Report: Chinese box volumes to reach 110 million TEUs in 2008
The increasing containerization of China’s exports, the lifting of textile quotas and other factors, will propel the country’s box volumes from an estimated 58.5 million TEUs in 2004 to 109.5 million TEUs in 2008, according to an investment report by Citigroup Smith Barney.
Having expanded 35 percent in 2002, 31 percent in 2003 and an estimated 20 percent in 2004, box traffic of Chinese ports is predicted to increase another 20 percent in 2005, 18 percent in 2006 and 15 percent in each of 2007 and 2008, according to the report, “China Ports: Big Cash Cow in the Making.”
Despite the expected slowdown, Citigroup Smith Barney said four factors continue to favor China’s container trade, besides the country’s rapid economic growth. They are:
* Increasing containerization of oceanborne goods.
* Industrialization of the economy.
* Further liberalization of international trade, including the lifting of textile quotas.
* Momentum created by foreign direct investment into China.
Commenting on containerization, the investment firm said this factor “has propelled the strong throughput growth above that of trade volume in the past.”
China’s containerization rate has reached 65 percent on average and 90 percent along the Yangtze and Pearl River deltas, up from 30 percent in the early 1990s.
“We see room for further growth as this figure is low compared with the 80-90 percent of developed nations, and this should help keep throughput growth,” the report said.
Because industrial products are usually shipped by containers, the investment firm also believes continued industrialization will result in a greater share of containerized exports.
However, the report noted the possible shift of China’s production to high-value products such as semiconductors could favor air cargo in the long term. “But we believe that it is too early in China’s development path for this to happen yet,” the report said.
Citigroup Smith Barney expects China’s share of global trade to increase beyond the current proportion of 20 percent.
The investment firm’s report predicts the port of Shanghai, China’s largest, will handle 27.3 million TEUs in 2008, with the port of Shenzhen in southern China moving 25.7 million TEUs in the same year. Both projected figures are higher than the current annual throughputs of Hong Kong and Singapore, the two largest container ports in the world.