New Market Study Published: China Shipping Report Q3 2013

From: Fast Market Research, Inc.
Published: Wed Jun 26 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. The domestic economic slowdown is projected to specifically impact dry bulk imports, thereby leading to a slowdown in total tonnage growth at the nation's port. Container volumes, which last quarter looked likely to strengthen have been revised down, as the US' economic recovery plateaus and the eurozone looks set for another year of recession in 2013, the key demand markets for Chinese container export shipments.

Headline Industry Data

* 2013 Port of Shanghai tonnage throughput forecast to grow 4.2%, with container growth of 2.4% forecast for the year.
* 2013 Port of Shenzhen container throughput forecast to grow 2%.
* 2013 real trade growth forecast at 4.9%, a considerable slowdown from 2011's estimated 9.4%, but an uptick from 2012's estimated

Full Report Details at

Key Industry Trends

Rates Weaken After Chinese New Year; Stormy Waters Ahead

Storm clouds are building in the container freight rate sector, as rates drop. Freight rates in the sector started off strongly at the beginning of 2013, with a year-on-year (y-o-y) strengthening in growth. This changed dramatically after Chinese New Year, with rates weakening and freight rates now down in y-o-y terms.

Rising Chinese Investment In EAC Ports

China is strengthening its geopolitical position in the Indian Ocean through its involvement with a number of key port developments in East Africa. BMI believes the involvement will not only strengthen Chinese trade with the region, providing the Asian dragon with access to raw materials and new markets for its manufactured goods, but could also provide the Chinese navy with refuelling stations, further fuelling speculation that China is following a 'string of pearls' policy in the region, developing ports in key locations.

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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You may also be interested in these related reports:

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