Shanghai port figures suggest box volumes have bottomed out

Shanghai: Hard-pressed container lines will be relieved by the latest figures from Shanghai port, revealed exclusively by Seatrade Asia Online. The port, the largest in the world overall and number two on the box front, is widely perceived as a bellwether for container fortunes. A solid July has revived the port. "We feel the trend of decreasing has slowed down," said Lu Haihu, chairman of Shanghai International Port (Group). This combined with recent reports from both the state and CLSA showing manufacturing in China is back up lend credence to the feeling container volumes ex-China have bottomed out. CLSA's China Purchasing Managers' Index (PMI), a key gauge of China's manufacturing sector, rose to a one-year high in July of 52.8 from 51.8 in June. The positive PMI also suggests that export orders rose last month.
Moreover, data released this week by China's Ministry of Transport shows the country's ports handled 10.1m teu in July, down 3.8% year-on-year. The monthly decline was the lowest this year.
In the first half Shanghai container throughput was 15.5% down year-on-year, but an improved July, down just 200,000 teu year-on-year, at 2.15m teu means the year to date is down 14.5%. Chairman Lu anticipates full year box figures of 24.5m teu, a big gap from earlier goals of cracking 30m this year. Having been operating at up to 33% over its operating capacity just four years ago, Chairman Lu revealed that now with Phase IIIB of Yangshan port up and running since last December "Shanghai port is suffering from an oversupply of box facilities". Plans for further phases of development have been put on hold. Yangshan - comprised of two islands to the southeast of Shanghai, opened in November 2005. Thus far, all phases of development have focused on the northern, smaller island, which is now full bar some lower draught shoreline on the west of the island that in years to come will be developed for barge use. Development of the southern larger island has been put on hold during the container recession.
In a further visible sign that the worst is over from a box volume point of view at this key Chinese trading artery Lu revealed that the number of empty containers in the city had reduced from a peak of 700,000 in February to 400,000 which is just slightly above the historical average. "Empty boxes are now reducing as foreign trade picks up," Lu said.
SIPG's viewpoint was backed up by one of its neighbours on East Daming Road overlooking the Huangpu, Cosco Container Lines (Coscon), whose md, Dr Sun Jiaking told SAO yesterday that volumes for the carrier have been picking up ever since the nadir for the carrier back in February when volumes were half of those recorded in the same period in 2008. Sun revealed that back in February 25% of the Coscon fleet had been laid up. That figure now stands at just 6%, some 4% better than the industry average as recorded by France's AXS-Alphaliner. This above industry figure was down to the thriving China coastal services Coscon has enjoyed this year.
The latest issue of Seatrade, just out, has a cover story debating whether or not the worst is over for the beleaguered container shipping sector. Subscriptions are available here: http://www.seatrade-global.com/secure/SG3.asp [06/08/09]

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