Commodities to improve in China as infrastructure investment picks up pace

China's demand for commodity shipments is expected to improve in the fourth quarter as investments in infrastructure projects and steel production pick up pace, while Beijing ramps up oil products exports, senior shipping executives said.

The world's top commodities buyer reduced energy and metals imports in the first half of the year, as COVID 19 restrictions ravaged its economy, although Beijing has pledged to support growth through a series of measures.

Berge Bulk's chief executive officer James Marshall told Singapore International Bunkering Conference and Exhibition SIBCON 2022 that China's steel production has shown signs of improvement, while the outlook for commodities demand was supported by the prospect of easing COVID 19 lockdowns.

Marshall said we are quite confident in Q 4 in terms of dry bulk rates and volumes going into China in particular.

Marshall, who operates one of the world's leading independent dry bulk fleet, said that China's steel production had recovered from a low point in June, which is an optimistic indicator for the dry bulk sector.

He said that the easing of the Pandemic lockdowns in China could boost economic activity and lift infrastructure spending.

Jacob Meldgaard, chief executive officer at global refined oil products carrier TORM, is optimistic about robust orders for ships in China's shipbuilding industry over the next year.

According to Meldgaard, the growth in orders is expected to support demand for commodities such as iron ore.

The decision to allow refiners to export refined oil products will lead to a surge in demand for oil products tankers.

China could play a significant role in the world's refinery system to supply missing barrels into Europe, Meldgaard said.

The European Union is expected to ban Russian crude and oil products in December and February, as part of sanctions on Russia for the Ukraine invasion, a move that will tighten global oil markets.