According to Refinitiv data, China's imports of crude oil and iron ore are at levels well below the preceding months for February and also from the same month last year. Specifically, the numbers show that the rate of cargo discharge is slower than usual, while vessels queuing outside Chinese ports waiting to offload their cargo have formed a longer queue than usual.
Therefore, it is obvious that the Chinese ports are struggling to get back to their normal volumes of cargo movements.
Moreover, the virus has already caused economic disruptions given that many Chinese ports remained closed after the Lunar New Year holidays as Beijing worked to stop the spread of the disease.
Recently, BIMCO's Peter Sand commented that the global market is affected by the coronavirus outbreak, a sign that the whole world is dependent on Chinese production.
Reuters cited Refinitiv data according to which 28.2 million tonnes from 211 vessels was discharged in the first 12 days of February. This is decreased in comparison to the 33.4 million tonnes achieved in the same period in February 2019, and it’s also worth noting that the Lunar New Year holidays fell in February last year, which would have slowed unloading in that month.
Also, the daily rate of iron ore being offloaded up to now in February is 2.35 million tonnes, down from 2.93 million in January and 3.09 million in December.
66 vessels transmitting 10.3 million tonnes of iron ore are waiting to discharge, while 41 ships with 6.7 million tonnes are in the process of unloading their cargoes. Also, 192 vessels carrying 31.8 million tonnes are en route to China and expected to reach port by the end of the month.
The numbers above give the image that about 77.6 million tonnes of iron ore arriving in China in February, down from 90.9 million in January and 95.8 million in December.
It is highlighted that this months numbers will be revised and are likely to increase as more vessels are sighted; Yet, the overall outlook is that February will be a soft month.
Concerning crude oil, Refinitiv data showed 80 tankers carrying 90.7 million barrels have discharged cargoes in the first 12 days of February, a daily rate of 7.58 million barrels. This is a decrease from the 8.88 million barrels per day that were achieved in the first 12 days of the months, also less than the 9.67 million bpd in January and the 9.79 million bpd in December.
Yet, coal showed higher numbers. Specifically, during the first 12 days of February, 111 ships offloaded 6.8 million tonnes of coal, for a daily rate of 566,000 tonnes. This is higher than the 517,000 tonnes per day recorded in the first 12 days of February 2019, but still well below the 803,000 tonnes per day in January and the 658,000 tonnes in December.
In addition, the data shows that there are 47 vessels awaiting to discharge coal, and a further 90 en route and expected to reach China before the end of the month.
Overall, it appears that China’s imports of major commodities may be constrained in February, but slower demand because of the coronavirus may not be the main reason, rather it’s the struggle to get ports working at full capacity once again.