As the star performer of the twenty-eighth trading week, the Baltic Panamax index posted an impressive 8.6 percent weekly gain, reaching $15,106 per day. After hitting five-month lows on Monday, the Panamax sector rebounded strongly, trending decisively upward for the remainder of the week. Similarly, the Baltic Supramax index climbed to $15,004 per day by Friday's close, having balanced at onemonth lows earlier in the week. In contrast, the Capesize market experienced a turbulent week. The leading BCI TCA closed today at $27,338 per day, down $354 from last Friday. Despite a weak start, the largest bulkers regained some ground, keeping the spot market above the $25,000 mark for the seventeenth consecutive trading day. Meanwhile, the stable Handysize segment moved sideways over the past five trading days, balancing at $13,339 per day.
On the global trade scene, China’s export performance last month was notably strong, achieving the fastest growth rate in over a year. This positive trend in exports stood out amid rising geopolitical tensions with Europe and the US. According to the National Bureau of Statistics, exports increased by 8.6 percent year-on-year in dollar terms in June, up from a 7.6 percent rise in May, marking the most significant expansion since March 2023. This expansion surpassed analyst expectations. Conversely, imports declined by 2.3 percent year-on-year in June, a sharp contrast to the forecasted 2.8 percent growth and the 1.8 percent increase recorded in May. This divergence led to China achieving a trade surplus of $99.05 billion, which was well above the anticipated $85 billion and set a new monthly record. In response to weak domestic demand, Beijing's policymakers have increasingly relied on the export and manufacturing sectors to bolster the economy. This strategic focus has helped mitigate some of the internal economic challenges China is facing.
In the realm of commodity trading, China experienced mixed trends in June. Imports of soybeans, coal, and iron ore rose compared to the previous year, while those of crude oil, unwrought copper, and rare earths saw a decline, as per customs data released on Friday.
Focusing on iron ore, China's imports dropped by 4.3 percent in June from May levels. This decrease was largely due to reduced purchasing activity driven by high port inventories and anticipated seasonal demand declines. In terms of inventory, the total stock of imported iron ore at 45 major Chinese ports remained relatively stable at 149.9 million tonnes. This represents the highest inventory level since mid-April 2022, according to the latest Mysteel survey. In spite of that, the world's largest iron ore consumer imported 97.61 million metric tonnes in June, which fell short of analysts' expectations. Nonetheless, the first half of 2024 saw a 6.2 percent increase in iron ore imports year-over-year, reaching a total of 611.18 million tonnes.
China's coal imports surged by 12 percent in June compared to the previous year, driven by record-high temperatures that boosted electricity demand. According to recently released customs data, China brought in 44.6 million metric tonnes of coal in June, an increase from 43.82 million tonne in May. This rise was mainly fueled by severe heatwaves across northwest and east China, prompting widespread use of air conditioning. In addition to the spike in demand, reduced domestic coal production earlier in the year also played a role in the increased imports. From January to May, coal output in China fell by 3 percent year-on-year, totaling 1.86 billion tonnes. In spite of the promising outlook for hydro generators this year, coal imports rose to meet the shortfall. Data for the first half of 2024 showed a 12.5 percent year-on-year increase in total coal imports, reaching 250 million tonnes.
On the staple soybean trade, China's imports jumped 10.7 percent in June from the previous year as buyers capitalized on the lower prices of Brazilian beans before the North American export season kicks off in the fourth quarter. The world’s largest soybean importer brought in 11.11 million metric tonnes in June, an increase from 10 million tonnes a year earlier. This surge comes as Brazil's soybean export season nears its end, with the harvest season wrapping up. However, the production and shipment of soybeans in Brazil faced challenges in May due to excessive rainfall and heavy flooding. This adverse weather led to a 2.2 percent decline in shipments for the first half of the year. Looking ahead, China is poised to set record soybean import volumes in July. Expectations are driven by favorable prices and concerns over potential trade tensions if Donald Trump is re-elected as US president in November. Analysts and traders predict that July imports will reach between 12 million and 13 million tonnes, significantly surpassing the 9.73 million tonnes imported in the same month last year.
Amid a series of pivotal elections in Europe and the United States, China is preparing for a significant event that will shape its economic trajectory: the third plenum of the 20th Chinese Communist Party central committee. Economists and analysts emphasize that structural challenges require immediate attention, urging Beijing to act swiftly, as there is a widespread sentiment that the economy has yet to reach its lowest point. Despite these calls for action, Beijing has tempered expectations regarding substantial stimulus measures during this crucial economic policy meeting.
Data source: Doric