Impact on international market

In this period, the Baltic composite freight index (BDI) fell 62 points, or 9.83%, of which the Cape index (BCI) rose 205 points, or 65.92%, and the Panama index fell 292 points, or 29.00%.

For Capesize vessels, the market is still very challenging, and the major bulk trading is limited by current and expected virus related restrictions, so it is unable to recover immediately. India, South Africa and other relevant regions have completely or partially closed their port operations, adding to the negative sentiment in the market. The freight rate of tubalang / China has dropped to below US $10 / T to US $9.48/t. With the help of lower fuel prices, average daily revenue increased slightly to $4000 a day, but still far below operating costs.

With the closure of ports in India and coal mines in South Africa and the United States, Panamax shipowners are difficult to maintain in most areas.

One week's negative emotions caused a sharp drop in super handy freight. Especially in the case of coronavirus spread, it has a negative impact on the spot and forward freight. The US Bay market is also under pressure due to increased capacity and lack of fresh goods.

Port blockade and domestic inventory decline

With the domestic epidemic situation under control, the new coronavirus has shown an explosive growth trend in the international market. In order to cope with the severe epidemic situation, countries have successively introduced the measures of "closing the country and locking the city".

Among the iron ore shipping countries, South Africa and India responded to the measures taken by the head of state for the prevention and control of the epidemic, and several transport ports announced the shutdown, which raised the market's concern about the supply side, including Saldanha port, the largest iron ore shipping port in South Africa, and four large ports in India. The blockade time was 21 days. In addition to affecting the shipment, due to the accumulation of inventory, if the future transport capacity is further limited, the inventory will expand, and then take the initiative to reduce production.

In Australia, from March 23 to March 29, there will be three shipping berths in Australia's iron ore shipping port for maintenance, corresponding to Rio Tinto and BHP berths respectively, and the closing time will last until April 1.

Brazil, another big iron ore giant, has seen a sharp decline in its iron ore volume since the beginning of the year due to continuous rainfall, port maintenance and other factors. Although it has recovered from a historical low recently, it has not yet returned to normal. According to Mysteel data, from the beginning of the year to March 13, Brazil's global shipment volume fell by 20.29 million tons, or 30%. In addition, affected by the epidemic, Vale, a Brazilian miner, temporarily shut down the operation of its Malaysian logistics center until March 31. The terminal is expected to reduce the sales of about 500000 tons of iron ore in the first quarter.

With the improvement of the domestic epidemic situation, more steel mills resume production, the demand for iron ore spot is increasing, and the port dredging volume remains high. However, the shipping of overseas mines is not smooth, resulting in the further decline of domestic iron ore port inventory. As of March 26, 2020, the domestic iron ore port inventory is 116.96 million tons, the lowest since the same period of 2017.

At present, the epidemic is spreading rapidly overseas. In the near future, the international trade environment and related policy restrictions are still highly uncertain, and the prospect of international trade is overcast.