As the global economy will grow again after the new crown virus pandemic, the dry bulk market may develop towards a new wave of demand for raw materials. Shipbroker Intermodal said in its latest weekly report: “As we all know, the amount of steel forged in China exceeds that of the rest of the world combined, even in this unprecedented new coronavirus pandemic, as iron ore imports increase. China also broke a nine-year record, reaching more than 1 billion tons this year. The market price of iron ore is also very optimistic, because in addition to fundamental factors and the current momentum driven by China, as a commodity, iron ore The current trading price of stone is the highest level since the end of 2011 and will increase by nearly 80% by 2020."
Christopher Whitty, Director of Tugboat and Maritime Port Services, said: “China’s iron ore imports mainly come from Australia and Brazil, which play an important role in the dynamics of maritime trade, especially the Capesize freight market. Despite recent tensions between Australia and China Relationship, especially in the coal trade, but we expect that the demand for both materials will be great for the rest of this year, and hopefully this will be the case next year. In the first and second quarters of the new year, all of us At the same time, they all hope to have an effective vaccine so that global commerce can resume to a certain new normal."
Christopher Whitty added: “In terms of coal trade, Australia and Indonesia account for 78% of China’s total imports. The navigation distance between the two countries is very short, and the recent escalation of tensions between China and Australia has led to concerns about Australian coal entering China. The unofficial ban came into effect in early November. In addition, it is reported that China recently signed a US$1.5 billion thermal coal deal with Indonesia, which means that Indonesia is expected to enter the Chinese market in 2021.
"Considering the main driving force of the Capesize freight market-iron ore demand, it is expected that China's demand will remain at a relatively high level in the next 12 months; although if iron ore prices remain at such a high level, many steel companies will not Profitable, Chinese steel companies may seek to slightly reduce production. Iron ore demand in many other countries in the world is expected to remain below its 2019 level, and a series of steel producers in Europe and South Asia will remain closed or slowed down , Unless the price of iron ore drops, production will not resume." Industry analysts said.
"China will announce its five-year plan for 2021-2025 in March next year. The plan is expected to include a renewed focus on infrastructure construction and faster urbanization, especially in the central and western regions of China, which in turn will affect steel Demand. By then, in March, we will have a more positive outlook on the Covid-19 situation and a clearer understanding of the impact of vaccines on more populations and their economies."
Whitty concluded: "At interesting moments before us, let us see how this will affect shipping in the new year.
