Dry bulk shipping’s capesize sector continues to rise amid China’s ongoing building boom, despite government plans to lower steel output for carbon-reduction goals. The capesize 5TC, a weighted average of spot rates on five key routes, on Monday gained 1.9% to $17,054 per day, maintaining its steady climb from $11,679 per day on 1 March.

Freight-forward agreement (FFA) rates for the asset class also improved on Monday and continue to show a strong forward curve for 2021, according to the Baltic Exchange. FFA rates improved 6.9% to $17,750 per day for March and 5.2% to $22,650 per day for July while also showing a steady ascent for the next several months. On a quarterly basis, they are up 9.7% to $22,197 per day for the second quarter and up 7.5% to $21,603 per day for the last three months of this year.

These market improvements come at a time when China’s iron-ore imports and production of steel keep growing with no signs of slowing down. China briefly closed some mills to lower air pollution in Tangshan, but January-February steel output grew 12.9% year-over-year to 175 MMT, according to the National Bureau of Statistics. Meanwhile, infrastructure investment jumped 36.6% alongside a 38.3% upswing in the real estate market over the same time frame.

Manufacturing also shot up through February by 37.3% following the lift of Covid-19 restrictions, NBS data showed. “Easing of travel and virus-related restrictions in China should help support economic growth in the near term,” Clarksons Platou Securities said in its daily capesize report.

“And with fiscal stimulus in other countries around the world, we expect dry bulk demand to remain well supported.”