Throughput Rises at Most Major Chinese Container Ports

Throughput Rises at Most Major Chinese Container Ports

Despite fears of an economic slowdown and the Chinese New Year factory shutdown starting earlier this year than in 2013, most of China’s top container ports recorded healthy levels of throughput growth last month, according to the latest figures from the Shanghai Shipping Exchange.

Of the top 20 ports by TEU, ports in northern China yet again outstripped their southern counterparts in January. Three of the top four box ports in terms of year-on-year growth rates were located on the Bohai Rim, led by Dalian (8.7 percent), Tianjin (7 percent) and Qingdao (6.8 percent).Ningbo-Zhoushan (7 percent) located near the mouth of the Yangtze River Delta, also recorded solid growth as did, surprisingly, Shenzhen (5.6 percent), which has seen growth rates slow in recent years.

Neighboring Hong Kong, however, saw 2.7 decline in January compared to a year earlier suggesting its leading terminals were continuing to lose ground.

Throughput at top Chinese ports, Jan. 2014 vs. Jan. 2013Throughput at top Chinese ports: year-over-year change, Jan. 2014 vs. Jan. 2013

In its recent analysis of Hutchison Port Holdings, a major terminal operator at Hong Kong and in southern China, Drewry Maritime Equity Research said it expected Hong Kong terminals to see growth of 6.3 percent in FY 2014, but this was from a low base after strikes in 2013. In the medium term the competitive outlook for the port’s terminals is poor.

“Overall, HK port terminals suffer from structural headwinds of costlier handling and development of mainland terminals,” the note said. “Additionally DMER believes that dependence of HK terminals on volatile transhipment cargoes is a concern, given that transhipment volumes can be under pressure from the effect of the proposed P3 and stressed liner industry financials.”

By contrast, DMER was bullish on HPH’s mainland China assets at Yantian/Shenzhen, which will benefit from strong East-West traffic as the U.S. and European economies recover.

Of the mainland ports, Shanghai led the way in January in terms of total throughput, followed by Shenzhen, Qingdao, Guangzhou and Tianjin, SSE said.

Shanghai saw year-over-year growth in volume of 2.7 percent in January, but volume was 11 percent higher than in December 2013. Guangzhou, by contrast, posted healthy 4.4 percent growth compared with January 2013, but an 8.6 percent decline versus December 2013.

“Recent numbers from China showed a January bounce in both exports and imports,” said Frederic Neumann, co-head of Asian Economic Research.

However, he said this did not necessarily mean Asia’s widely expected trade rebound has finally arrived.

“With financial conditions tightening locally, and investment and consumer spending likely cooling as a result, will exports provide enough thrust for the region to continue to thrive? Perhaps not,” he said. “There are cyclical and structural reasons why trade, for decades the engine of Asian prosperity, may not deliver its customary support this time around.”

While China’s exports rose 10 percent in January, this did not indicate the start of soaring regional exports, according to Neumann. “New export orders, as reported by the official and HSBC’s PMIs, contracted over the last two months,” he said. “Meanwhile, Taiwan, another regional bellwether, and one that has recently done better than others thanks to a robust tech cycle, reported falling shipments last month.”

The implication, he said, was that if exports do not fire up as in past economic cycles, as seems likely, Asian officials will have to keep local demand humming. “That’ll require doubling down on reforms,” he added.

Contact Mike King at mikeking121@gmail.com.