China drives respite for prices: Coronavirus impact on bulks week ended 15th May

Positive price moves were seen across the bulks sector this week as Chinese steel production, inventory trends and power demand signals set a constructive platform. An additional surge in coal demand is ongoing as fears of port restrictions in H2 2020 are signalling buyers to restock now. Meanwhile Brazil’s iron ore supply travails are the driving force behind extraordinary operating margins for suppliers in that sector. The price rises come as a welcome respite, but complacency is inadvisable. The emergence of EU, US and Indian economies is a slow process, and demand trajectories are highly uncertain. There is plenty of fragility to current pricing.