Chinese coal imports rise 27.8% in first four months, defying pandemic
Iron ore imports have also remained resilient, posting growth of 5.3% in the first four months of the year to 358.4 million tonnes. The extra 18.2 million tonnes of iron ore and 26.8 million tonnes of coal imported by China this year, translates into an additional 225 Capesize loads (200,000 tonnes) or 600 Panamax loads (75,000 tonnes) compared to last year.
However, the increase in demand has not been enough to lift freight rates in the struggling Capesize market. Having otherwise recovered from their lows in late February/early March when the Baltic Capesize Index (BCI) fell below 0 (-372 on 9 March 2020), freight rates have once again dropped significantly to only USD 2,082 per day on 13 May, their lowest level since Q1 2016, with the BCI falling back into negative territory on 13 May at -17 points.
Freight rates must reach USD 15,300 dollars per day for an average Capesize ship to break-even. On average this year, Capesize ships have lost USD 9,961 per day. BIMCO expects rates to recover slightly but on average remain at loss-making levels for the rest of the year.
An average, a Panamax ship needs USD 10,200 per day to breakeven which, given the year to date average earnings of USD 7,026, has resulted in appalling bottom lines to spot trading ships.