The most broad measure of money supply – M2 rose 19.7% YoY in December vs. 19.0% consensus and 19.5% rise in November.
Chinese banks issued CNY 480.8 billion of new loans in December vs. CNY 564.0 billion in November and consensus of CNY 360.0 billion. Total new loans for 2010 reached CNY 7.9 trillion vs. CNY 7.5 trillion annual target.
New loan issuance slowed down in December because banks tried to obey annual targets; Monetary expansion continues.

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Baltic dry index fell 14.3% in the last two weeks; Capesize Index was down 20.5%; Panamax Index rose 4.9%; Supramax Index was down 10.2%; Handysize Index fell 7.1%.

Iron stockpiles & steel inventory mostly unchanged; Iron ore and steel prices stable. Today’s China trade balance data was weak and I would be careful until we find out whether is it government orchestrated year end slowdown or a genuine one.

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China trade balance was reported at USD 13.1 billion vs. USD 22.9 billion in November and USD 20.8 billion consensus. Export and import growth were running at 17.9 and 25.6 percent vs. 34.9% and 37.7% in November.

Total accumulated surplus for 2010 was USD 185.6 billion vs. USD 198.2 in full year 2009.

Sharp decline in trade balance surplus and both export and import growth confirm what I already anticipated on freight rates. What is even worse there’s no recovery in freight rates in January (jet).

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Baltic Dry Index fell 4.3% today while Queensland floods worsened.

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No secret I’m a big fan of Niall Ferguson. This is a great lecture on empire declines.

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Baltic exchange released it’s first pricing after Christmas. Baltic Dry Index was reported down 4.5% at 1,693. Lowest reading since April 2009.

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China Federation of Logistics & Purchasing and National Bureau of Statistics PMI (“official PMI”) fell from 55.2 to 53.9.

PMI’s for December suggest industrial production growth in December will remain stable.

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HSBC/Markit China PMI fell from 55.3 to 54.4.

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Baltic dry index fell 11.3% last week; Capesize Index was down 13.8%; Panamax Index fell 9.4%; Supramax Index was down 7.4%; Handysize Index fell 1.2%.

I’m getting a little bit worried but to repeat last week’s comment: Iron stockpiles & steel inventory mostly unchanged; Iron ore and steel prices stable. No indication of any major disruptions in Chinese economy. Low rates are probably byproduct of excess supply of ships and seasonal factors (weaker construction steel demand in China during winter months).

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POBC raised key one-year lending rate for 0.25% to 5.81%. This was widely expected; I have wrote on this earlier and almost certain there is more of this to come.

Raising interest rates and stalling real-estate prices are a bad cocktail. I will cover China even more extensively next year, as big things could come from here.

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Baltic dry index fell 4.6% last week; Capesize Index was up 1.1%; Panamax Index fell 13.6%; Supramax Index was down 3.4%; Handysize Index rose 1.1%.

Iron stockpiles & steel inventory mostly unchanged; Iron ore and steel prices stable. No indication of any major disruptions in Chinese economy. Low rates are probably byproduct of excess supply of ships and seasonal factors (weaker construction steel demand in China during winter months).

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Baltic dry index fell 3.4% last week; Capesize Index was down 9.7%; Panamax Index fell 1.1%; Supramax Index rose 4.8%; Handysize Index was up 1.7%.

Iron stockpiles ticked up a bit; Steel inventory falling.

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** China NDRC Property Price Index ** China Trade Balance; Export & Import Growth ** China Monetary Aggregates ** China New Loan Issuance ** Consumer & Producer Price Indexes ** China Retail Sales Growth ** China Fixed Assets Investment **

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Baltic dry index fell 0.1% last week; Capesize Index was down 7.7%; Panamax Index rose 2.2%; Supramax Index rose 7.2%; Handysize Index was up 3.6%.

Stockpiles of iron ore and steel are falling, so we have no prof of falling demand in China (jet). I still expect Chinese buyers returning to the market and propping rates.

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Baltic Dirty Tanker Index rose 14.2%; Baltic Clean Tanker Index rose 8.9%.

I would speculate that China resumed its imports pace and propped rates.

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