China ports face massive overcapacity

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

28 Feb 2009

China's container ports are facing overcapacity of tens of millions of TEUs within a couple of years as traffic plunges and new terminals come on stream. With demand falling "dramatically" since the last quarter of 2008, Chinese ports excluding Hong Kong likely will handle around 115 million TEUs in 2009, down from 126 million TEUs a year earlier, according to a joint report by AXS-Alphaliner and Liner Research Services.
Total container capacity is expected to hit 170 million TEUs by the end of 2010, and excess capacity at terminals has become a "real concern", AXS-Alphaliner, a Paris-based consultancy, says.
The demand gap is as high as 114 percent and 100 percent respectively at the northeastern ports of Xiamen and Dalian, according to the China Container Ports Review 2009.
All main ports in China have capacity expansion projects in place and many of these new terminals will be negatively impacted due to volume reductions and tariff erosion expected over the next two years.
Throughput at China's main box hubs in January fell 13.9 percent from a year ago to 8.99 million TEUs from 10.24 million TEUs. Hong Kong's traffic dropped 23.2 percent to 1.62 million TEUs in January.
Guangzhou suffered the biggest decline, with January traffic off 30.9 percent to 680,000 TEUs, while Shanghai fell 17 percent to 1.95 million TEUs.
Taken together, the three main Pearl River Delta ports of Hong Kong, Shenzhen and Guangzhou saw container volumes drop by 22.6 percent, or 1.13 million TEUs.
Singapore retained its position as the world's busiest container port in January with 1.97 million TEUs, a decrease of 19.6 percent from January, 2008.
But if current trends continue, Shanghai would overtake Singapore this year, albeit on lower overall volumes at both ports, according to AXS-Alphaliner.

Source: Traffic World