Connect with us

Business

How Chinese Demand For Iron Ore Is Helping To Engender Confidence On The High Seas

When one thinks of commercial projects that were commissioned before the 2007-2009 global financial crisis only to end up gathering dust, it is normally property developments in the construction sector that come to mind. However, there is another industry which suffered very badly as a result of the worldwide crash and which itself ended up with largely redundant structural investments – the Capesize vessel industry.

For anybody that doesn’t know, Capesizes are super-large ocean going cargo ships which carry commodity raw materials like coal and ore all around the world. Like houses and apartment blocks before 2007, many of these bulk carriers were commissioned by companies operating in the Capesize industry to accommodate the perceived need to maintain the relatively confident global trade in commodities.

Needless to say, the subsequent crisis and prolonged fallout conspired to make many of these vessels redundant before they had even finished being built. Indeed, there are some deep water ports in the world today where vessels of this kind can still be seen sitting idly day after day, doing nothing and going nowhere.

However, this could soon be a distant memory.

This is because China, the world’s second largest economy, has increased its iron ore demand significantly in recent times. After experiencing something of a lull (by its own dynamic standards), China’s economy is firing once again; thus it needs iron ore to facilitate domestic necessities like steel production and maintain momentum.

How Chinese Demand For Iron Ore Is Helping To Engender Confidence On The High Seas

However, it is the case that China now has to look to the overseas iron ore market as its own inventories have declined significantly over the last 18-24 months. To this end, the Chinese have been restocking their reserves (regardless of the cost of iron ore) by importing huge quantities from major exporters like Australia and Brazil.

A Recent Report by Shipbroker Intermodal Observed:

‘The surge in iron ore trade has translated into a massive boost in daily earnings for Capes; with the demand for such vessels skyrocketing over the last couple of weeks. The gains noted for Capes are certainly impressive when considering that rates have recovered from below US$ 4,000/day noted back in June 2012!”

Intermodal’s SnP broker Tasos Papadopoulos Commented:

‘Capesize vessels provide the best insight into the health of the Chinese economy; and despite analysts having projected a slowdown in Chinese growth; China continues to import in order to replenish its supply.

Of Course, the Real Question on Everyone’s Lips is:

how long will this last? Will the bubble burst as soon as China finishes restocking?

Mr Papadopoulos believes there is Cause for Optimism:

‘…The present surge looks likely to be sustained for a bit longer, as it appears to be supported by improving fundamentals in China’s steel production and consumption. All the evidence points towards the fact that steel production and consumption in China is to continue to steadily grow, maintaining China’s iron ore imports at healthy levels in respect to the supply of vessels’.

About the author – Bo Heamyan blogs regularly about commodity trading and has written extensively about the benefits of investing in effective business intelligence solutions for a number of websites, including crugroup.com.

Continue Reading
Click to comment

You must be logged in to post a comment Login

Leave a Reply

Recent Posts

IMG_7357 (1) IMG_7357 (1)
Education1 day ago

Best Designing Resources Every Kids Book Illustrator Should Read

As business owners in the world of information technology, our wishes always revolve around getting more and more customers to...

close-up-golden-justice-scale-courtroom_23-2147876801 close-up-golden-justice-scale-courtroom_23-2147876801
Law1 day ago

What to expect from a Criminal Defense Lawyer?

As a member of the close-knit circle of an alleged crime or who is a sentenced criminal looking for an...

Firewood in Sydney Firewood in Sydney
General1 day ago

5 Types of High-quality Firewood in Sydney to Buy for Clean Burning

Homeowners who use firewood to keep their place warm during winters know that different types of wood burn differently. From...

Xamarin-Developers-1 Xamarin-Developers-1
Tech1 day ago

Benefits of Xamarin Mobile App Development

Cross-platform apps are the major game changer of the present industry since there is no need to work on multiple...

3d-low-poly-abstract-background-with-connecting-lines-dots_1048-10499 3d-low-poly-abstract-background-with-connecting-lines-dots_1048-10499
Tech2 days ago

10 Benefits of Guest Blogging for Online Business

If you own an online business, then you need to add guest blogging to your digital marketing mix. Guest blogging...

best places to visit best places to visit
Travel2 days ago

10 Best Cities You Need To Visit In Texas

You might have heard a lot of people say that “Everything is bigger in Texas“. Well, there is no doubt...

Home Improvement3 days ago

7 Most Attractive Bookshelves to Adorn Your Home Decor

Whether you’re an avid reader or a design enthusiast, there is nothing you would love more than a stylish and...

barbie barbie
General4 days ago

Let’s not sit Idle and Paint Something New!

We have already listened countless times that “don’t sit idle” and “try to utilize your time productively.” But did we...

Thailand Thailand
General4 days ago

Get the Best things for Thai Bride

Thailand is rich with beautiful girls, and the enormous piece of them wouldn’t fret dating outsiders. These are about the...

10 Largest Cities In Texas 10 Largest Cities In Texas
Travel4 days ago

10 Largest Cities In Texas By Population (2020)

Western countries are way less populated than eastern ones.  But the west is also playing a part in increasing the...

images (3) images (3)
Lifestyle5 days ago

The Greatest Night Clubs in Las Vegas for Bottle Service

Las Vegas is loaded with the dance club and picking one can be a significant undertaking for somebody who is...

medic-563423_1920 medic-563423_1920
Health1 week ago

Why is Investing in Healthcare is the Best Option for Medical Professionals?

Healthcare industry is considered as one of India’s largest sectors, both regarding employment and revenue generation. It is expected to...

Vial Box Vial Box
Tech1 week ago

The need and use of the Vial Box

There are a lot of healthcare professionals and caregivers that have to assist the living facilities and there are a...

We are currently living in the golden age of nesting. Especially as part of the millennial generation, we gravitate towards nesting - ever-changing and thrifting quite often. We are currently living in the golden age of nesting. Especially as part of the millennial generation, we gravitate towards nesting - ever-changing and thrifting quite often.
General1 week ago

How To Buy an Abstract Rug Online and Avoid the Mistakes Involved

We are currently living in the golden age of nesting. Especially as part of the millennial generation, we gravitate towards...

Disabled Disabled
Entertainment2 weeks ago

Begin Your Love Story With Disabled Dating

We want you to know – you aren’t DISABLED, you are just differently-abled because the only disability in life is...

Categories

Archives

Trending