Asia/Pacific News
Drewry: China's Economic Slowdown Will Translate to Demand Loss in Container Market
Drewry Shipping Consultants Ltd. (Drewry) says China’s economic slowdown will likewise affect the demand within the container freight market.
Drewry, pointing out that Greater China - including Hong Kong - represents approximately 30 percent of all container moves in the world, asserts that “the Chinese economy has a huge bearing on world throughput growth.”
“The risks from a slowdown in Chinese consumption to container shipping are far smaller than for the dry bulk sector, but they are not inconsiderable and will contribute to slowing world box growth.” said Drewry.
As it is difficult to measure the relative strength of container imports and exports due to limited accessibility to a breakdown of Chinese port statistics, Drewry says that it has used World Trade Organization’s (WTO’s) merchandise trade data to estimate China’s share of imports, which is in the “mid-40 percent range”.
The company also notes that China container imports grew by 1.6 percent last year, while exports rose by 9.1 percent, meaning that the resulting total volume growth was left unchanged at 5.6 percent.
“The latest WTO data suggests that China’s merchandise imports were down by 15.5 percent in the first six months of 2015, whereas merchandise exports managed a 1.0 percent rise,” noted Drewry.
“A slowdown in the growth of Chinese container imports lays behind the static overall growth picture.”
Meanwhile, the International Monetary Fund (IMF) is said to have maintained its World Economic Outlook forecast of China’s GDP growth at 6.8 percent for this year, and 6.3 percent for next year.
“These are still numbers that most other economies can only dream of, but the slowing trend has prompted Drewry to downgrade its outlook for Greater China, and subsequently, world container traffic,” explained Drewry.
“Against this slowing inbound backdrop, Drewry has cut its 2015 growth forecast for Greater China port throughput from 5.8 percent to 4.9 percent, which represents a shortfall of approximately 1.85 million TEU, or roughly 1 percent of world traffic in 2014.”
In June, Drewry released an analysis which argued that being a "top 20 carrier" no longer means being a leading global container line, noting that the top three container lines now have a 38 percent market share.
