Dry bulk trade has been robust so far in 2021, as China’s iron ore imports have been quite strong so far. In a recent weekly report, shipbroker Banchero Costa said that “2021 so far has proved very robust in terms of iron ore trade. Total global loadings in the first 6 months of 2021 were up +3.3% yearon-year to 761.4 million tonnes, according to vessels tracking data from Refinitiv. This was higher than the 726.0 mln tonnes in the first half of 2019, a year which was affected by the Brumadinho dam disaster. However it was also higher then the previous all time record 759.9 mln tonnes in the first half od 2018.
According to Banchero Costa, “in terms of tonne-miles, things are even more positive, as trade has massively shifted in favour of long haul shipments from Brazil to Asia. Total iron ore shipments from Australia actually declined by -0.9% y-o-y in the first half of 2021, to 434.4 mln tonnes. On the other hand, total shipments from Brazil surged by +14.7% y-o-y in the same period to 163.9 mln tonnes. Do note however that this is still below the pre- Brumadinho level of 178.1 mln tonnes in 1H 2018. Brazil now accounts for 21.5% of global iron ore shipments, after Australia’s 57.1%. South Africa is third with just a 3.6% market share. Mainland China remains by far the largest importer of iron ore in the 12 months of 2020 increased by +7.2% y-o-y to 1110.8 mln tonnes”.
Source: banchero costa &c s.p.a.
The shipbroker added that “the strongest part of last year was in the second and third quarters. In 1Q 2020, China imported 257.2 mln tonnes of iron ore, which was a negative -1.9% y-o-y decrease, at a time when the country implemented strict lockdowns following the Wuhan outbreak. In 2Q 2020, the Covid-19 situation stabilised, and iron ore imports surged to 269.6 mln tonnes, up +18.9% y-o-y, as traders took advantage of cheap commodity and bunker prices. In 3Q 2020, imports to China surged further to 298.4 mln tonnes, which was up +10.9% y-o-y. In 4Q 2020, volumes softened somewhat but still remained robust, at 285.6 mln tonnes, +2.7% y-o-y. Things remained very strong also in 1Q 2021, with China importing 277.1 mln tonnes of iron ore, which was a +7.7% y-o-y increase from the same period last year, and an all time record for a first quarter”.
Banchero Costa also noted that “the second quarter of 2021 was definitely less positive, with 260.7 mln tonnes, down from 1Q 2021 (which in itself is surprising, given that the first quarter is always affected by the Spring Festival holidays) and also down -3.3% y-o-y from the second quarter of last year. June 2021 was particularly poor. With 83.1 mln tonnes it was down -7.6% m-o-m from May 2021, and down -9.7% y-o-y from June 2020. Overall in the first 6 months of 2021, China imported 537.8 mln tonnes of iron ore, up +2.1% y-o-y In terms of sources of iron ore imports to China, things shifted a lot. Australia is still the top iron ore exporter to China, despite all the politics.
Source: banchero costa &c s.p.a.
One can say that it’s just because there is no alternative, even though China is clearly trying… Imports to China from Australia declined by -2.2% y-o-y to 356.0 mln t in the first 6 months of 2021, from 364.1 mln tonnes in 1H 2020. Australia now accounts for 66.2% of Mainland China’s iron ore imports. The second largest source for China’s iron ore imports is Brazil, accounting for a 20.6% share. Shipments from Brazil to China increased by +18.4% y-o-y to 110.5 mln tonnes in the first 6 months of 2021, from 93.3 mln tonnes in the same period of 2020. This was above the pre-Brumadinho level of 99.1 mln tonnes in 1H 2018. Volumes from India to China surged by +63.6% y-o-y to 11.2 mln tonnes so far this year. From Peru they are up +21.6% y-o-y to 11.1 mln tonnes. From Canada it’s +45.0% y-o-y to 8.6 mln tonnes”, the shipbroker concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide
https://www.hellenicshippingnews.com/china-iron-ore-imports-boost-the-dry-bulk-market/
