China’s stature as an international powerhouse can be felt in economic markets across the globe. China’s domestic growth and increasing consumption is driving commodity prices, shipping costs, mining activity, steel consumption, and energy resource development. Most influenced are dry bulk shipping prices, especially iron ore and coal, central to China’s steel production.

Mid-December market analyses of several sectors show the degree of China’s influence. Prices for iron ore entering China, for instance, were holding steady at $140 per ton, exceeding even the expectations of the world’s leading mining companies who with each passing year are exporting more of their raw materials to China: Vale, Rio and BHP. The high prices were felt across China’s mining industry, some more deeply than others as they faced production costs of as much as $170 per ton. Over the first 11 months of 2013, China’s cumulative iron ore imports increased by 11%. September and November were record months, with 74.6 metric tons and 77.8 metric tons respectively, a significant jump from October’s total imports of 67.8 metric tons. Forecasters expect that a total of 801 metric tons will have reached China’s ports by the end of 2013, representing 67% of the 1,197 metric tons forecasted to reach ports in the rest of the world. China’s population growth combined with a healthy economy and busy construction industry are pushing up her per capital consumption of steel. As a consequence, the BCI 4TC index rose from a daily average of $6,136 in the first half of 2013 to $22,016 in the second half (as of 13 December). Continue reading →