Bulk Shipping Watch Newsletter

December 2022

Iron Ore & Steel

Iron ore climbs to four-month high on optimism over China policy in early December

Source: Bloomberg
Iron ore rose to the highest level in almost four months on signs Chinese authorities will announce more support for the property sector at a key meeting in mid-December.
Futures advanced in Singapore, extending a rally from a 45-month low at the end of October to almost 50%. The steelmaking ingredient has been buoyed by a steady stream of policies favorable to the real-estate industry in the world’s most-populous nation. FULL STORY

China’s new iron ore buyer sets off biggest shakeup in years

Source: Bloomberg
China is about to upend the $160 billion iron ore trade with the biggest change in years as Beijing expands efforts to increase control over the natural resources needed to feed its economy.
A new state-owned company called China Mineral Resources Group is poised to become the world’s biggest iron ore buyer as soon as next year, when it will begin consolidating purchases on behalf of about 20 of the largest Chinese steelmakers including leader China Baowu Steel Group Corp., according to people familiar with the situation. FULL STORY

China cuts steel output again as Covid zero and property crisis sap demand

Source: Bloomberg
China’s steel production fell again last month as mills cut output to stem losses and cope with a slide in demand.
Nationwide virus controls, the ongoing property crisis, and the start of winter pollution curbs continued to keep the steel industry on the back foot in November and leave production on course for a second consecutive annual decline. While iron ore prices have rallied sharply in recent weeks in anticipation of China’s reopening, a pick up in end use will depend on government stimulus measures and a stabilization in the real estate market, as well as clearing the worst of the current wave of Covid infections. FULL STORY

Steel may gain little as China eases COVID curbs

Source: Mint
Easing covid-19 restrictions in China may lead to an increase in demand and prices of metals, but the uptick maybe limited, said industry experts.
As the largest consumer of commodities, a pick-up in demand in China can help lift global metals demand and prices amid recessionary concerns in developed economies such as the US and Europe. Rising demand and prices in China will also be key to prevent cheap imports to India and help improve domestic steel prices. However, analysts said that while easing of covid restrictions in China can accrue positives, benefits may be gradual. Domestic steel prices are still near import parity prices, and under pressure. Declining coal prices, however, can accrue benefits on the margins. FULL STORY

Steelmakers enter 2023 at slower pace

Source: Recyclingtoday
In the People’s Republic of China, which currently produces about half of the world’s steel, an overbuilt apartment tower market has likely led to a steel sector due to be scaled back. The Beijing-based China Iron and Steel Association (CISA) has indicated that from Dec. 11-20 this year, its steelmakers produced 1.15 percent less steel compared with the first 10 days of the month. In addition to its overbuilt housing market, China’s economy has been roiled by inconsistent but sometimes draconian COVID-19-related restrictions. The long-lasting restrictions have been lifted this month, which has led to a COVID-19 infection rate reportedly reaching alarming proportions. FULL STORY


Key coal import hubs in China perk up as economy reboots

Source: Reuters
China has played a diminished role in global coal markets in 2022 as the country’s repeated lockdowns to stem the spread of COVID-19 curtailed industry and other coal-burning activities.
The country’s total thermal coal consumption was largely flat over the first half of the year – a sharply slower growth rate compared with 2021 – while imports are on course for their largest annual contraction since at least 2017, data from Kpler shows. FULL STORY

China’s 2022 met coal prices seen bearish, demand to dip on year: sources

Source: S&P Global
Guangdong-based Hongyuan Futures said China’s 2022 average met coal prices are expected to dip below Yuan 2,000/mt ($314/mt). In the early part of 2022, prices will likely remain soft mainly because of the Winter Olympics that starts in February, while prices will continue to be volatile ahead of two important national meetings occurring in the year, according to Hongyuan Futures.
China will hold its most important event of the year, the 20th National Congress, in November, but the National People’s Congress will meet in March to discuss progress on key themes, including national economic development. FULL STORY

China’s coal output up 9.7 percent in Jan-Nov, creating new historical high

Source: SteelOrbis
According to China’s National Bureau of Statistics (NBS), in the January-November period this year, China’s coal production output amounted to 4.09 billion mt, increasing by 9.7 percent year on year.
In November alone, China’s coal production output reached 391.3 billion mt, rising by 3.1 percent year on year, while up 5.7 percent month on month. FULL STORY

China to revise import tariffs on coal from April

Source: SteelOrbis
Seeking to support domestic producers, the Chinese government has decided to revise import tariffs on certain goods, in particular coal. Accordingly, form April 1 next year, the import tariff on coking coal will be three percent, while steam coal will be subject to six percent instead of zero percent duty, to which both coal types are subject from May 1, 2022, to March 31, 2023.
As SteelOrbis reported earlier, in the January-November period this year, China imported 57.4 million mt of coking coal, up 21.53 percent year on year, with Mongolia and Russia being the top exporters of coking coal to China, accounting for 47.6 percent and 33.7 percent shares of China’s total import volume, respectively. FULL STORY

China’s abrupt Covid shift hits supply chains from solar to coal

Source: Bloomberg
China’s reopening is disrupting energy markets as the abrupt shift from Covid Zero shutters industry and upends the usual flow of commodities.
A dramatic surge in infections is having a short-term impact on the supply chain for solar companies, the China Silicon Industry Association said in a statement on Wednesday. Many manufacturers of the wafers used in solar panels have curtailed operations, with some producing at just 60% to 70% of capacity, it said. FULL STORY


China’s soybean market official open to foreign traders

Eight soybean-related futures and options, including No 1 Soybean, No 2 soybean, soybean meal and soybean oil, are officially open to foreign traders at the Dalian Commodity Exchange on Monday in Dalian, Liaoning province.
“It is the first time for the DCE to introduce overseas traders in the full soybean commodities,” said Fang Xinghai, vice chairman of China Securities Regulatory Commission, in a video message. FULL STORY

China’s largest soybean-producing province sets new records

Source: Xinhua
Heilongjiang, China’s largest soybean-producing province, set new records in 2022 in terms of soybean output and planting area, statistics from the National Bureau of Statistics show.
Heilongjiang yielded 9.54 billion kilograms of soybeans this year, up 32.6 percent year on year and accounting for 47 percent of the country’s total soybean output. The sown soybean area in the province hit 73.98 million mu (4.93 million hectares), up 26.9 percent year on year. FULL STORY

China starts importing soybean meal from Ethiopia

Source: AgFlow
According to China Customs data, China’s Soybean imports in September 2022 were 7.7 million tons, a year-on-year increase of 12.2%, and the import value was US$5.5 billion, a year-on-year increase of 35%. From January to September 2022, China’s Soybean imports were 69 million tons, with an import value of 46.5 billion US dollars.
China imported 7.16 million tons of Soybeans in August, a month-on-month decrease of 718,000 tons, or 9%. From January to August 2022, the cumulative Soybean imports were 61.329 million tons, a year-on-year reduction of 5.786 million tons, or 8.6%. It was the lowest since August 2014, as high global prices and weak demand dampened demand for Soybeans. FULL STORY

The low rate of soybean imports to China is increasing the pressure on world prices

Source: UkrAgroConsult
According to the General Administration of Statistics of the People’s Republic of China, China imported 7.35 million tons of soybeans in November, which is 14% less than in November 2021. Of these, 3.38 million tons were imported from the United States, and only 2.54 million tons – from Brazil. which is 32.3% less than in November 2021.
In the period from January to November, compared to the same period last year, China reduced soybean imports from Brazil from 56.5 to 51.83 million tons, and from the United States – from 25.2 to 23.01 million tons, which increases the pressure on prices. FULL STORY

Soybeans set to gain for 4th year amid Argentina drought, China demand

Chicago soybeans rose on Friday, with the market poised to gain for a fourth straight year, lifted by a drought in key supplier Argentina and expectations of strong demand from China.
Wheat futures edged higher, putting the market on track to finish 2022 largely unchanged, having jumped to an all-time high in March after Russia’s invasion of Ukraine curbed global supplies. FULL STORY

Boost expected for Brazilian soybean exports as Chinese imports recover

Source: the macao news
Brazil exported 52 million tonnes of soybeans worth US$31 billion to China through November, compared to 68 million tonnes and US$27 billion in 2018.
China is expected to end the year with historically low soymeal carryover stocks, which should increase dependence on imported soybeans in 2023, chiefly from Brazil. FULL STORY

Grains-soybeans up for 3rd session on Argentina dryness, China demand

Source: Successful Farming
Chicago soybean futures rose on December 21st, gaining for a third consecutive session, as a lack of rains in key supplier Argentina and dismantling of COVID-19 restrictions in China underpinned the market.
Wheat ticked lower, although losses were limited as extremely cold weather across the U.S. Plains raised concerns over weather damage to the winter crop. FULL STORY

Subsidy success: multi-billion cash handout to farmers helps China achieve bumper soy and grain outputs

Source: Feed
China’s decision to provide additional subsidies to soybean and grain producers appears to have reaped rewards, with the state officials claiming the former increased by 27% and the latter hitting record levels.
Latest figures released by the National Bureau of Statistics of China(NBS) show that China’s total grain output amounted to 686.53million tonnes in 2022 an increase of 3.68 million tonnes (0.5%) from last year. FULL STORY


China’s major shale gas field sees accumulated output of over 53b cubic meters

As of the end of November, Fuling, China’s largest shale gas field, has produced over 53 billion cubic meters of shale gas over the past decade since it was discovered in 2012.
Shale gas is mainly methane. It is considered a clean new energy resource. Over the past 10 years, the gas field has posted proven reserves of 897.5 billion cubic meters in total, accounting for 34 percent of China’s proven shale gas reserves. Fuling also has seen its annual output grow from 142 million cubic meters in 2013 to more than 8.5 billion cubic meters in 2021. FULL STORY

Xi says China ready to improve cooperation with Qatar in energy, finance, investment

China is ready to expand cooperation with Qatar in traditional energy such as natural gas and renewable energy such as photovoltaic and wind energy, and raise the level of bilateral cooperation in finance and investment, Chinese President Xi Jinping said here Friday when meeting with Qatari Emir Sheikh Tamim bin Hamad Al Thani.
Underscoring China’s support for Qatar in advancing the Qatar National Vision 2030, Xi said his country welcomes more investment from Qatar to China and is ready to actively promote personnel exchanges between both sides. FULL STORY

Shanghai set to get gas from Russia

With the commissioning of the Tai’an-Taixing section, the eastern route of the China-Russia natural gas pipeline completed construction on Wednesday, which will allow natural gas from Russia to cross nine provinces, municipalities and autonomous regions to reach Shanghai, ensuring energy supplies for China’s eastern regions.
Experts said the project’s completion marks a new milestone in China-Russia energy cooperation, and the two countries will forge an even closer partnership to ensure energy security. FULL STORY

China becomes top global LNG importer

Source: RT News
China’s imports of liquefied natural gas (LNG) increased in November versus January, according to Chinese customs data reported on Sunday, thus propelling the country past Japan to become the globe’s leading importer of the fuel.
The volume of LNG supplied to China totaled 6.42 million tons in November, although this is below the 6.9 million tons it imported last year. Japan, meanwhile, saw inbound shipments of 5.09 million tons in the same month of this year. FULL STORY

Oil prices shed gains as China covid cases soar

Source: Oil Price
After Tuesday’s gains on demand optimism over Beijing’s easing of COVID travel restrictions, oil prices reversed course early on Wednesday, edging lower on fears that surging virus cases would hinder a demand uptick.
Earlier this week, Beijing said it would ease travel restrictions for visitors to China, ending quarantine and testing requirements and opening its borders, allowing international travel to resume beginning on January 8. The announcement has sparked a run on bookings for overseas travel, according to the BBC. FULL STORY

Chinese refiners are profiting from the Russian oil price cap

Source: Oil Price
Independent Chinese refiners have seen their refining margins jump in recent weeks as they are able to negotiate steeper discounts for their preferred Russian crude grade, even if they buy it above the G7 price cap, trading and industry sources told Reuters on Tuesday.
The flow of cheaper Russian crude to China lifted the refining margins of the independent refiners, the so-called teapots, to above $115 (800 Chinese yuan) per ton last week, from less than $86 (600 yuan) at the beginning of December, according to a China-based oil analyst who spoke to Reuters. FULL STORY

Oil down as rise in China COVID cases weaken demand outlook

Source: Kazinform
Oil prices fell on Thursday as rising COVID-19 cases in China, the world’s largest crude importer, diminished hopes of a recovery in oil demand, Anadolu Agency reports.
International benchmark Brent crude traded at $83.14 per barrel at 10.18 a.m. local time (0718GMT), down 1.01% from the closing price of $83.99 a barrel in the previous trading session. FULL STORY

Oil prices rise on China plans to reopen borders, Russia ban

Source: Barron’s
Oil prices were rising Tuesday after China said it would reopen its borders in January, bolstering prospects of a demand recovery in 2023. In addition, The Wall Street Journal reported Russia was banning the supply of Russian oil and oil products to countries that impose price cap.
Brent crude, the international standard, was up 1.3% at $86.65 a barrel. West Texas Intermediate, the U.S. standard, was up 1.3% at $80.62 a barrel. FULL STORY

China could export record-high fuel volumes this month

Source: Oil Price
Looking to take advantage of export demand and refining margins to offset weak domestic consumption, Chinese refiners could export a record-high volume of transportation fuels this month as they also seek to use up the export quotas allocated by the government.
Chinese exports of gasoline, diesel, and jet fuel could reach in December between 6.5 million tons to 7.1 million tons, according to oil research and consultancy firms and trading sources quoted by Reuters on Friday. FULL STORY

China’s imports of Russian energy have surged by $27 Billion since invasion

Source: Oil Price
China’s imports of oil, pipeline gas, LNG, and coal from Russia have hit a total of $68 billion since the Russian invasion of Ukraine, up from $41 billion for the same period last year, as Western buyers shun or have banned imports of many Russian energy products, according to data compiled by Bloomberg.
China’s imports of LNG from Russia surged to a record in November although overall Chinese LNG purchases were down by 5.4% year over year, per Chinese customs data cited by Bloomberg. FULL STORY