Port Trade Structural Transformation Is Imminent, Global Container Trade Recovery Accelerates
The Global Port Development Report (2014) issued by Shanghai International Shipping Institute (SISI) on April 10, 2015 points out that the year 2014 witnessed global ports’ transformation of their industrial adjustment acceleration and their operation mode optimization. In 2014, the container shipping volume, which relied on the trading of high value-added commodities, grew rapidly, forming a sharp contrast with the growth rate-declining international staple bulk cargo trade. The container throughput growth rate at global major ports exceeded the cargo throughput growth rate, hopefully becoming a new normal of the commodity trade at global ports.
Throughput growth rate at global ports gradually slowed down. In 2014, the global economic and trade recovery was still slow. Especially, affected by the economic growth rate slowdown and the weak construction investment and production demand as well as the trade decline of bulk cargoes including energy and ores in the emerging countries including those in the Asia Pacific Region, the overall throughput growth trend of global ports was weak. In 2014, the throughput growth rate of major global ports declined to 4.3 percent from 5.1 percent in the previous year. The throughput in the whole year of 2014 showed a smiling curve trend. The trade structural transformation accelerated global ports' trend to enter the low-speed stable-growth development channel.
Various regional ports in the globe maintained their expansion trend. The further loosened monetary policy and the financial policy's neutralized development in Europe provided a stable support for the industrial activities, and commercial and trade contacts. The benefit was that the cargo throughput at major European ports achieved a year-on-year increase of 3.7 percent, setting a new high in recent years. The economics in America region operated stably; its major ports achieved a year-on-year growth of 3.6 percent in 2014, an increase of one percentage point from the previous year, maintaining its increasing growth trend. The reindustrialization strategy of the U.S. strengthened its domestic economic vitality, but at the same time, its commodities' import demand was also reduced to some extent, exerting an adversary impact on the port production. The throughput growth rate at major ports in Asia in 2014 was 4.2 percent, a decrease of 1.8 percentage points, and major ports in Asia only maintained a single digit growth. In addition, the cargo throughput growth rate at ports in Australia in 2014 was still maintained at a high level of 9.1 percent, although its growth rate slowed down as compared with that of the previous year, and the constantly increasing iron ore export was the main driving force. The throughput growth rate at ports in Africa in 2014 went down once again, namely achieving a growth rate of only 1.6 percent.
Production situation at ports in China apparently slowed down. In 2014, China's ports with a certain scale achieved a cargo throughput of 11.2 billion tons, a year-on-year growth of 4.8 percent and a growth rate decrease of 4.1 percentage points from the previous year. But the performance in each month was relatively stable, namely the monthly growth was maintained within a scope between 2 percent and 9 percent, showing that the monthly growth rate fluctuation in 2014 was apparently smaller than that in the same period of the previous year. In addition, the driving force for the port throughput growth in the first half of 2014 was mainly from the good development of the import and export trade, but in the second half of 2014, the driving force was from the support provided by the domestic-trade cargoes due to gradually weak foreign-trade driving force caused by the exchange-rate fluctuation and sluggish international market demand.
Dry bulk cargo throughputs showed difference in cargo type. Although international dry bulk cargo market was featured by oversupply, which resulted in the constant price decline for staple bulk cargoes including coal and iron ore, different dry bulk cargoes showed apparent discrepancy in trading vitalities.. Stimulated by the low global iron ore price, the import demand in countries including China, Japan and South Korea was kept at a high level. As a result, the throughput at iron ore-loading ports including Hedland constantly increased with an annual growth rate at over 30 percent, and the throughput at main iron ore-unloading ports including Ningbo-Zhoushan, Tangshan and Gwangyang also achieved the double digit growth. The coal throughput at global ports in 2014 was still kept at a high level. As the energy structure optimization and the increasingly strict environmental protection requirement further restrained the development of seaborne coal trade, the global coal shipping volume in 2014 was 1.20 billion tons, an increase of only 1.44 percent. Although the coal-loading volume in main coal exporting countries including Australia and South Africa still rose, the growth rate apparently went down. The import volume in main coal importing countries including China also went down dramatically, and the coal throughput growth at ports including Shanghai, Ningbo-Zhoushan and Tangshan showed a slowdown trend.
Liquid bulk cargo throughput at global ports increased at first, but decreased later. The Shale Gas Revolution and the price competition among oil-producing countries led to the constant decline of global oil price. Although emerging markets such as China increased oil import volume, the trading of oil-type cargoes apparently went down due to high oil inventory in Europe and America, and reduced oil production in oil-producing countries in the second half of 2014, which caused the sluggish throughput of liquid bulk cargo at ports. Boosted by the “China strategy” and “commercial oil stock”, the annual growth rate of oil-type cargo handling at ports of Singapore and South Korea was less than one percent. The liquid bulk cargo demand in Europe was even more sluggish, namely the year-on-year growth rate at its main ports was only 0.2 percent.
It is estimated that the global port industry in 2015 will still maintain the low-speed growth pattern. Although global economic and trade development still faces many uncertainties including the implementation of "industry localization" strategy in the U.S., the sustainability of financial and monetary policy in Europe, the declining trend of Japan's economic development, gradually declining trend of growth rate in such emerging markets as China and the risk like geopolitical friction, which may hamper the development of global seaborne trade, various global major prediction institutions still show strong confidence in world economy in 2015, especially for trade growth. It is expected that continuous improvement of economic and trade environment will sustain constant and stable growth of port trade. It is estimated that the growth rate of global port throughput in 2015 will still stay at about 4 percent.
It is expected that global container trade will continuously expand in 2015, but dry bulk cargo trade will lack staying power. The factors, including the recovery of the economic and trade activities, the increasingly close international bilateral and multilateral cooperation, the deepening of such trade cooperation as the U.S.-led Trans-Pacific Partnership Agreement (TPP) and the Transatlantic Trade and Investment Partnership (TTIP) as well as the improvement of such regional trade environments as China's pilot free trade zones and China-Japan-South Korea Free Trade Area, will all be directly conducive to the increase of international commodity trade, and then drive the development of container trade. It is estimated that the growth rate of container throughput at global ports in 2015 will be maintained at above 5 percent. In addition, successive record-low Baltic Dry Index (BDI) in 2014 reflected excess shipping capacity, the lack of driving power in international dry bulk shipping demand, the fundamental pressures including economic transformation that emerging countries will face and the unsustainable investment-dominant economy, causing the worrisome shipping prospect for staple commodities including ores and coal. It is estimated that global bulk cargo trade in 2015 will still be maintained at a high level, but with a further slowdown of growth rate.
Shanghai International Shipping Centre is an institution of research and consultation on international shipping industry development, providing decision-making, consultation and information service.The Global Port Development Report (2014) along with its English version has been released in Apr 2015 again by SISI, which is committed to analyze the development trends of global ports and looking forward to 2015 in several aspects, such as throughput, operating management, construction situation and technology application.