A look at Chinese 3q20 Iron Ore, Coal and Soyabean ImportsPosted on 23 Oct 2020
By Derek Langston, Head of SSY Research
One of the most extraordinary trade developments in 2020 has been the magnitude of dry bulk import growth in China.
As the chart the below shows, combined imports of iron ore, coal (including lignite) and soyabeans surged to a quarterly record in the 3q, judging by customs data. Indeed, the annual gain in volumes during the first nine months of 2020 was the largest for three years - in a year when the country endured widespread industrial lockdowns in the 1q.
At the heart of the growth has been steel demand, pushing iron ore imports to a monthly record in July and lifting 3q imports to 321.6 Mt in the process. Benchmark delivered iron ore prices climbed to a six and a half-year high in September. At 29.5 Mt, China’s 3q soyabean imports marked a quarterly record, as demand for animal feed continued to recover from the effects of swine fever outbreaks across the country from 2018 onwards.
In marked contrast, coal imports underperformed year-ago levels significantly in the 3q, sliding 30.7 Mt year-on-year to 65.4 Mt. The potential for a recurrence of coal import controls in China by year-end represents one of the downside risks for dry bulk trade in the 4q in a year when China’s import demand has played a crucial role in supporting freight markets.
SSY Consultancy & Research
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