Very Positive Signs in China For Dry Bulk Market
The China Iron and Steel Association (CISA) announced last week that it anticipates Chinese iron ore imports will increase this year by anywhere from 40 to 90 million tons.
No forecast is ever guaranteed to play out to fruition, but it is noteworthy that such a large increase is now expected. In comparison, imports grew last year by only 6 million tons.
Also encouraging is that lending has recently surged. China’s new loans last month totaled 2.85 trillion yuan. This marks a month-on-month jump of 1.94 trillion yuan (215%) and a year-on-year jump of 1.16 trillion yuan (69%).
The first three months of 2020 have now seen Chinese lending grow year-on-year by 22%. In comparison, during all of last year it increased by only 4%.
The coronavirus outbreak has certainly changed the Chinese government’s attitude regarding lending and debt, and massive stimulus will likely be very beneficial for the dry bulk market.
We continue to expect strong steel production in China and a surge in iron ore imports later this year.
Source: Commodore Research & Consultancy