China’s Dry Bulk Trade Volume on the Rise

Lower values of China’s dry bulk exports have triggered shifts in major routes. In a recent weekly report, shipbroker Xclusiv Shipbroking said that “China, the world’s second-largest economy suffered a sharp decline in exports and imports in July in terms of value, adding to a prolonged trade slump. In dollar terms, exports fell 14.5% year over year, the steepest drop since the start of the Coronavirus pandemic in February 2020, while imports declined 12.4%, the largest decline since January 2023 when a wave of infections hit the mainland. That reduction is more than expected, if we consider that major commodities prices have significantly reduced y-o-y, with coal price being 65% down, while iron ore, steel and crude oil prices have fallen by around 9%, 10% and 13% respectively. In the meantime, in July, Chinese banks extended the fewest monthly loans since 2009, indicating continued sluggish demand in the world’s second-largest economy and raising the likelihood of sustained deflationary pressures. Banks made only RMB 345.9 billion ($47.8 billion) in new loans in July, down from RMB 3 trillion in June”.

According to the shipbroker, “however, in terms of quantities, we have witnessed a significant increase in both China’s main imports and exports. More specifically, from January to July 2023, China exported 39,796,000 tonnes of steel products, almost 28% up compared to the same period of 2022. A similar increase was also noted in China’s main imports. During the first 7 months of 2023, China has increased slightly grain imports by 5% and iron ore imports by 7% to 96,959,000 tonnes and 669,456,000 tonnes accordingly compared to the same period of 2022.

China’s coal and lignite imports stood at 39,260,000 tonnes in the first seven-month period of 2023, an increase of almost 90% in comparison with January to July 2022’s imports, with hopes that increase may continue at a steady pace for the rest of the year due to favourable international market prices and the country’s zero-tariff policy. Steel products were the commodity that reduced both in terms of quantity and value, as China’s steel products imports fell to 4,419,000 tonnes from January to July 2023, almost 33% down compared to the same period of 2022. Furthermore, from January to July 2023, China imported 4,504,000 tonnes of refined petroleum products almost double compared to the similar period of 2022, while also increasing its crude oil imports by 12% to 43,686,000 tonnes”.

The shipbroker added that “the paradox of Chinese imports decreasing in value but increasing in quantity has not left China’s routes unaffected. Reviewing the major Baltic TCEs from Baltic Exchange, as of 10th August, the Capesize China – Brazil round voyage has increased by around 15% in a yearly basis. Moving to Panamax TCEs, South China, Indonesian round voyage (BPI-P5_82) paid USD 7,747/day on 10th August 2023, almost 51% down compared to a year ago. During the same period, Supramax rates have lost momentum compared to a year ago. More specifically, the US Gulf trip to China – South Japan (BSI- S1C_58), the North China trip to West Africa (BSI – S3_58), and South China trip via Indonesia to South China (BSI-S10_58) are down by roughly 46%, 66% and 47% respectively. On the Handysize, the North China-South Korea-Japan trip to South East Asia (BHSI – HS7_38) and the North China-South Korea-Japan trip to North China-South Korea—Japan (BHSI – HS6_38) have decreased by around 60% each during the past year. On the other hand, Russian’s invasion of Ukraine as well as the western sanctions boosted the wet market, skyrocketing freight rates. Focusing on China’s crude tanker routes, the West Africa to China (BDTI-TD15), the US Gulf to China (BDTI-TD22) and the Middle East Gulf to China (BDTI-TD3) have increased by 60%, 88% and 28% respectively”, Xclusiv concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide

Source: Hellenics Shipping News