The world’s top commodities buyer reduced energy and metals imports in the first half this year as COVID-19 restrictions ravaged its economy although Beijing has pledged to support growth through stimulus measures.
China’s demand for commodity shipments is expected to improve in the fourth quarter as investments in infrastructure projects and steel production pick up pace, while Beijing ramps up oil products exports, senior shipping executives said.
The world’s top commodities buyer reduced energy and metals imports in the first half this year as COVID-19 restrictions ravaged its economy although Beijing has pledged to support growth through stimulus measures.
But China’s steel production has shown signs of improvement, while the outlook for commodities demand was supported by the prospect of easing COVID-19 lockdowns, Berge Bulk’s Chief Executive Officer James Marshall told Singapore International Bunkering Conference and Exhibition (SIBCON) 2022.
“We are quite confident in Q4 in terms of dry bulk rates and the volumes going into China in particular,” Marshall said.
China’s steel production had recovered from a low point in June, which is an optimistic indicator for the dry bulk sector, said Marshall, who operates one of the world’s leading independent dry bulk fleet.
He said that the easing of pandemic lockdowns in China could boost the resumption of economic activity and lift infrastructure spending.
Jacob Meldgaard, chief executive officer at global refined oil products carrier TORM, is also optimistic about robust orders for ships in China’s shipbuilding industry into next year.
The growth in orders is expected to support demand for commodities such as iron ore, according to Meldgaard.
Meanwhile, Beijing’s decision to allow refiners to export more refined oil products will lead to a surge in demand for oil products tankers.
China could play an important role in the world’s refinery system to supply missing barrels into Europe, Meldgaard said.
The European Union is expected to ban seaborne Russian crude and oil products in December and February, respectively, as part of sanctions on Russia for the Ukraine invasion, a move that will tighten global oil markets.
