b'MAY 10 - 23, 2021BREAKBULK QUARTERLY 17(CYCLEcontinued from page 13)economic stimulus has not only lifted the freight rates for capesize ships. In fact, you currently see earnings across all dry bulk sectors that have not been seen stronger since 2010.Chinasearlyrecoveryfromthe pandemichasfueledtheseemingly insatiable need for the primary com-modities necessary to power the eco-nomic reboot. Andofthosebulkcommodi-tiesunderpinningChinasdemand, ironandsteelproducingcommodi-tiesaretheonespushingtheBDI. Chinas dominance of the commodity sector is worth noting: In 2020 China accounted for over 72% of the worlds iron ore imports.Breakwave Advisors, [which pub-lishes a bi-weekly report] in their April 27th edition of Dry Bulk Fundamen-talsoutlinedanumberofdriving forces behind the rise of the BDI. Forexample,Chinassteelpro-ductionyear-to-dateof271million tonsisup15.6%whilesteelinven-tories are down -20.3%. Chinas iron ore of 284 million tons YTD is up 8%In the fourth quarter of 2020, US coal exports to China soared to 1 million tons, over 250% increase on a quarter-to-quarter basis.while coal imports are 68 million tons down, almost 29%.And it appears Chinas steel pro-duction is just heating up. According to the China Iron and Steel Associa-tion (CISA), daily crude steel output frommembermillsaveraged2.32 milliontonsduring April11-20,up from2.27milliontonsinaten-day period to post an all-time high. These increases were even more significant given Beijing had mandated produc-tion cuts in steel producing plants in thesteel-makingcitiesofTangshan and Handan in the province of Hebei.However,Chinaspolitburohas emphasizeddomesticdevelopment andsoughttotapdownsteeland steel related exports. A strong indica-tor was the recent announcement the PRC(PeoplesRepublicofChina) willremoveexporttaxrebatesfor 146 steel products on May 1stthe moveadministrativelysqueezesthe recent export surge of steel and steel relatedproducts.Andatthesame time,inkeepingwiththedesireto boostdomesticgrowth,Beijingcut the import duties on pig iron, crude steel and ferrous scrap to zero. Nevertheless, while Chinas cen-trallyplannedeconomicstructure allowsBeijingsignificantcontrol over economic policy, provincial dic-tatesoftenruncounterespecially when it comes to exporting.i mpActs ofs ino -A ustRAliAnR iffHowever,thestrainedrelations betweenChinaandAustraliaare reshaping trade partners and patterns foranumberofbulkandneo-bulk commodities. Australiahaslongbeenakey source of raw materials for Chinese producers, ranging from metallic ores to grains, beef and even hay. In turn, China has made large investments in developing key resources in Australia in extraction and energy sectors.Whilerelationswerealready rocky,in Aprillastyeartheynose-dived when Australian Foreign Min-ister Marise Payne called for a global inquiry into the origins of COVID-19. Asrelationsdeteriorated,Beijing begananinformaltradewarbypres-suring Chinese traders to halt imports of Australiancoal,copper,timber,sugar, cotton,hay,wineandevenlobsters (CYCLEcontinued on page 19)'