China’s total cargo throughput was up by 3% yoy in 4Q22, while foreign trade cargo declined by 1% yoy at eight major coastal ports, mainly due to continued weakening overseas demand, says Fitch Ratings.
Total container throughput increased 7% yoy in 4Q22, driven by newly opened shipping routes and sea-rail transportation routes along with Regional Comprehensive Economic Partnership Agreement, which took effect in January 2022.
Export value declined 7% yoy for the first time since 1Q20, mainly due to high inflation and slowing economies in overseas markets. The manufacturing purchasing managers’ index (PMI) contracted in US and Japan since November, falling below 50, while the eurozone’s manufacturing PMI decreased further to 47 in 4Q22 from 49 in 3Q22, implying contractions for the global major markets.
Shipping rates were highly volatile, given the inflationary environment and geopolitical issues. The Shanghai Containerised Freight Index/China Containerised Freight Index decreased 71%/51% yoy in 4Q22, driven by lower shipping rates for routes from Shanghai to US and Europe. Meanwhile, the Baltic Dry Index dropped 56% yoy in 4Q22 due to weakening dry bulk demand. The Baltic Dirty Tanker Index increased 154% yoy amid geopolitical issues that result in European countries paying higher shipping rates for longer routes.
We expect throughput to worsen in January and February – given the rising number of Covid-19 infections and seasonal effects of Chinese New Year – then ease in late February, benefitting from China’s reopening. However, downsides are likely to persist, including weak consumer sentiment and soft external demand resulting from high inflation and geopolitical issues.
Source: Fitch Ratings
Source: Fitch Ratings
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