Calm Waters ahead for Chinese Seaborne Exports

The outlook for Chinese seaborne exports remains optimistic, particularly as growth on mainlane container trades from the Far East has picked up notably this year, according to Clarksons Shipping Intelligence Network.

While containerisable cargoes are likely to remain a key part and driver of China’s seaborne exports, shipments of minor bulk commodities and project-related cargoes could also play an increasingly important role, Clarksons’ Yanying Du said.

According to Clarksons data, Chinese seaborne imports have grown firmly in recent years to reach a total 2.0bt in 2013, and have accounted for a significant proportion of growth in global seaborne trade.

While import growth is expected to slow slightly this year (to 6%, from 11% in 2013), growth in exports has accelerated. After increasing by 2% in 2012, exports rose 11% in 2013 to reach 459mt, and have expanded by 19% y-o-y in January-July 2014.

The expansion of the Chinese Manufacturing Industry continued in September at unchanged pace as compared to the month before, BIMCO reports. The manufacturing industry accounts for around 1/3 of the Chinese economy and is a relevant indicator to watch out for in the shipping industry. What goes on in the manufacturing sector affects demand for container shipping and dry bulk shipping primarily. China Manufacturing PMI is a leading indicator for economic activity and development in GDP.

Chief Shipping Analyst at BIMCO, Peter Sand, said: “Expansion of the manufacturing sector point towards increased demand for shipping. 

“For container shipping the increase in new export orders are very welcome as larger exports volumes on the high-capacity trading lanes from China towards Europe and the US are needed. 

“2014 has so far been a year with increased uncertainty around the level of GDP growth in China. A solid activity level in the manufacturing sector contributes positively to support a continued strong economy in China. “

Containerisable cargoes account for the largest proportion of China’s exports in tonnes, and this year are expected to represent 41% of total shipments, Clarksons’ report shows.

“After slowing to an estimated 4% in 2012, growth in containerisable cargo exports has since picked up, supported by improved consumer demand in Europe and the US. In January-July 2014, estimated containerisable cargo exports increased by 12% y-o-y, with absolute growth of 14mt expected in the full year,” writes Clarksons’ Yanying Du.

“Meanwhile, exports of minor bulks have increased even more strongly. In 2014, minor bulk exports are expected to total 243mt, up 39% y-o-y, and up from 149mt in 2012. This level of exports would represent the first time Chinese minor bulk shipments have exceeded exports of containerisable cargoes in tonnes since 2009.

This firm increase in minor bulk exports is expected to account for 80% of total Chinese export growth this year, with shipments of steel products, pebbles and mineral sands up 39%, 68% and 72% y-o-y respectively in the year to date.”