Negative growth at Kwai Tsing raises saturation fears
Hong Kong's Kwai Tsing Container Terminals is set to register its first negative growth in November, raising fears the Pearl River Delta - which is expected to double its port capacity to 73 berths by 2010 - has reached saturation point.
Kwai Tsing terminals, comprising Kwai Chung and CT9 ports, moved 4 per cent fewer containers last month than a year earlier, according to industry analysts.
This and a slowdown in Shenzhen have raised doubts among some operators that Hong Kong port operators will see a return on a multibillion-dollar investment.
For the first 10 months of the year, cumulative growth of Hong Kong ports was 1.7 per cent year on year, with Kwai Tsing terminals increasing 8 per cent.
Analysts said Hong Kong International Terminals (HIT) and Cosco-HIT terminals were the worst performers last month with throughput declining by high single digits.
Management at the two companies declined to give figures for throughput in November.
'The negative throughput growth in November may not have dragged cumulative growth into negative territory but it is a sufficiently negative catalyst for container terminal operators with heavy exposure to Hong Kong,' said Geoffrey Cheng, transport analyst at Daiwa Institute of Research HK.
Even Shenzhen has not escaped the slump, with its ports poised to record the lowest growth rates of the year in November. Throughput was up just 13.7 per cent compared with 41 per cent in January and 19 per cent in November last year.
Exporters have blamed the slower growth on the need for United States retailers to de-stock.
'They are overstocked in the US and retailers are having to make substantial price cuts, leaving them more conscious about placing new orders,' said Sunny Ho Lap-kee, executive director of the Hong Kong Shippers' Council.
But he was not concerned about the slowdown. 'Last year's peak season was extended to November due to port congestion at US ports which made the base abnormally high,' he said.
November is normally a low season for port throughput.
With expansion deals already signed, Citigroup estimates the region will have 73 berths by 2010, double the current number.
