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    -0.8%
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    0.042
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    -57.980
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  • OTRI.USA
    6.020
    0.110
    1.9%
  • OTVI.USA
    10,502.790
    -61.450
    -0.6%
  • TLT.USA
    2.440
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News

Port Report: China’s coastal shipping begins to suffer from over-capacity

 (Photo: Wikipedia)
(Photo: Wikipedia)

Dry bulk and container shipping along China coast seeing too much capacity, according to government statistics, leading to falling rates.

China’s domestic coastal shipping market is generally stable, according to a new report from the country’s Ministry of Transport, but there are increasing issues with over-capacity. The report looks at coastal dry bulk shipping, domestic wet bulk shipping, coastal box shipping and cross-Taiwan Strait trade.

Domestic dry bulk
Growth rates for the domestic maritime transport of coal, ore and grain have slowed, the report stated, adding that shipping capacity has increased. China had a total of 1,832 dry bulk carriers, each with a capacity of more than 10,000 metric tons, in its coastal trade and a total deadweight capacity of 62.5 million metric tons. Deadweight is a metric ton measure of the weight-carrying capacity of ships. (A metric ton is about 2,205 U.S. pounds.) Shipping capacity in China’s domestic dry bulk trades increased by 13.1 percent year-over-year. The tonnage of imported second-hand ships accounted for more than 40 percent of new capacity, the report stated. The Ministry anticipates that, in the coming year, the demand for dry bulk transport will slow down at the same time that a “large number” of ships enter the market.

Coastal wet bulk
Demand for coastal oil tanker transport declined while capacity increased, according to the report. The market was affected by the overhaul of marine oil terminals and the suspension of production in some refineries. Volumes of oil cargoes declined by 7 percent year-over-year, the report stated, to stand at 70. 4 million tons. By the end of 2018, China had 1,296 domestic oil tankers with a total capacity of 1.02 million deadweight, which the report described as a “slight increase in capacity.” In 2019, the overall demand for coastal oil transport in China is forecast to decline due to a reduction in the number of oil fields and the construction of domestic oil pipelines. Although domestic oil production is forecast to rise, the supply of vessel capacity is thought to be “generally sufficient.”

Demand for bulk liquid chemical transport is described as “stable,” capacity is in a slight “surplus” and the freight rate remains “stable.” China’s chemical production and consumption is said by the Ministry to be in a period of “low growth.” Domestic coastal transport of liquid chemicals reached 26.8 million tons, a year-over-year increase of 3.1 percent. The domestic coastal Chinese chemical-tanker fleet (which includes oil tankers, chem-tankers and dual purpose ships) stood at 288 ships that, together, have a deadweight of 1.12 million metric tons.

China’s liquefied gas carrier market experienced increased demand in 2018 but was otherwise “generally balanced.” By the end of 2018 there were 72 coastal liquefied gas carriers with a total deadweight of 247,900 metric tons. That might not sound like a lot, but when natural gas (methane) is cooled to minus 260 Fahrenheit it changes state into liquid and condenses to about 1/600th of its gas-phase volume.

China’s domestically carried LNG volumes in 2018 were described by the Ministry as “basically unchanged” since the previous year. Meanwhile, the capacity for the carriage of gases such as propylene and ethylene were described as “slightly tight.” The total 2018 volume of seaborne coastal liquefied gas transport was 3.23 million metric tons, up 3.8 percent compared to the previous year.

Looking forward to the current year, the Ministry noted that due to the commissioning of “large petrochemical base projects,” the demand for bulk liquid chemical and liquefied gas transport carriage has increased “but the growth rate is limited.” Ship capacity is expected to grow in line.

Domestic box shipping
China’s domestic box shipping industry saw the introduction of a large amount of extra capacity and freight rates are “generally falling.” In 2018 China’s domestic coastal box traffic increased year-over-year by just under 8 percent. By the end of 2018 there was a total of 252 vessels with a box-carrying capacity greater than 700 twenty-foot equivalent units (TEU); that fleet had a total capacity of about 716,000 TEU. The number of boxes carried increased by 18.3 percent. Demand for the carriage of cargoes, particularly coal and grain, remains strong but because of the introduction of new ships, the capacity situation has slackened further.

Looking forward to 2019, China’s Ministry of Transport envisages growth in the coastal box shipping trade, due to an increase in the domestic containerization rate, that will partially absorb excess ship capacity. However, the Ministry warns, excess capacity from the international box shipping trades could be redeployed into the domestic market.

Cross-Taiwan Strait Trade
There was a marginal increase in direct cargo volumes shipped across the strait. Volumes in 2018 stood at 50.22 million metric tons, a year-over-year increase of 0.5 percent. Bulk cargoes (unspecified) stood at 14.78 million tons, up 2 percent on the prior corresponding period. Bulk liquid chemical transport stood at 5.23 million tons, up 1.8 percent, and liquid petroleum gas products stood at 870,000 metric tons in 2018, which was up 7 percent on the previous year. Oil product volumes stood at 43,000 metric tons, which was up 26.1 percent on the previous year. Meanwhile, the cross-strait box traffic volume was 2.2 million TEU in 2018, a decrease of 2.1 percent from the previous year. The Ministry of Transport says that volumes were generally up in 2018 owing to cross-strait exchanges and cooperation. It predicts that the two-way cross-strait container trade volumes will further increase by up to 10 percent in 2019.

Another deepwater tanker dock eyed for Texas Gulf Coast

Moda Midsteam readies first VLCC berth for 2019 and may add one more. (MarineLink)

Venezuelas oil company declares maritime emergency

Management group refused to crew tankers for quickly failing state company. (gCaptain)

Korean state bank to finance more vessel orders

But additional funding comes with requirement that owners consolidate. (TradeWinds)

Maersk CEO is not bullish on 2019

Soren Skou is concerned that Europe will be the next trade fight. (ShippingWatch)

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China\u2019s domestic coastal shipping market is generally stable, according to a new report from the country\u2019s Ministry of Transport, but there are increasing issues with over-capacity. The report looks at coastal dry bulk shipping, domestic wet bulk shipping, coastal box shipping and cross-Taiwan Strait trade. Domestic dry bulkGrowth rates for the domestic maritime transport of coal, ore and grain have slowed, the report stated, adding that shipping capacity has increased. China had a total of 1,832 dry bulk carriers, each with a capacity of more than 10,000 metric tons, in its coastal trade and a total deadweight capacity of 62.5 million metric tons. Deadweight is a metric ton measure of the weight-carrying capacity of ships. (A metric ton is about 2,205 U.S. pounds.) Shipping capacity in China\u2019s domestic dry bulk trades increased by 13.1 percent year-over-year. The tonnage of imported second-hand ships accounted for more than 40 percent of new capacity, the report stated. The Ministry anticipates that, in the coming year, the demand for dry bulk transport will slow down at the same time that a \u201clarge number\u201d of ships enter the market. Coastal wet bulkDemand for coastal oil tanker transport declined while capacity increased, according to the report. The market was affected by the overhaul of marine oil terminals and the suspension of production in some refineries. Volumes of oil cargoes declined by 7 percent year-over-year, the report stated, to stand at 70. 4 million tons. By the end of 2018, China had 1,296 domestic oil tankers with a total capacity of 1.02 million deadweight, which the report described as a \u201cslight increase in capacity.\u201d In 2019, the overall demand for coastal oil transport in China is forecast to decline due to a reduction in the number of oil fields and the construction of domestic oil pipelines. Although domestic oil production is forecast to rise, the supply of vessel capacity is thought to be \u201cgenerally sufficient.\u201d Demand for bulk liquid chemical transport is described as \u201cstable,\u201d capacity is in a slight \u201csurplus\u201d and the freight rate remains \u201cstable.\u201d China\u2019s chemical production and consumption is said by the Ministry to be in a period of \u201clow growth.\u201d Domestic coastal transport of liquid chemicals reached 26.8 million tons, a year-over-year increase of 3.1 percent. The domestic coastal Chinese chemical-tanker fleet (which includes oil tankers, chem-tankers and dual purpose ships) stood at 288 ships that, together, have a deadweight of 1.12 million metric tons. China\u2019s liquefied gas carrier market experienced increased demand in 2018 but was otherwise \u201cgenerally balanced.\u201d By the end of 2018 there were 72 coastal liquefied gas carriers with a total deadweight of 247,900 metric tons. That might not sound like a lot, but when natural gas (methane) is cooled to minus 260 Fahrenheit it changes state into liquid and condenses to about 1\/600th of its gas-phase volume. China\u2019s domestically carried LNG volumes in 2018 were described by the Ministry as \u201cbasically unchanged\u201d since the previous year. Meanwhile, the capacity for the carriage of gases such as propylene and ethylene were described as \u201cslightly tight.\u201d The total 2018 volume of seaborne coastal liquefied gas transport was 3.23 million metric tons, up 3.8 percent compared to the previous year. Looking forward to the current year, the Ministry noted that due to the commissioning of \u201clarge petrochemical base projects,\u201d the demand for bulk liquid chemical and liquefied gas transport carriage has increased \u201cbut the growth rate is limited.\u201d Ship capacity is expected to grow in line. Domestic box shipping China\u2019s domestic box shipping industry saw the introduction of a large amount of extra capacity and freight rates are \u201cgenerally falling.\u201d In 2018 China\u2019s domestic coastal box traffic increased year-over-year by just under 8 percent. By the end of 2018 there was a total of 252 vessels with a box-carrying capacity greater than 700 twenty-foot equivalent units (TEU); that fleet had a total capacity of about 716,000 TEU. The number of boxes carried increased by 18.3 percent. Demand for the carriage of cargoes, particularly coal and grain, remains strong but because of the introduction of new ships, the capacity situation has slackened further. Looking forward to 2019, China\u2019s Ministry of Transport envisages growth in the coastal box shipping trade, due to an increase in the domestic containerization rate, that will partially absorb excess ship capacity. However, the Ministry warns, excess capacity from the international box shipping trades could be redeployed into the domestic market. Cross-Taiwan Strait TradeThere was a marginal increase in direct cargo volumes shipped across the strait. Volumes in 2018 stood at 50.22 million metric tons, a year-over-year increase of 0.5 percent. Bulk cargoes (unspecified) stood at 14.78 million tons, up 2 percent on the prior corresponding period. Bulk liquid chemical transport stood at 5.23 million tons, up 1.8 percent, and liquid petroleum gas products stood at 870,000 metric tons in 2018, which was up 7 percent on the previous year. Oil product volumes stood at 43,000 metric tons, which was up 26.1 percent on the previous year. Meanwhile, the cross-strait box traffic volume was 2.2 million TEU in 2018, a decrease of 2.1 percent from the previous year. The Ministry of Transport says that volumes were generally up in 2018 owing to cross-strait exchanges and cooperation. It predicts that the two-way cross-strait container trade volumes will further increase by up to 10 percent in 2019. \n \n Another deepwater tanker dock eyed for Texas Gulf CoastModa Midsteam readies first VLCC berth for 2019 and may add one more. (MarineLink) Venezuelas oil company declares maritime emergencyManagement group refused to crew tankers for quickly failing state company. (gCaptain)Korean state bank to finance more vessel ordersBut additional funding comes with requirement that owners consolidate. (TradeWinds)Maersk CEO is not bullish on 2019Soren Skou is concerned that Europe will be the next trade fight. (ShippingWatch)\n\n\n\n\t\n\n\n","publisher":{"@id":"#Publisher","@type":"Organization","name":"FreightWaves","logo":{"@type":"ImageObject","url":"https:\/\/www.freightwaves.com\/wp-content\/uploads\/2019\/03\/FW-LOGO2018-Color@5x.png"},"sameAs":["https:\/\/feeds.feedburner.com\/Freightwaves","https:\/\/www.facebook.com\/freightwaves","https:\/\/twitter.com\/freightwaves","https:\/\/www.linkedin.com\/company\/freightwaves","https:\/\/www.youtube.com\/channel\/UC36dglNLPZNKuSp30JVP5yg\/videos","https:\/\/www.instagram.com\/freightwaves\/"]},"sourceOrganization":{"@id":"#Publisher"},"copyrightHolder":{"@id":"#Publisher"},"mainEntityOfPage":{"@type":"WebPage","@id":"https:\/\/www.freightwaves.com\/news\/maritime\/port-report-china-shipping-glut-grows","breadcrumb":{"@id":"#Breadcrumb"}},"author":{"@type":"Person","name":"Jim Wilson, Australia Correspondent","url":"https:\/\/www.freightwaves.com\/news\/author\/jimwilson"},"image":{"@type":"ImageObject","url":"https:\/\/www.freightwaves.com\/wp-content\/uploads\/2019\/03\/COSCO_Freighter-1.jpg","width":1549,"height":1024}}
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Jim Wilson, Australia Correspondent

Sydney-based journalist and photojournalist, Jim Wilson, is the Australia Correspondent for FreightWaves. Since beginning his journalism career in 2000, Jim has primarily worked as a business reporter, editor, and manager for maritime publications in Europe, the Middle East, Asia, and Australia. He has won several awards for logistics-related journalism and has had photography published in the global maritime press. Jim has also run publications focused on human resources management, workplace health and safety, venture capital, and law. He holds a degree in law and legal practice.
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