- Iron Ore: Seaborne volumes rose by 2.4%, with longer-haul shipments boosting ton-days by 3.4%.
- Coal: Modest 1.4% increase in volumes, but ton-days declined due to low port congestion.
- Grain: Marginal 0.7% growth, with shifts in trade patterns benefiting smaller vessels.
- Steel: Chinese steel exports surged, impacting trade dynamics with the US and Asia.
Iron Ore: Longer-Haul Shipments Drive Growth
Seaborne iron ore volumes expanded by 2.4% year-on-year (y-o-y) in 2024, while ton-days saw a stronger 3.4% increase. The disproportionate growth in ton-days was driven by an 18.3 million metric ton (mt) rise in shipments from Brazil and increased flows from non-Pacific exporters like Peru (+13.3%), Ukraine (+330%), and Mozambique (+17.4%). These longer-haul shipments contributed to a 15.3 million mt increase in non-Pacific flows.
In contrast, shorter-haul shipments from Australia to the Far East grew by 9.7 million mt. This shift supported Capesize and Very Large Ore Carrier (VLOC) demand, particularly in early 2024.
Meanwhile, India’s iron ore exports declined by 6.4 million mt, largely due to reduced Chinese demand and rising domestic steel production. While China absorbed most of the global supply increase (+26.8 million mt), Japan saw a 5.3 million mt decline in imports.
China’s outbound iron ore shipments also grew by 17.6%, reaching 20.7 million mt, primarily to Japan, Taiwan, and South Korea. Around 70% of these shipments were handled by sub-Capesize vessels.
Despite stable Chinese steel production, surplus arrivals led to significant iron ore inventory accumulation. If these stocks do not decline soon, bulk carrier demand could face headwinds in early 2025. However, the upcoming Simandou project, expected to start by late 2025 or early 2026, could provide a tailwind for iron ore shipping demand.
Coal: China Absorbs Market Shifts Amid Stagnation Risks
Seaborne coal volumes increased by 1.4% y-o-y in 2024, but ton-days dropped by 0.7% as Chinese port congestion remained low. Growth was driven by increased shipments from Indonesia (+27.5 million mt) and Australia (+11.1 million mt), which offset a sharp decline in Russian exports (-26.4 million mt). Russian coal shipments were hampered by logistical bottlenecks, sanctions, and weak global coal prices.
China stepped in to offset demand losses, increasing its coal imports by 44.6 million mt, compensating for declines in India (-11.8 million mt), South Korea (-6.4 million mt), and other regions (-14.1 million mt). European demand remained weak, with the Netherlands importing 7.2 million mt less coal.
Mid-sized vessels, including Overpanamax (+5.9%), Kamsarmax (+15.7%), and Panamax (+9.5%), gained market share at the expense of Capesize (-8.1%) and Ultramax (-10.7%) segments.
Looking ahead, uncertainties surrounding the Ukraine-Russia conflict and shifting US policies could impact Russian coal trade. Additionally, China’s dominant role in coal imports raises concerns over long-term market stability, particularly with major players like China Shenhua Energy suspending new spot purchases due to high stockpiles.
In Europe, Germany’s coal demand is under pressure due to economic struggles and declining coal-fired capacity. The political landscape, including energy policy shifts, could further impact coal trade patterns in the coming years.
Grain: Shifting Trade Patterns Favor Smaller Vessels
Seaborne grain volumes edged up by 0.7% y-o-y in 2024, with ton-days increasing by just 0.4%. The lack of significant expansion prompted mid-sized vessels to shift focus to coal shipments.
Brazilian grain exports fell by 22 million mt, while US shipments grew by 18.9 million mt. Meanwhile, Ukrainian exports rebounded by 10 million mt as Black Sea tensions eased, and Argentina saw a 17.8 million mt increase. However, these gains were offset by a 21.6 million mt decline from other exporters.
China’s grain imports dropped by 22.2 million mt, largely due to record-high domestic harvests and ample stockpiles. Instead, demand shifted to Egypt (+8.6 million mt) and other regions (+19.7 million mt), leading to a more fragmented trade landscape.
This shift favored geared vessels, with Handysize and Handymax grain volumes rising by 6.1% and 1.0%, respectively, while ton-days increased by over 10% for both segments. If China’s demand remains weak in 2025, competition among mid-sized vessels may intensify, particularly with an influx of new Kamsarmax deliveries expected.
Additionally, with Panama Canal operations stabilizing and a potential rebound in Suez transits in late 2025, voyage distances could shorten, impacting overall ton-days.
Steel: Trade Shifts Amid US Policy Changes
Steel trade data from AXSMarine highlights notable shifts in 2024. The US continued to receive most of its seaborne steel imports from Brazil, benefiting from proximity. However, South Korea and Vietnam also played significant roles as major suppliers from the Pacific basin.
China’s steel exports surged by 11.3 million mt, with Vietnam and South Korea being the top destinations. This trade pattern has raised concerns in the US, potentially prompting broader tariff measures beyond specific companies to include allied nations as well.
With the US adopting a more transactional approach to trade under its “America First” agenda, global steel trade relationships are likely to be shaped by strategic economic and foreign policy objectives. These evolving dynamics could significantly impact steel shipping trends in the years ahead.
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Reference: BRS shipbrokers & Breakwave Advisors
