China Shipping Report Q4 2013 - New Study Released

From: Fast Market Research, Inc.
Published: Thu Oct 03 2013

BMI maintains its cautious outlook for the Chinese port and shipping sector, highlighting that indicators continue to align to back our view of a slowdown in China's economic growth. We maintain our 7.5% projection for real GDP growth for 2013, and caution downside risks to our forecast are certainly mounting. We expect the economy to expand by 6.7% in 2014.

After a decade-long cycle of high commodities prices partly boosted by stellar demand growth in China, the ongoing slowdown of the country's economy and rebalancing away from metal-intensive manufacturing and construction sectors raises questions over the future of China's commodities demand and import needs, with a possible negative knock on effect on dry bulk imports in particular.

Headline Industry Data

* 2013 Port of Shanghai tonnage throughput forecast to grow 2.4%, with container growth of 3.2% forecast for the year.
* 2013 Port of Shenzhen container throughput forecast to grow 2.0%, with average growth of 2.4% during our forecast period.
* 2013 real trade growth forecast at 4.9%, a considerable slowdown from 2011's estimated 9.4%, but an uptick from 2012's estimated 2.5%.

Full Report Details at

Key Industry Trends

Shenzhen Set To Overtake Hong Kong

A relatively strong start to 2013 has led BMI to revise up its container throughput forecast for China's second largest box port the port of Shenzhen. This strong start has been achieved despite a weakening in the global outlook, which Shenzhen, as China's second largest export hub for containers, is exposed to. The impact of the Pearl River Delta curse also appears to be subsiding, as the port aims to keep pace with the trend of manufacturing moving inland by offering rail connections.

Chinese Container Throughput at Main Ports Up 10% in June

China posted a year-on-year increase of 10% in its port container volume in June, though no detailed figures were given. In the same month, average daily throughput grew 2% compared to May.

Cosco Reports H1 2013 Loss

Chinese ocean freight service provider Cosco Shipping has reported its H113 financial results. The company saw net losses mount to US$12.7mn, a 300% increase y-o-y. The company's loss has been attributed to a broader market slowdown, with both imports and exports falling in June 2013. Cosco warned in April 2013 that it was likely to report a loss for the first half of the year.

Key Risks To Outlook

The risks presented to our China shipping forecasts are primarily to the downside, with a sharper-thanexpected fall in the country's already-declining international trade volumes representing the most immediate threat. In particular, we believe monetary tightening could cause the country's need for materials such as iron ore to ease, leading to a decrease in the import of such commodities.

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