Page 188 - ΝΑΥΤΙΚΑ ΧΡΟΝΙΚΑ - ΜΑΙΟΣ 2023

COMMODITIES

tonnes, the highest figure since January 2020. “Our baseline estimate for the year’s second half
That compares to an average of 30.32 million is $90/tonne,” says Marius van Straaten, Com-
tonnes per month in the January-February period modities Strategist at Morgan Stanley. This is a
and represents an increase of 151% from March 28% drop from the current iron ore price of $126/
last year. Analysts attribute the impressive rise ton. On the same wavelength, the Commonwealth
to China’s return to economic activity and the Bank of Australia estimates that iron ore prices
improvement of its (trade) relations with Australia. will drop to $100/ton by the fourth quarter.
In fact, they estimate that coal import flows will In the longer term, Fitch Solutions estimates
be strong in the second quarter as well. that Chinese steel demand will slow over the
Considering China’s role in these ships, the data next decade as the country shifts towards the
on coal imports brings smiles to the bulk carrier service sector and reduces its economic reliance
market. on heavy industry. Nevertheless, China’s demand
for iron ore has also been challenged by a shift
IRON ORE-STEEL to scrap, which is also used as an alternative to
steel production. Morgan Stanley estimates that
The short-term outlook for steel demand for every 1% increase in scrap use, iron ore con-
The World Steel Association has recently released sumption falls by 17 million tonnes annually.
its Short-Range Outlook (SRO) steel demand
forecast for 2023 and 2024. The World Steel GRAINS
Association forecasts that this year, demand will
see a 2.3% rebound to reach 1,822.3 Mt. Steel Global trade revised down for 2022-2023
demand is forecast to grow by 1.7% in 2024 to FAO’s latest forecast for world cereal utilisa-
reach 1,854.0 Mt. Manufacturing is expected to tion in 2022/23 stands at 2,779 million tonnes,
lead the recovery. Still, high interest rates will down 1.0 million tonnes since the last report and
continue to weigh on steel demand. Next year, still pointing to a decline of 0.7 per cent from
growth is likely to accelerate in most regions, but the 2021/22 level. Lower anticipated feed use
deceleration is expected in China. After declining of maise, especially in the European Union, and
by 3.5% in 2022, China’s total steel demand is minor adjustments made for several import-
expected to grow by 2.0% in 2023 and stay flat ing countries on account of smaller expected
in 2024. imports, is the main driver behind this month’s
Steel demand in the developed economies suf- 1.5-million-tonne downward revision to global
fered a sizable contraction in 2022 because of coarse grain utilisation. Now pegged at 1,479
monetary tightening and high energy costs. After million tonnes, global coarse grain utilisation in
falling by 6.2% in 2022, it is expected to increase 2022/23 is forecast to fall 1.6 per cent below the
by 1.3% in 2023. In 2024, a recovery of 3.2% is 2021/22 level. Global wheat utilisation is pegged
foreseen. at 780 million tonnes, fractionally up this month,
The strong post-pandemic rebound of the US reflecting higher than previously anticipated feed
economy has run its course with the Fed’s steep use of wheat in China, and now 0.9 per cent above
interest rate hikes to tackle inflation. Growth in the 2021/22 level. FAO’s forecast for world rice
2023-2024 is expected to be subdued by reces- utilisation in 2022/23 has changed little since
sionary pressure. Furthermore, the spillover from March, pointing to global rice use amounting to
the recent SVB bankruptcy needs to be watched. 519.9 million tonnes, just 0.3 per cent less than
After a fall of 2.6% in 2022, steel demand is the 2021/22 peak.
expected to grow by 1.3% in 2023 and then by FAO’s forecast for world cereal stocks by the
2.5% in 2024. close of the 2023 seasons has been raised by
Steel demand dynamics in emerging and devel- 5.8 million tonnes to 850 million tonnes, but still
oping economies are diverging, with developing pointing to a decline of 0.3 per cent below their
Asia, excluding China, showing more resilience opening levels. Global coarse grain stocks are
than elsewhere. After falling by 0.3% in 2022, still seen heading for a 4.3 per cent fall from
steel demand in emerging and developing econ- their opening levels despite a 2.2-million-tonne
omies, excluding China, will show growth of 3.6% upward revision this month. Most of this month’s
in 2023 and 3.9% in 2024. upward revision reflects expectations of higher
maize stocks in major maise exporting countries
Chinese demand driving iron ore prices due to lower export prospects for Argentina and
Morgan Stanley sees iron ore prices falling as the United States of America and an upward revi-
much as 28% by the end of 2023, given the sion to the production estimate in Ukraine. The
decline in Chinese steel demand and production. forecast for global wheat stocks was also raised

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