The cumulative volume of China's steel exports in the first four months of the year reached the highest level for the same period since 2016. This follows a strong performance in the January-March period, during which total exports hit an eight-year high.
Following a period marked by numerous public holidays, Baltic indices commenced the current trading week with a quest for direction. There prevailed a pervasive sentiment in the spot market that the softer tone observed in the previous period was merely an anomaly, and optimism for brighter days ahead was imminent. This sentiment was bolstered by a decidedly positive start for Capesizes, as evidenced by the Baltic Exchange's inaugural index for the week, which showed gains by midday on Tuesday. With impressive daily gains of $4,698, the leading segment of the dry bulk sector concluded the day at $26,864 daily.
As Capesizes continued their upward trajectory, China's trade data provided a boost to the initial optimism. China’s customs agency released data on Thursday indicating that exports in April met expectations, while imports exceeded forecasts. Notably, both exports and imports in China returned to growth in April after a contraction in the previous month, signaling an improved trading environment in the domestic and international markets. According to customs data released on Thursday, shipments from China increased by 1.5 percent year-on-year last month in value, in line with economists' expectations surveyed by Reuters. This contrasts with the 7.5 percent decline recorded in March, marking the first contraction since November. Reversing the 1.9 percent decline seen in March, imports for April rose by 8.4 percent, surpassing the expected 4.8 percent increase.
The United States continues to hold its position as China’s largest trading partner on a single-country basis, while the Association of Southeast Asian Nations (ASEAN) remains China’s largest trading partner on a regional level. In April, China saw a 9 percent increase in imports from the US compared to the previous year, while exports to the US experienced a modest decline of nearly 3 percent. Notably, China witnessed a rise in exports of cars, LCD panel displays, and home appliances by volume, while exports of cellphones saw a slight decrease. However, exports of ships declined during this period. On the import side, China observed growth in imports of crude oil, natural gas, steel, plastics, and medicines. Conversely, imports of cosmetics experienced a drop.
In the realm of dry bulk commodities, the latest data from Chinese customs underscores a notable surge in iron ore clearances during April, totaling a substantial 101.8 million tonnes. This figure represents a noteworthy uptick of 12.8 percent compared to the same period the previous year. Importantly, Chinese imports of iron ore for the JanuaryApril period of this year reached 411.8 million tonnes, marking a significant increase of 27.7 million tonnes, or 7.2 percent, compared to the corresponding period last year. These insights, gleaned from the latest statistics released by the country's General Administration of Customs on May 9, accentuate the sustained demand for iron ore within the Chinese market. Despite this robust import activity, the landscape of the steel market in China exhibited only marginal improvements last month. This observation is intriguing, especially considering that April typically witnesses heightened steel consumption with the advent of spring. As a result, the inventories of imported iron ore at Chinese ports steadily increased last month, reaching a significant milestone. The total volume of imported ore stocks across the 45 major domestic ports monitored by Mysteel stood at a two-year high of 148 million tonnes by the end of April, marking a 2.3 percent increase compared to the previous month.
In terms of the other two major commodities within the dry bulk spectrum, China's coal imports experienced a notable increase in April, driven by factors such as reduced domestic production and heightened purchases by power generators aiming to bolster stockpiles ahead of the peak summer demand period. Specifically, imports of coal and lignite reached 45.25 million tonnes in April, marking a substantial 9.4 percent increase from March and a more significant 11.2 percent rise compared to the same month last year. This data, published by the country's General Administration of Customs on May 9, underscores the robust demand for coal in China. For the period spanning January to April, China's total coal imports amounted to 161.15 million tonnes, reflecting a noteworthy 13.1 percent surge compared to the corresponding months last year, as per the latest data from the GACC. Meanwhile, China's domestic output of raw coal across all uses experienced a 4.2 percent year-on-year decline in March, with total output for the first quarter reaching circa 1.11 billion tonnes, down by 4.1 percent compared to the same period last year. In another sphere, China's soybean imports surged in April by 18 percent compared to the previous year, driven by increased purchases of competitively priced Brazilian beans. Total soybean arrivals for the month reached 8.57 million metric tonnes, marking a record high for April, according to data from the General Administration of Customs. However, soybean imports into China during the January-April period totaled 27.15 million tonnes, representing a modest decline of 2.9 percent compared to the same period last year, according to the same source.
The most striking statistic, however, emerged from China's exporting activity rather than its importing endeavors. Specifically, China's steel exports surged by 16.3 percent in April compared to the previous year, reaching a volume of 9.22 million tonnes. These shipments in April contributed to a total of 35.02 million tonnes exported during the period from January to April, marking the highest figure for this period since 2016 and representing a remarkable 27 percent year-on-year increase.
Given the market dynamics outlined earlier, the Baltic Supramax index wrapped up the day at $16,333 daily, slightly below this year's highs. Both the Baltic Capesize and Panamax indices capped off the nineteenth trading week at one-and-a-half-month highs, achieving $18,230 and $16,333 respectively. Conversely, Baltic Handysize index was the only one in the red, balancing at $12,647 daily.
Data source: Doric