THE ongoing trade war between the US and various other economies has finally come home to roost in the commodities industry with analysts saying the slide in shipping rates was related to waning growth in Chinese demand.
China buys more than a billion tons of iron ore and coal annually. While imports expanded 1.8% this year, growth in 2017 was 5.5%. At the same time, the government may restrict imports of coal used in power plants as it seeks to curb pollution. The nation is also buying fewer US agricultural products, hurting smaller ships, said Bloomberg News.
The Baltic Dry Index is within a whisker of crashing through 1,000 points for the first time since April which is a leading indicator of slowing demand for commodities.
“Expect a fragile recovery going into 2019,” Peter Sand, chief shipping analyst at BIMCO, a 113-year-old shipping association representing vessel owners and operators, told Bloomberg News. “At best, sideways rates improvement is seen,” he said.
