We remain very bullish regarding near-term prospects for Chinese growth and steel production.  The Chinese economy continues to expand at a robust pace.

 

Chinese iron ore fixture volume has been low, however, during the last two weeks.  Less than 15 Chinese iron ore fixtures have now come to the market during each of the last two weeks.  “Good” weeks are those that see at least 20 fixtures come to the market.  Chinese steel prices have also decreased by a small amount during the last three weeks, but we are not very concerned.

 

It is normal for chartering activity and commodity price increases to “take a breath” at the times.  We would be more troubled over these recent developments if Chinese steel stockpiles were increasing.  Steel stockpiles in China have now decreased for nine consecutive weeks however.  This is a very good sign and shows that steel demand remains very strong in China.

 

Overall, we believe this rough patch will pass soon.  We expect Chinese iron ore fixture volumes and steel prices will start to find support within one to two weeks.  We continue to expect the Chinese economy to expand at a robust pace.