted as adverse influences unfold. Global steel output in the first quarter of 2022 was 7% below the level of last year’s first three months. The World Steel Association’s updated short-range outlook published in mid-April emphasized the “high uncertainty” surrounding demand forecasts. WSA calculations suggest that global steel demand may be virtually unchanged this year, after growing by 3% in 2021. In China, an expected flat performance this year follows a 5% decline in the past twelve months. In the remainder of the world, which achieved a notable 13% rebound last year, the 2022 increase may be under 1%.
GRAIN &
SOYA
Prospects for grain and soya trade have deteriorated. The impact of weakening
import demand in some countries is now accompanied by pressure from large shortfalls in Black Sea supplies, amid the conflict in Ukraine. Recent US Department of Agriculture calculations indicate that overall world trade in wheat and coarse grains, plus soyabeans and meal, could total 658mt in trade year 2021/22. This volume is about 1% below the quantity recorded in the previous twelve months. Among buyers, weakness is most apparent in China, where the import total could decline by 16mt or 10%, to 145mt, including large reductions in corn and soyabeans purchases.
MINOR
BULKS
A sub-category of the minor bulks segment is comprised of ‘agricultural’ commodities including various oilseeds and meals, rice, sugar and a range of fertilizers. These trades together are estimated to have totalled over 420mt last year and signs suggest a similar outcome in the current period.
BULK
CARRIER FLEET
About two-fifths of the entire world fleet of bulk carriers is comprised of Capesize and larger vessels, statistically defined as ships of 100,000 deadweight tonnes and over. This fleet grew by more than 4% last year, as shown by table 2, after several years when 3–4% growth was seen. But in 2022 a deceleration to a 1–2% increase is envisaged, reflecting lower newbuilding deliveries and perhaps higher scrapping.
www.drycargomag.com
TABLE 1: STEAM COAL IMPORTS IN KEY ASIAN COUNTRIES (MILLION TONNES) Japan South Korea Taiwan China# India Total of above
source: various & BSA estimates
2017 121.0 116.0 58.2 118.7 152.7 566.6
#excluding lignite
2018 119.8 117.5 58.4 122.4 171.3 589.4
2019 116.8 109.9 56.8 124.6 186.2 594.3
2020 110.4 93.2 52.9 132.3 161.3 550.1
2021 119.0 94.3 58.2 150.4 148.0 569.9
2022* 122.0 93.0 58.0 135.0 160.0 568.0
*BSA forecast
MAY 2022
TABLE 2: CAPESIZE (100,000DWT & OVER) BULK CARRIER FLEET (MILLION DEADWEIGHT TONNES)
DCi 2
Newbuilding deliveries Scrapping (sales) Losses Plus/minus adjustments Feet at end of year % change from previous year-end
2017 15.3 6.4 0.3 0.1 323.9 +2.8
source: Clarksons (historical data) & BSA 2022 forecasts
2018 14.3 3.1 0.0 –0.1 335.0 +3.4
2019 19.0 5.9 0.0 0.0 348.1 +3.9
2020 25.0 11.4 0.5 0.0 361.2 +3.8
2021 19.0 3.4 0.0 0.0 376.8 +4.3
2022* 11.0 5.5 0.0 0.0 382.3 +1.5
*BSA forecast
by Richard Scott, Bulk Shipping Analysis, Tel: +44 (0)12 7722 5784; Fax: +44 (0)12 7722 5784; e-mail: bulkshipan@aol.com
