In a sign of slowing global trade, the throughput of Shanghai, the world's busiest port, turned out to be weaker than expected in the first two months of this year.
Shanghai's container throughput rose 3.6 per cent to 4.8 million twenty foot equivalent units (teus) in January and February, while cargo throughput grew 7 per cent to 76.16 million tonnes, according to the website of Shanghai International Port Group, the port operator.
Cargo throughput for the whole of last year rose 13.1 per cent. While container throughput measures the traffic in finished goods, cargo throughput is a measure of raw materials passing through a port.
Given that Shanghai's container throughput enjoyed 7 per cent to 9 per cent year-on-year growth in the second, third and fourth quarters last year, a growth of 3.6 per cent falls short of expectations, said Nomura analyst Jim Wong.
Combining the data of January and February and eliminating the distorting effects of the Lunar New Year, Wong said: 'This year people are more cautious. They are delaying things all over the world. Factories in China stayed closed for a longer period.' Willy Lin Sun-mo, chairman of the Hong Kong Shippers' Council, said: 'At this moment, the forecast is it's going to be a very difficult season in the first six months of this year.'
He added: 'The overall sentiment is still weak. People still don't have much confidence in the market.
'The global economy is not very dynamic, and the Chinese government just lowered its GDP forecast to 7.5 per cent this year.
'Other than the iPad3 launch, the market is quiet. If Shanghai manages 3.5 per cent growth, it's already good.'
As an indicator of a weakening US economy, rail traffic in the US fell 5 per cent to 281.644 wagon loads in the week to February 25, according to American Association for Railroads data.
A recent report by Citic Securities' Simon Yeung said: 'In anticipation, the debt crisis in Europe will deteriorate, and global trade will continue to slow in the first quarter.'
For the whole of this year, Yeung forecast 8 per cent throughput growth of ports controlled by Cosco Pacific, a state-owned port and shipping conglomerate, due to high unemployment in developed countries, rising mainland production costs, and trade protectionism against China.
Cosco Pacific, listed in Hong Kong, has most of its port assets in China, including Shanghai and Shenzhen.
However, Nomura's Wong said, 'Most people are expecting stronger recovery in March.'
The evidence for this is the ability of shipping companies to increase freight rates for goods to the US and Europe, according to Wong.