Boston, MA -- (SBWIRE) -- 06/14/2012 -- BMI View
Following positive throughput figures across China's port sector for the first half of 2011, we forecast another year of growth for Chinese ports, with the Port of Shanghai set to retain its title as the world's largest container terminal for at least another year. We caution, however, that there are downside risks to our outlook. We are concerned about a possible slowdown in Chinese economic growth, as well as the sluggish consumer demand in the US - China's biggest export market - and the eurozone in recent months.
We believe that a noticeable slowdown in growth is set to come into effect during our forecast period. Our core view on Chinese growth is that we are past the boom phase and we are entering a period of much weaker expansion, with headline real GDP growth set to fall to 7.5% by 2013. The slowdown in the construction sector will result in less demand for imports of goods such as iron ore and coal, while ports and shipping lines alike are feeling the effects of a gradual contraction in China's overseas trade volumes over our mid-term forecast period. Although this moderation in growth is expected to be soft, concerns over the possibility of a sharper contraction in Chinese bilateral trade adds a degree of downside risk to our projections.
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Headline Industry Data
- 2012 Port of Shanghai tonnage throughput forecast to grow 2.33%; over the mid-term we project average annual growth of 5.23%.
- 2012 Port of Shenzen container throughput forecast to grow 0.19%; over our forecast period we project average annual growth of 1.83%.
- 2012 trade growth forecast at 2.52%, a considerable slowdown from 2011's estimated 9.27%.
Key Industry Trends
Grand China Shipping Surprises With Intra-Asia Route Cut, Could Domestic Strategy Be Way Ahead? Chinese box carrier Grand China Shipping (GCS), part of Grand China Logistics, continues to decrease its exposure to the box shipping market, dropping another route and decreasing its container fleet. While BMI understands the reason behind GCS suspending its transpacific exposure, we are surprised by the company's latest move away from intra-Asia, which is somewhat protected from the rate turmoil on the developed trade routes.
China Increases Investment In Sri Lankan Ports, While India Orders Warships
BMI believes that protestations of the entirely amicable relationship between India and China with regards to the investment in ports on the island nation of Sri Lanka, off the southern tip of India, are somewhat belied by the massive investment India is set to make in building up its naval power over the coming years.
Direct Service Cancelled As Bangladesh-China Leg Struggles To Make Profit
BMI is unsurprised that a direct container shipping link between China and Bangladesh has been cancelled, given the disparity in export/import trade between the two countries.
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