According to data from the General Administration of Customs in March, China's import of major commodities like grain and metals saw a substantial rise. Average daily freight rates charged by the ships, which are the largest kind of dry cargo ships, reached almost £33,000 in April’s last week.
The Baltic Dry Index (BDI) is another indicator of the economic surge in dry-bulk shipping. The BDI is a trade and shipping index that measures the overall changes in the cost of transporting goods for Panamax and Supramax ships. At just over 3,000, it reached its highest number since 2010.
At BIMCO, maritime trading’s chief shipping analysts say that usually by March of each year, shipping demands drop by about 9% and that 2021’s buoyant vessel rates are indeed very much off-season.
Last year, due to the effects of the COVID-19 pandemic, China’s factory production fell apart as the industry saw a significant decline in imports.
On the Western side of economics, consumer demand is rapidly increasing by the day and China is rising to the opportunity by investing in factory production.
Comparing the imports between March 2020 and March 2021, crude oil and natural gas imports increased by more than 20% and 26%, respectively.
Iron ore and copper imports went up by 19% and 25%, respectively. Commenting on the increased copper imports, China’s copper analysts at CRU said that international demand has sharply turned to China for processing as the pandemic is still widespread in overseas industries.
Currently, almost 45% of the world’s dry-bulk cargo is imported by China. Similar industries that import dry bulk commodities are quickly growing.
Another factor contributing to the increased maritime imports is the restrictions set by the pandemic. Coal trucks, for example, are no longer allowed to cross the land border through Mongolia.
Similarly, the Beijing branch of the US Department of Agriculture estimates that China will import over 27 million tons of grains in 2021. Corn’s demand is high so far as the price of a bushel has risen to £5.4.
Importing large amounts of grain will allow China to recover from the loss of its pig farms caused by lethal swine fever.
Experts say that although the market rates are good, they are not spectacular. There are considerable amounts of vessels that can disrupt the growth of the current market.
Last year, for example, the global fleet grew 4% even though demands were almost minimal. Plus, daily freight rates are susceptible to sudden drastic changes, depending on numerous factors like crop and mining outputs and weather patterns.