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China's Cargo Throughput Worsens in Feb

Fitch Ratings has revealed a 3% YoY increase in China's total cargo throughput in the 4th quarter of 2022, while foreign trade cargo saw a 1% decline at major coastal ports. This was due to the weakening of overseas demand.

Fitch Ratings logo
Fitch Ratings logo

Increase in Container Throughput

The total container throughput increased by 7% YoY in 4Q22, thanks to new shipping routes, sea-rail transportation routes, and the Regional Comprehensive Economic Partnership Agreement.

A Decline in Export Value

Export value declined by 7% YoY in the first quarter of 2023 due to high inflation and slowing economies in overseas markets. The manufacturing PMI contracted in the US and Japan, with the eurozone's manufacturing PMI decreasing to 47 in 4Q22, implying contractions for major global markets.

Cargo ship
Cargo ship

Volatility in Shipping Rates

Shipping rates were highly volatile due to the inflationary environment and geopolitical issues. The Shanghai Containerised Freight Index and China Containerised Freight Index decreased by 71% and 51% YoY in 4Q22, respectively, driven by lower shipping rates for routes to the US and Europe. The Baltic Dry Index dropped 56% YoY due to weakening dry bulk demand. The Baltic Dirty Tanker Index increased 154% YoY due to geopolitical issues.

Expectation for February

Fitch Ratings expects throughput to worsen in January and February due to the rising COVID-19 infections and seasonal effects of the Chinese New Year. However, it is expected to ease in late February with China's reopening, though weak consumer sentiment and soft external demand may persist.