China’s import of iron ore will continue to be a key driver for the demand growth in 2017 for the dry bulk shipping industry, alongside shipping of grain, according to a recent forecast by BIMCO.
This is emphasised by an accumulated growth rate for 1Q17 of 9.5% compared to the same quarter of 2016. Furthermore, it is the highest imported amount of seaborne iron ore for a first quarter.
The international shipping association indicated that the growth rate of Chinese imported iron ore in 2016 was constant throughout the year, as the annual volume broke into landmark territory. Both the total iron ore import and total seaborne iron ore import volumes for 2016 exceeded 1 billion t for the first time ever.
He continued: “The Chinese demand for steel grew by 1.4%, which has increasingly been from construction and increased public spending on physical infrastructure works”.
China imported 71.3 million t of iron ore more in 2016 than the previous year, as the total Chinese import of iron ore increased 7.5% compared to 2015. The total Chinese import of seaborne iron ore achieved a growth rate of 7.7%, which is 72 million t more in 2016 compared to 2015. Chinese imports of iron ore by land dropped 4% in 2016 compared to 2015, which is 0.7 million t less.
“Despite a growth of 7.5% in total imported iron ore for 2016, the growth in Chinese steel production remained limited at 1.2%. said BIMCO’s Chief Shipping Analyst Peter Sand. “The reason for the increase in imported iron ore originates from China substituting domestically mined ore of low iron content for imported ore of much higher iron content and thereby, squeezing more domestically sourced Iron ore out of the market.”
Thereby, China has imported more iron ore via sea in 2016 compared to 2015 and less iron ore via inland transportation in the same period. This is the best possible scenario for the dry bulk shipping industry, as land borne sources are being substituted for seaborne providers.
Read the article online at: https://www.drybulkmagazine.com/dry-bulk/19042017/chinese-iron-ore-imports-to-drive-dry-bulk-shipping-demand/