China Cargo Throughput and Export Supported by Asia in 1Q23

Fitch Ratings-Shanghai/Hong Kong-03 May 2023: China’s total cargo throughput was up 8% yoy in 1Q23 versus 2% yoy in 4Q22, supported mainly by exports to Asia.

Total container throughput rose by 3% yoy versus 8% yoy in 4Q22. Fitch Ratings says the slower yoy growth was due mainly to the softer US and Europe demand, which however is offset by positive factors including newly opened shipping routes, the ramp-up of the Regional Comprehensive Economic Partnership (RCEP), and the rising number of China-Europe Express trips.

China exports remains flat yoy in 1Q23. Exports to North America and Europe remained weak, falling by 17% and 3%, respectively, indicating tepid demand due to high inflation and economic slowdown. The manufacturing PMI in the US and Eurozone continues to remain below 50. However, exports to Asia rebounded, up by 6% yoy due to the export boost to RCEP members and countries covered in the Belt and Road Initiative (BRI).

Shanghai Containerised Freight Index/China Containerised Freight Index (SCFI/CCFI) was down 80%/68% yoy in 1Q23, driven by routes from Shanghai to the US (down 78% yoy) and Europe (down 87% yoy). Meanwhile, the Baltic Dry Index (BDI) dropped 50% yoy due mainly to slowing demand in China, and the Baltic Dirty Tanker Index (BDTI) rose 51% yoy due to changes in crude oil import and export patterns between Europe and Russia.

Fitch expects demand from the US and Europe may remain weak in 2Q23 while Asia is likely to remain a growing area for export and throughput, driven by RCEP and BRI. We expect Shanghai Port throughput growth may rebound slightly in 2Q23, given the low base resulting from lockdown in 2022.

The report, “China Port Watch – 1Q23”, is available at www.fitchratings,com or by clicking on the link above.

Source: Fitch Ratings

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