China's Container Port-Handling Volume Rises in April

2014-05-12

China's container ports in April registered their biggest gains in port-handling volumes so far this year. The measure indicates the nation's export trade remains robust despite concerns of slowdown.

Handling volumes at the nation's 10 busiest container ports grew more than 7% in April from a year earlier, accelerating from a 6.5% growth rate the previous month, according to preliminary data compiled by data provider Chineseport. Chinese ports will announce April data on an individual basis later this month.

Most exports of manufactured consumer goods—such as electronics, furniture and garments—are shipped in containers.

The figure complements China's positive trade data, and offers the latest sign that a slowdown in the world's No. 2 economy may be nearing an end. Though the nation's exports in April rose by a modest 0.9% from a year earlier, that compares with a 6.6% decline in March.

Chinese port operators say they have seen a pickup in trade activity over the past month, thanks to steady growth in the U.S., continued economic recovery in Europe and strong demand for trade within Asia.

"We have seen particularly strong growth in eastern coastal Chinese ports, which handle more high-end manufacturing goods for exports," said Yu Liming, executive director at Chinese port investor China Merchants Holdings (International) Co. The company has port investments nationwide and abroad.

Mr. Yu said exports from central Chinese cities, shipped through rivers to eastern ports, also contributed to growth during the month. The eastern Port of Ningbo registered more than a 20% rise in container-handling volume in April, while the Port of Shanghai, China's biggest and most well-established port, saw the measure rise about 6%, according to Chineseport.

China's port-handling volume also lifts recovery prospects for the global shipping industry, now in its sixth year of downturn. Credit-rating firm Moody's Investors Service earlier this month upgraded the outlook for the shipping industry to stable from negative, the first time since June 2011. The firm cited improved earnings, lower fuel cost and a better balance of port capacity to goods moving through them.

Shipping rates across the Pacific Ocean also are increasing. Container-shipping lines for trans-Pacific trades are planning to levy a peak season surcharge of US$400 per a standard 40-foot-equivalent unit—a common shipment size—to all shipments to the U.S. from mid-June. This couples with a general rate increase of up to $400 from May 15, according to the Transpacific Stabilization Agreement, an industry group of 15 major container-shipping lines that operate between Asia and North America.

Yet stronger demand won't necessarily translate into profits, as excess capacity still weighs the industry. To mitigate this, the world's major container-shipping operators are seeking to raise rates still further.

"The upcoming rate hikes will likely be partially successful, as were their previous attempts, as modest demand growth is insufficient to give shipping rates a big push amid abundant shipping capacity," said Geoffrey Cheng, head of Transportation & Industrial Research at Bocom International.

Source from : Wall Street Journal

HEADLINES