Despite an escalating global trade war, dry bulk shipping rates are recovering. However, commodity traders remain dubious that the Chinese economy will be negatively impacted or that there will be a significant reduction in stockpiles.
It is suggested that there are two reasons why business should continue as normal. Firstly, the Chinese economy is proving to be fairly resilient, and secondly, dry bulk trade between the US and China is relatively inconsequential in the bigger scheme of things.
According to the Bloomberg report, in 2017, the largest agribulk commerce between the US and China was soya, which amounted to 32.9 million tonnes. Compare this will overall global dry bulk trade, which is around 5.2 billion tonnes. Tariffs charged by the smallest agribulk carriers have therefore not been impacted at all by the dispute.
China has also invested heavily in domestic infrastructure projects to counterbalance any potential loss of trade with the US.
Correspondent: Barry Cross