Despite falling domestic production, the mainland's iron ore imports are up 10 per cent year on year, according to a leading ship broker.
Warren Brook, managing director of Simpson, Spence & Young Shipbrokers, said even though the mainland sourced inferior quality iron ore domestically, it preferred to import better quality iron ore to manufacture steel.
This comes as mainland steel output in January dropped to 10.03 million tonnes from 11.23 million tonnes in December, the China Daily Business Weekly reported, quoting State Administration of Metallurgical Industry sources.
The mainland plans to cut steel output by 10 per cent this year to reduce the surplus and also help raise prices and profits in the sector.
Mr Brook said there was strong demand for steam coal, mainly from South Korea and Japan.
Beijing's World Trade Organisation entry may also raise demand for grain, although it may not happen immediately, Mr Brook said.
Strong commodities demand had triggered demand for ships, pushing up freight rates since the middle of last year, he said.
For example, the average earnings of capesize vessels, which was at a low of US$7,000 a day in July had now improved to $16,000 to $18,000 per day.
Mr Brook said he could not say whether the demand for commodities would continue as the fleet size of panamax (65,000 to 73,000 deadweight tonnes), handymax (40,000 dwt to 50,000 dwt) and capesize vessels (150,000 dwt to 180,000 dwt) were also growing quickly.
Mr Brook added he was optimistic of short-term demand for commodities in the next three to six months, but could not say what the level of demand would be later in the year.