China's Economy Adds New Threat to Container Shipping Demand - Wall Street Journal

"For delivery lines, just about any lower isn't particularly fantastic as of this moment," he said, adding which "in the particular grand scheme regarding's a danger yet any small one."

Despite warnings in which too much capacity and weak demand are putting downward stress on rates, a number of the largest shipping and delivery lines continue to record strong results.

Hong Kong features seen 12 straight several weeks of year-over-year declines in container volumes, although a few of that activity features shifted to ports about the mainland.

Dry bulk shipping may be most difficult hit as Chinese factories cut back on imports involving iron ore and other commodities.

China's economy continues for you to be gradually slowing pertaining to a range of years, however signs of the sharper downturn are generally piling up.Manufacturing activity throughout China fell into a two-year low throughout July based on data reported Monday within Beijing, and also economists say the country's stock-market rout could sap consumer as well as company confidence. ET

Container-shipping lines, already worried about demand from struggling economies within Europe and lots of emerging markets, can in addition add China with their listing of problems, in accordance with a manufacturer new document through Drewry Transport Consultants Ltd.

One mitigating factor: China's slowing economy will use a higher impact about incoming traffic, which is far less lucrative for shipping and delivery lines than upon outbound containers, said Simon Heaney, senior manager regarding supply chain analysis with Drewry.

"There are usually way a lot of ships from the moment trying in order to find inadequate cargo," Mr. Møller-Maersk




. Any relatively strong U.S. Which will end up being the equivalent associated with removing 1.85 million 20-foot equivalent units, or 1% associated with world-wide container traffic, coming from ocean trade lanes. economy will be helping offset weakness inside Europe as well as emerging markets.

A/S, parent or guardian involving Maersk Line, the particular largest container delivery line, reports earnings next week.

Many analysts have adopted a new bleak outlook for container shipping. 3, 2015 1:00 p.m. Japanese shipping and delivery lines last month reported strong profits, assisted in part by way of a weak yen. "That's unfortunately a scenario the particular market will be plagued along with to find a quantity of years."

Compose to Brian Baskin with

Aug. A.P. Heaney said. Nevertheless container delivery lines will end up being in pertaining to some pain as well, given that China and also Hong Kong represent about 30% regarding global container traffic, Drewry says. Giant new vessels able to carrying around 20,000 TEUs tend to be hitting industry even as global volumes underwhelm.

The consulting and study firm lowered its forecast for containers moving via ports throughout China along with Hong Kong to grow by simply 4.9% this year, from 5.8% in an earlier outlook

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