Chinese economic slowdown to impact global box growth

Although the risks to container shipping from a slowdown in Chinese consumption are far smaller than for the dry bulk sector, they are “not inconsiderable” and will likely contribute to slowing world box growth.

Drewry Maritime Research noted in its latest Container Insight report that as Chinese policy makers attempted to rebalance the economy and drive growth less from investment and more from services and consumption, the perils of the transition had mostly been felt in the commodities markets.

Many in the dry bulk industry missed the slowdown in Chinese fixed asset investments and the fall off in demand for commodities such as iron ore, coal, and oil that have crashed to multi-year price lows.

But what does this mean for the for the container shipping sector? According to Drewry, Greater China (including Hong Kong) represents approximately 30% of all container moves in the world, having nearly doubled its share since the start of the century when its expansion was given a major boost following entry into the World Trade Organisation (WTO).

With such a large piece of the pie, the direction of the Chinese economy has a huge bearing on world port throughput growth which has prompted Drewry to downgrade its outlook for Greater China, and subsequently, world container traffic.

The maritime analyst has cut its 2015 growth forecast for Greater China port throughput from 5.8% to 4.9%, which represents a shortfall of approximately 1.85 million TEUS, or roughly 1% of world traffic in 2014.