Dry Bulk: A Shift in Ton-Mile Demand Supported Rates in 2021
According to Banchero Costa, “total iron ore shipments from Australia actually declined by -0.2% y-o-y in the first 11 months of 2021, to 805.3 mln tonnes. On the other hand, total shipments from Brazil surged by +5.6% y-o-y in the same period to 319.0 mln t. Do note however that this is still below the pre- Brumadinho level of 351.0 mln tonnes in Jan-Nov 2018. Brazil now accounts for 22.5% of global iron ore shipments, after Australia’s 56.8%. Mainland China is by far the largest importer of iron ore in the world. In Jan-Nov 2021, China accounted for 69.3% of iron ore shipments. However, iron ore imports to China corrected somewhat in 2021 from the record high levels seen last year”.
The shipbroker noted that “China’s iron ore imports in the 12 months of 2020 increased by a massive +7.2% y-o-y to 1,110.8 mln t, from 1,036.4 mln t in 2019. In 2020, China took advantage of favourably low prices of the commodity when most of the rest of the world was shut down in lockdowns. In 1Q 2021, things were still positive: China imported 276.0 mln tonnes of iron ore, which was a positive +7.3% y-o-y increase from what was a low base in 1Q 2020 (which was at the peak of the Wuhan events). In 2Q 2021, imports into China declined back to 260.0 mln tonnes, which was a disappointing -3.6% y-oy decline from 2Q 2020. Things were even more disappointing in the seasonally strong third quarter. In 3Q 2021, imports into China improved only slightly to 268.6 mln tonnes, which was down -10.0% y-oy from 3Q 2020. More worryingly, it was even lower than the 269.2 mln tonnes imported in 3Q 2019. The fourth quarter is looking bad as well. October 2021 saw 99.7 mln tonnes, which was down -7.4% y-o-y from the record 107.7 mln t in Oct 2020. In November 2021 there were just 77.0 mln tonnes, down -16.1% y-o-y from 91.8 mln tonnes in Nov 2020”.
Banchero Costa also noted that “overall in the first 11 months of 2021, China imported 981.4 mln tonnes of iron ore, which was down -4.2% y-o-y from the 1,024.6 mln tonnes in Jan-Nov 2020, but still up by +4.3% from 940.5 mln tonnes the same period of 2019. In terms of sources for China’s iron ore imports, things changed also due to geopolitical considerations. Australia still remains by far the top source of iron ore for China, with a 66% share so far this year.
That said, iron ore imports from Australia to China in Jan-Nov 2021 declined by -4.5% y-o-y to 647.1 mln tonnes, from 677.5 mln tonnes in the same period last year. Brazil remains in second spot with a 22% share. Imports to China from Brazil increased by +2.2% y-o-y to 215.0 mln tonnes in the Jan-Nov 2021 period, from 210.3 mln tonnes in the same period last year. Volumes from South Africa declined by -19.8% y-o-y to 26.5 mln tonnes, and from India increased by +11.4% y-o-y to 14.0 mln tonnes. From Peru volumes increased by +7.2% y-o-y to 15.7 mln tonnes. From Canada they were down -19.6% y-o-y to 13.6 mln tonnes”, the shipbroker concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide