China’s real estate sector continues to face difficulties, significantly affecting demand for dry bulk materials like steel and iron ore.

Recently, Hong Kong’s High Court ordered the liquidation of state-run developer China South City Holdings, which owes nearly $8 billion. This represents the largest Chinese builder by assets to be dissolved since the China Evergrande Group crisis.

Data from July indicates a 24% drop in new home sales for the top 100 Chinese property companies compared to last year. According to a report from BIMCO, new real estate starts in China have decreased for five consecutive years. The first half of 2025 alone saw a 20.1% decline, leading to diminished construction activities and reduced demand for raw materials in the dry bulk sector.

Maritime insights from Signal reveal that China’s property sector constitutes approximately 35–40% of the nation’s domestic steel and iron ore demand. In the first quarter of 2025, the sector experienced a 24% reduction in new residential construction starts year-on-year, with property investment falling by about 16.5%.

Despite government incentives, including a ¥4 trillion ($27 billion) loan facility and tax incentives, market interest remains low. A surplus of unsold homes and ongoing developer bankruptcies continue to hamper construction activity and raw material consumption, according to Signal’s latest market update.