The container export market out of China could weaken next year with economic recovery in developed countries “uncertain” and the risk of a global slowdown rising, according to Hutchison Port Holdings Trust.
HPHT, listed in Singapore in March after being spun off from Hutchison Whampoa’s global port business, operates deepwater container facilities in Hong Kong, Yantian and Shenzhen.
The company counted a US$140.8 million profit in the quarter ending Sept. 30, 3 percent below forecasts. Revenue generated in the July-September quarter totalled $418 million, 7 percent lower than expected.
Exact figures were not specified but the company said exports at both Hong Kong and Shenzhen had been below expectations.
“Demand for manufactured goods in Europe and the U.S. is expected to remain weak due to the Euro zone debt crisis coupled with high unemployment and the slow recovery of the U.S. economy,” the company said a statement.
HPHT reported growth in international transhipment, intra-Asia volume and trade on routes to Africa, Latin America, Oceania and the Middle East. However, this was offset by efficiency drives at carriers, with the use of larger vessels and more vessel sharing agreements to consolidate U.S. and European services.
HPHT’s view on economic growth in China was also bearish, not least because China’s coastal export industry has suffered this year from rising costs and lower demand.
“China’s economic growth is likely to relax, due to the weak demand for exports and the knock-on effects of the central government’s anti-inflation measures,” said HPHT. “Government initiatives to increase minimum wages has put pressure on the manufacturers of low value products.”
“However, recent active engagement at all levels of government to initiate policies aiming at easing many of the difficulties faced by manufacturing and (small and medium-sized enterprises) is an encouraging sign.”