Exports from Asia remain vibrant despite the sluggish pace of global economic growth, but they are also highlighting the areas of container trade growth and and those of demand decline, according to a new analysis by Clarksons Research.
Container trade is expected to expand at a slower rate this year than in 2014 because of factors such as the relatively soft European demand, the slowdown in Chinese economic activity, and weaker commodity prices are.
The box trade generated by exports from Asia, the chief engine of which is China, is quite significant, said the report. Exports to Europe, North America, the Middle East/Indian Sub-Continent region, and on the North-South trades of Latin America, Africa, and Oceania are expected to account for 52 million TEUs in 2015, or 29% of global trade.
Asian exports within the vast intra-Asian trades are likewise sizable and expected to total 50 million TEUs this year.
The report tracked the performance of Asian exports on key trades and concluded that volumes have dropped in some places but have grown elsewhere, illustrating the currently “very mixed demand side picture.”
Far East-Europe trade volumes have experienced an upheaval this year. The change in direction on the peak leg trade from growth of 7% in 2014 to expected contraction of 3% in full year 2015 is estimated to have cut around 1% from global box trade growth this year.
European demand appears to have been muted as a result of an economically challenged Eurozone, a collapse in Russian imports as well as a response to excess inventory buildups in 2014.
Meanwhile, while Asian box exports to Southern Hemisphere regions are expected to show growth this year, they are only projected to expand by a modest 4%. This is understood to have been the result of continued economic challenges in Latin America, and the impact of slower Chinese demand and lower commodity prices on developing economies.
On the other hand, the report noted strong demand so far for Asian products in North America, where US economic expansion has been robust this year. Box trade on this route is projected to rise 7% this year to 15.8 million TEUs. Asian exports to the ME/ISC region appear to have grown strongly this year, too, with Indian economic activity estimated to be robust. Box trade on this route is expected to rise 7% in 2015. Overall, Asian exports to these four listed regions are expected to grow 3.5% this year, from 7.1% in 2014.
As for intra-Asia container trade, the slowdown in regional economic activity due to softer Chinese demand and the difficulties being encountered by some of the economies here has also dented Asian export volumes. This development is seen to hem in box volume growth on the intra-Asia network to 4.3% in full year 2015, below the 2014 estimated rate of 6.1%.
“So the mixed performance of Asian box exports reflects the key trends in global box trade this year. Even if volume growth is still expected to outstrip expansion in many other shipping sectors, and 2016 is projected to see an improved rate of growth, current demand side trends clearly illustrate the headwinds facing the containership sector,” said the report.
Photo: Baycrest
