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Global Bulk Shipping Update: Economic Shifts and Sector Trends


Tradeviews Bulker Forecast Report – Highlights December


Tradeviews review all the recent important stories and events that shape dry cargo bulker demand. The intel from this report feeds their bottom up 5-year forecast.


Click here to open the full report:





Economic


The OECD has released its latest Economic Outlook noting that inflation is easing, but

growth is slowing. Despite stronger-than-expected GDP growth in 2023, tightening financial

conditions, weak trade and subdued confidence are taking a toll. On trade the OECD

commented that not only cyclical but also structural factors are causing a slowdown in the

rate at which value chains are integrating across countries. Global growth is projected to be

2.9% in 2023. It then weakens to 2.7% in 2024 and is forecast to rebound modestly to 3.0%

in 2025.





China


The IMF has upgraded its economic outlook for China following stronger than

expected growth in the third quarter of this year and recently announced new policy

support, namely the approval of a 1 trillion-yuan sovereign bond issue and allowing local

governments to frontload part of their 2024 bond quotas. Compared to the IMF’s World

Economic Outlook published in October, China’s GDP growth in 2023 is raised from 5.0% to

5.4% while GDP growth in 2024 is raised from 4.2% to 4.6%. The IMF noted that continued

weakness in the property sector and subdued external demand could restrict growth

prospects in 2024.


Steel


WSA – The latest October 2023 crude steel production data from the World Steel

Association had global output across 71 reporting countries at 150.0 million tonnes, up 0.6%

compared to October 2022. Chinese output for the month was reported as 79.1 million

tonnes, down 1.8% year-on-year.


Train drivers working for BHP’s Western Australian iron ore division are

taking ‘restrained’ industrial action after rejecting an offer from the company.


China has reportedly added 50 million tonnes of iron ore concentrate capacity this year and

has pledged to increase domestic concentrate supply from 286 million tonnes in 2022 to

370 million tonnes by 2025.


The Chinese government has so far refrained from issuing steel output curbs for the

remainder of this year. One result has been a jump in steel exports. Customs data for the

first ten months of 2023 shows exports up nearly 35% year-on-year at 19.29 million tonnes,

the highest level since 2016.


The German Steel Federation reported that in the first ten months of 2023

crude steel production fell by 4.1 % year-on-year to 30.11 million tonnes.


Over the same period, EAF-based production fell by 12.9% to 8.4 million tonnes while blast-furnaced-based production fell by just 0.2% to 21.7 million tonnes reflecting the high energy price burdenfaced by EAF producers.


POWER COAL FORECASTS


WCA – The World Coal Association has rebranded itself as FutureCoal – The Global Alliance

for Sustainable Coal to counter ‘anti-coal’ sentiment.


WORLD BANK – The World Bank’s latest Commodity Markets Outlook forecasts that coal

prices will continue a downward trend on rising supply and weakening demand as coal

consumption continues to be displaced in power generation and industry. Its benchmark

average Australian coal price is expected to fall by 25.7% in 2024 and by a further fall of

15.4% in 2025.


INDIA – India’s coal ministry reported that the country’s coal production in October totalled

78.65 million tonnes, up 18.6% year-on-year. In a separate report, the coal ministry laid out

plans for a major boost in domestic coal production from the current level of around 1000

million tonnes/year to 1404 million tonnes by 2027 and 1577 million tonnes by 2030. India

is planning to add 80 GW of coal-fired power generation by 2030.


AGRIBULK FORECASTS


– The UN’s Food and Agriculture Organisation’s world food price index declined moderately

in October averaging 120.6 points, down 0.5% from the previous month and down 10.9%

year-on-year. This was helped by the sugar index falling 2.2% from September but it was still

up 46.6% compared to a year earlier.


PANAMA CANAL – The Panama Canal Authority announced that it was cutting booking

slots to 25 per day starting November 3 from an already reduced 31 per day due to a

continuing severe drought. The PCA also advised that that slots will be gradually reduced

over the following three months to just 18 per day from the start of February 2024. These

restrictions are causing some US Gulf grain shipments to Asia being rerouted via the Suez

Canal or Cape of Good Hope adding to voyage distance and vessel demand.


FERTILISER FORECASTS


BRAZIL – Brazil’s state-run oil company Petrobras is returning to the fertiliser sector. The

company has laid out its 2024-2028 strategic plan which includes new investments in

fertilisers and renewable energy with the CEO noting that green fertilisers will be products

of the future. By the end of 2024, Petrobras will resume operations at one fertiliser plant

and is set to complete construction of a second plant by 2028. The company will also work

with firms that it leased two other fertiliser plants to, helping them to regain profitability.


CANADA – The industry group Fertilizer Canada expressed its relief that the strike that

closed St Lawrence Seaway on October 22 ended with a reopening on October 30 allowing

the resumption of fertiliser imports in preparation for spring planting.


MOROCCO – The phosphate producer OCP was reported to have loaded 100,000 tonnes

of fertiliser in a Mini-Cape, apparently the first time that a Cape has hauled such a cargo.

The Patrica Oldendorff departed the port of Jorf Lasfar on 1 November headed for India.

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