China’s Imports of Commodities Drive a Boom in Dry-Bulk Shipping
The cost of moving goods like iron, coal and corn jumped to a 10-year high this week in a sharp rebound from last year’s industrial downturn
By Costas Paris, The Wall Street Journal
April 27, 2021
China’s surging imports of metals, grain and other commodities are providing a boost to a bulk-shipping sector at the center of global industrial production.
Daily freight rates for capesize ships, the largest bulk carriers, jumped to an 18-month high this week at around $35,000 and the Baltic Dry Index, which tracks the cost of moving commodities by sea, pushed to a 10-year high of 2,808 on Monday.
“It’s been a spectacular period, which is very much off-season,” said Peter Sand, chief shipping analyst at maritime trading body Bimco. “Normally demand falls by around 9% from the fourth into the first quarter. We haven’t seen such demand in a very long time.”
The rebound follows a steep decline early last year as factory production crumbled at the start of the pandemic. China now is stepping up its investment in industrial production to fuel economic growth, and consumer demand in Western economies is growing stronger...
... “China and other economies that import dry bulk are strengthening fast,” said Hamish Norton, president of Greece-based, New York-listed Star Bulk Carriers Corp. , which operates 128 vessels. “Iron, coal, grains, everything moves well at the same time. There is no area of slack. I’m pretty optimistic for an extended period of margin strength”...
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