Every month, 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, a service that’s been serving Ship Owners, Brokers and Traders for over a decade.
Highlights:
Steel
The World Steel Association estimated Chinese crude steel output in the first seven months of 2023 at 626.5 million tonnes, up 2.5% year-on-year. India’s output over the same period totalled 79.9 million tonnes, up 9.0% year-on-year.
Baosteel reported at the end of August that China will continue to implement a cap on growth of steel output this year. The state-owned company confirmed that China will need to cut back on steel production over the remainder of the year to match last year’s output.
Rio Tinto and a consortium of Chinese state-owned enterprises have announced that they had reached key agreements with the government of Guinea to build a trans-Guinean railway. Over 600 kilometres of rail with port facilities would unlock the world’s largest undeveloped deposit of high-grade, low-impurity iron ore in the Simandou mountain range. It has been agreed that the cost of the railway will be shared equally between the groups developing blocks 1 and 2 in the north and blocks 3 and 4 in the south. The Chinese decision to support the plan can be seen as a move to wean itself off reliance on Australian iron ore supply and signals a long-term boost to Capesize bulk carrier demand.
Coal
The IEA expects a decrease in global coal-fired power generation in the second half of 2023 more than offsetting the first half gains. Global coal demand is projected to remain flat in 2024, with declines in power coal for the electricity sector offset by increases in industrial sector coal demand as economic conditions improve.
The National Statistics Bureau reported that China’s coal production totalled 377.54 million tonnes in July, down 6.3% month-on-month when measured on an average daily tonnage basis and the lowest level since last October. The drop in output has been attributed to increased government mine safety inspections and to pricing of seaborne coal imports remaining competitive.
Aluminium
The International Aluminium Institute reported that global primary aluminium production fell 0.48% year-on-year in July to total 5.861 million tonnes, with 59% produced in China. However, global production in the first seven months of this year totalled 40.07 million tonnes, up 1.5% year-on-year.
China’s National Bureau of Statistics reported that the country’s primary aluminium production in July totalled 3.48 million tonnes, up 1.5% year-on-year. Output in first seven months of 2023 totalled 23.62 million tonnes, up 2.8% year-on-year.
Grain
The US Department of Agriculture’s August forecast updates contained a notable downward adjustment to 2023/24 grain season trade forecasts. Looking across export trade forecasts of the principal commodities (wheat, coarse grains, rice, soyabeans, and soyabean meal), net changes saw an overall trade decrease of 8.62 million tonnes, a fall of 1.16%. 2023/24 wheat export trade was marked down by 2.23 million tonnes with lower shipments out of Canada and the US only partially offset by a rise in the estimate for Russian exports. Ukrainian wheat exports were held at 10.5 million tonnes despite the ending of the Black Sea Grain agreement. Ukrainian wheat supply was marked up by 3.5 million tonnes due to a higher area harvested and increased yields (the second highest on record). However, most of this additional supply was added to storage.
Following on from its recent partial ban on rice exports, there were recent reports that the Indian government is now considering imposing a ban on sugar exports in the new marketing season starting in October. Back in May, the US Department of Agriculture forecast Indian sugar exports in the 2023/24 season at 7 million tonnes. TradeViews estimate that sugar exports in the current marketing season is likely to be just over 11 million tonnes. A decision on sugar exports will be taken when firm estimates of sugar production become available.The Indian government was also reported to be mulling importing Russian wheat at discounted prices to boost supplies and curb food inflation ahead of state and national elections next year.
Click here to open the full report. https://tradeviews.net/reports/dry-forecasting-report-september-2023/ .
Posted on September 8, 2023
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