Freight players are watching for further signs that China's economy is overheating, which could lead to a pullback in iron ore imports and shipping activity. There has been speculation that China could raise interest rates.
"China will continue to grow significantly and has surpassed our economists' expectations as an economy," Michael Parker, global head of shipping, logistics and offshore industries at Citi , told Reuters.
"But they want to get inflation under control. That is bound to, therefore, have an impact on imports of commodities, particularly the dry business."
Parker said oversupply represented the other challenge for the dry bulk sector.
"The order book represents 50 percent of the total supply," he said in an interview on the sidelines of an Informa shipping conference.
China's key stock index fell by 4 percent on Tuesday as retail investors were spooked by rumours of more aggressive action to control inflation.
"I'm not an economist, but from an industry point of view China can't afford for inflation to get out of control, and they certainly don't want the banking system to get out of control, and so that dampening down of 'speculative hot money' -- draining liquidity out of the system -- is something they want to do in order to just calm things down," Parker said. (Reuters)
