Bulkers: China’s weak demand

One reason for this is weak global demand for commodities, many of which are
transported by ship, especially bulk cargo such as coal, ore and grain. Global
demand for steam coal fell by 6% in 2015 – its first decline this century.

Low demand paired with high supply has also led to a constant drop in the price of
coal in recent years. China is the world’s leading importer of many bulk shipping
goods as well as the number-one market in terms of total demand. In 2014,
China accounted for 65% of global iron ore imports, for example. Although that
figure was “only” 11% when it comes to coal (2015), China is still the largest
importer of coal in absolute terms. Slower economic growth in China and its
stronger focus on domestic consumption (instead of exports and investments in
factories, infrastructure, residential construction, etc.) is having an impact on the
country’s trade balance. As a result, China imported over 27% less coal in terms
of volume in 2015, according to the National Bureau of Statistics of the People’s
Republic of China. Chinese imports of iron ore grew by only slightly over 3% last
year – the slowest pace since 2010, when Chinese imports of iron ore fell by
1.5%.

In terms of monetary value, Chinese imports of coal and iron ore have
each decreased due to the lower prices for both commodities.