Iron ore has had a rough week as containment measurements and a worsening property situation in China is weighing on sentiment and expectations of a delayed recovery in demand. The fourth largest property developer in China, Sunac China Holdings, missed a USD 742m bond payment during the week, adding to the list of issues in the domestic property sector. In addition, the company said on Thursday that it does not expect to make payments on other bonds coming due either. Nevertheless, demand is still expected to rebound in the medium-term as the Covid-19 outbreaks ease and the government implements policies to support growth.

Year to date, Chinese dry bulk imports are down 9%, but supply issues in both Brazil and Australia are likely equally important as weakness in demand when explaining the drop.

Week-on-week, benchmark Capesize, Panamax and Supramax rates increased by 50%, 9% and 1% to averages of USD ~30.4k/d, USD ~28.2k/d and USD ~30.2k/d, respectively. The key driver for the surge in Capesize rates, is higher volumes out of Brazil, as the miners are coming out of the rainy season.