Shipping and steel in a dangerous deflationary dance

It is not often we cover the dry bulk shipping industry on The Loadstar, but what is going on in the iron ore trades, and the steel manufacturing industries they support, should concern anyone with the remotest interest in international trade. The Chinese buy iron ore to make steel; they then use that steel to build ships which are then sold to shipowners, who buy them to make money out of transporting more iron ore to Chinese steel mills, feeding an ever-decreasing circle of over-investment and mounting financial losses. Steel prices are collapsing; there is no need for more ships – but there’s no rationale for scrapping vessels because scrap has no value anymore… riddle us that, puzzle-solvers.