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Felipe Simian, Nachipa, Chile, explains why minor bulk cargoes are the future in a time where decarbonisation and green solutions are becoming increasingly important.
lobal debates about energy production, shipping policy, and political strategy are currently filled with talk about the demise of hydrocarbons and the arrival of clean technologies. However, it is true today and it will be true for many more years that the two largest bulk cargoes by trade volume are coal and iron ore. In 2019, iron ore and coal’s shares (by volume) of total dry bulk trade were 32% and 27% respectively, together amounting to nearly three-fifths of all dry bulk cargoes. The upturn in demand for the two biggest major bulk cargoes is unlikely to grow from these figures, however. Power production around the world is phasing out coal as a source of energy, and increased steel recycling (particularly in China) is likely to constrain substantial growth from the current levels of iron ore demand. Chinese demand for coal and iron ore is approximately 20% and 60% respectively. Given the economic outlook, only one country could create Chinese levels of steel demand with its industrialisation: India. But there is limited evidence that New Delhi has the will or finances to take this step.
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The shape of things to come
Minor bulks – minerals, metals, grains, cement, etc. – have approximately a quarter share by volume of total dry bulk trade. Yet despite this, they are commodities that are growing much more rapidly. The international effort to create a more sustainable global economy and ‘green’ the world’s energy sources will have an enormous impact on minor bulk cargoes. Take lithium-ion batteries, as an example. They use minerals such as lithium, cobalt, and nickel, and are a much more sustainable energy source that could hugely reduce the use of hydrocarbons. In maritime, the industry is starting to see lithium-ion batteries’ impact in hybrid and fully electric vessels, such as ferries, coastal vessels, and other small passenger ships. Recent months have also seen the expansion of battery technology into larger sea-going vessels with dual-fuelled operations. It is evident that this will continue to develop as the pressure for shipping to reduce its greenhouse gas (GHG) emissions heightens.
