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viewpoint: iron ore
CHINA DRIVE S THE RALLY BY BASIL KARATZAS After years of betrayed expectations, the iron ore and capesize shipping markets are enjoying some time in the sun
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hat a difference a year makes – and we are not talking just about the improved health prospects with the covid19 pandemic since the summer of 2020. We are primarily impressed with the commodities rally and their rejuvenated fortunes, as well as the revitalised prospects of many complimentary industries. In short, last summer industrial activity globally had collapsed since governments imposed restrictions (“essential employees” only were allowed to be present at work) in order to restrain the spread of the virus. Inventories were depleted and commodities were destocked. All along, consumer patterns shifted and supply chains were adversely affected. As the covid-19 vaccine materialised sooner than expected, countries and whole industries struggled to normalise production. But they had to face several complications. When thinking of iron ore at a global level, the discussion effectively is about China – it represents three quarters of the world’s consumption, a great deal of it imported. And here is where it gets interesting. China’s iron ore imports exceed 1bn tons per annum, which by itself is an impressive number and a
BULK TERMINALS
international | SUMMER 2021
