Dynamics in the dry bulk market. Economic activity, trade flows, and safety in shipping

Dynamics in iron ore markets are driven by changes in economic activities that affect commodity markets, trade flows, and shipping activity and safety. This article investigates the relation between these variables in Southeast Asia and the Australasian region. Steel production in China, Japan, and South Korea is related to iron ore exports and vessel activity in Australia, with an estimated time lag of about two months. The Purchasing Manager Index is found to have predictive power for steel production and iron ore exports. The growth in economic activity is associated with higher risks for ship accidents and pollution.