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China's total cargo throughput increases by 3% YoY in Q4 2022: Fitch

Published: 2023-02-13

China's total cargo throughput increased by 3 per cent year-on-year in the fourth quarter (Q4) of 2022, according to Fitch Ratings’ ‘China Ports Watch–4Q22’ report. The country’s foreign trade cargo in Q4 of 2022 declined by 1 per cent at eight major coastal ports compared to the previous year, primarily due to continued weakening overseas demand.

Total container throughput increased 7 per cent YoY in Q4 of 2022, driven by newly opened shipping routes and sea-rail transportation routes along with Regional Comprehensive Economic Partnership Agreement, which took effect in January 2022.

Export value declined 7 per cent YoY for the first time since Q1 of 2020, mainly due to high inflation and slowing economies in overseas markets. The manufacturing purchasing managers’ index (PMI) contracted in US and Japan since November, falling below 50, while the eurozone's manufacturing PMI decreased further to 47 in Q4 of 2022 from 49 in Q3 of 2022, implying contractions for the global major markets, as per Fitch Ratings’ report.

Shipping rates were highly volatile, given the inflationary environment and geopolitical issues. The Shanghai Containerised Freight Index/China Containerised Freight Index decreased 71 per cent/51 per cent YoY in Q4 of 2022, driven by lower shipping rates for routes from Shanghai to US and Europe. Meanwhile, the Baltic Dry Index dropped 56 per cent YoY in the fourth quarter of 2022 due to weakening dry bulk demand. The Baltic Dirty Tanker Index increased 154 per cent YoY amid geopolitical issues that result in European countries paying higher shipping rates for longer routes.

Fitch Ratings expects throughput to worsen in January and February—given the rising number of COVID-19 infections and seasonal effects of Chinese New Year—then ease in late February, benefitting from China’s reopening. However, downsides are likely to persist, including weak consumer sentiment and soft external demand resulting from high inflation and geopolitical issues.

Fibre2Fashion News Desk (DP)