It All Boils Down to China
The total amount of seaborne import of iron ore reached 1,054 million tonnes breaking the record of 1,006 million tonnes from the year before, BIMCO’s figures show.
“Chinese imports of iron ore have been a reliable key driver in this decade of dry bulk shipping demand growth. Not only is China repeatedly importing larger volumes, it is also sourcing most of its imported iron ore from seaborne exporters with more than 98 pct of the imports arriving via the sea,” BIMCO’s Chief Shipping Analyst Peter Sand said.
The biggest exporters of iron ore to China are Australia (62 pct), Brazil (21 pct) and South Africa (4 pct).
Chinese seaborne coal imports have once again provided strong support to dry bulk shipping demand by increasing 12 pct in 2017, compared to 2016. In 2017, China imported a total of 228.5 million tonnes of coal via the sea compared to 204 million tonnes in 2016.
“The import of US coal is highly beneficial to the dry bulk shipping industry as it has a strong multiplying effect on demand, as it provides some of the longest possible distances. Chinese importers accept a journey of up to 45 sailing days when they import coal from Norfolk, Virginia and Baltimore, Maryland,” Sand added.
Finally, Chinese imports of crude oil marked an increase in both volume and distance. The country’s seaborn import of crude oil was up 10 pct last year when compared to 2016, surging to 7.8m bpd.
China is importing 93 pct of its crude oil via the sea, with the three biggest exporters being Russia, Saudi Arabia and Angola.
As explained by Sand, the distances are growing as well, taking into account that the average sailing distance was around 7,600 nautical miles in 2017, compared to 7,100 nautical miles in 2016.
“Thereby, the crude oil tanker shipping industry is experiencing the rise in Chinese crude oil demand to the greatest extent, with the growth coming primarily from exporters in Angola, Brazil and the US.
”Tanker demand growth in 2018 is expected to continue the trend seen in 2017, with growing imports in the Far East, and growing exports from the US. This is expected to benefit the VLCC segment the most,” Sand pointed out.