Global sea trade boosted by China

Statistics now available confirm that employment of merchant ships in the world fleet greatly benefited from China’s upsurge in imports last year.

The new data confirms what previous signs showed was happening. Most of the large increase in global seaborne trade during 2023 reflected expansion of commodity imports into China. Without that boost, global sea trade growth would have been minimal.

A fully reliable account of changes awaits more accurate figures and the picture is therefore provisional and subject to revision. But it is already clear that remarkable upsurges in China’s commodity imports were recorded. Coal in particular was a star performer, leading the advance.

Quantifying 2023 growth

Reported official customs figures and calculations derived from these and other data, some of which is partly guesswork, provide estimates of the changes unfolding. On this basis evidently additional volumes into China in 2023 comprised over four-fifths of the entire increase in the world seaborne imports total.

Extra volumes of coal received formed a large proportion of China’s overall imports rise last year. After a low volume in the preceding twelve months, coal imports rose by 181 million tonnes or 62%, reaching 474mt, including land movements but mostly seaborne. Even when an adjustment is made for higher land movements from Mongolia, this outcome still implies a huge expansion of seaborne trade. China is one of the world’s biggest coal buyers.

Iron ore also saw strong growth in 2023. The total rose by 73mt (7%) to reach 1.18 billion tonnes. Imports of this commodity into China comprise about three-quarters of the global volume and so are especially significant for bulk carrier employment.

Another massive commodity volume imported is crude oil, contributing about one quarter of the world total. Reported figures for volumes received also include land (pipeline) trade forming about a tenth of China’s overall crude oil imports. Last year the overall total rose by 56mt (11%), to reach 564mt, equivalent to 11.3 million barrels per day.

Liquefied natural gas imports also appear to have risen. Estimates from other sources suggest that these may have seen a rebound of about 10% to around 71mt in 2023, after falling steeply in the previous year.

Looking ahead

Is this pattern repeatable in 2024? Current signs arguably suggest that another imports surge on the same scale is unlikely, although some individual components could see upwards trends continuing. But it seems worth emphasising that signs seen at the outset for the year ahead often prove at best only partly reliable, because of unforeseen events and changing influences.

Last year’s advance in coal, iron ore and crude oil imports looks likely to weaken. At the moment it is difficult to envisage how influences that were the main drivers, in the past twelve months, will fully maintain the growth trends, or that other positive changes could enable a similar outcome.

In the coal segment, there are especially prominent doubts about sustained growth. Several influences combined to result in the remarkable 2023 imports increase. Among these were unusually low imports in the previous year, the Chinese economy’s rebound and higher energy usage after pandemic controls were lifted, reduced hydro-power supplies, a need to enhance energy security by ensuring sufficient coal stocks, and attractive international coal prices. A repeat performance this year is not currently predictable.

A cautious view of China’s cargo imports in 2024 points to little or no growth, with a possibility of a downturn after an exceptionally robust performance during the past twelve months. If this perspective proves correct, some negative consequences for employment of ships in these trades are likely.

Please contact the author if you have any questions or comments, at: [email protected]

Any opinions expressed by contributors do not necessarily reflect the views of the Chinese Shipping Association of London. Content provided are for informational purposes only.

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