This week’s update on the resilience of Chinese coal imports from Australia confirms a continued resurgence year to date echoing the trend observed before the end of March. In the third week of May, there are indications that the Capesize market segment is showing resistance, with rates in the Brazil to North China route seemingly holding firm and not expected to drop before the end of the month. However, there’s a growing number of ballasters in Southeast Africa, introducing uncertainty regarding the segment’s firmness for the summer season.
A positive development in the iron segment is the demand growth for Capesize ship services, driven by news of Chinese stimulus measures aimed at bolstering the property sector. The week began with iron ore prices climbing to a three-month high. Iron ore futures surged to their highest level in three months on Monday, with the most-traded September iron ore on China’s Dalian Commodity Exchange (DCE) closing 1.
1% higher at 894.50 yuan ($123.72) per metric ton.
Earlier in the session, the contract reached as high as 906 yuan, the highest since Feb. 20. China’s announcement of “historic” steps on Friday to stabilise its property sector contributed to this upward trend.
The central bank is facilitating 1 trillion yuan in additional funding and easing mortgage rules, while local governments are set to purchase “some” apartments. These measures are expected to positively impact iron ore demand and shipping activity in the Cape.
