Shanghai port hit by falling container volumes

Container throughput in Shanghai, the world's busiest port, fell 5.7 per cent last month from May, because of the weak global economy and the decline in mainland manufacturing, analysts said.

In Hong Kong, which has slipped to the world's fourth-busiest container port, behind Shenzhen, container throughput fell 9.1 per cent in the year's first five months from the same period last year - the worst performance since its 14.1 per cent drop in 2009 during the global financial crisis, the Hong Kong Port Development Council said.

Shanghai's container throughput was 2.77 million twenty-foot equivalent units (teu) last month, a year-on-year decrease of 0.06 per cent, according to the website of Shanghai International Port (Group), operator of the city's ports. It was a pullback from container throughput growth in March, April and May, which was in single-digit percentage rates.

"Trade is likely to continue to stay slow, as reflected in the sharply deteriorating New Export Order Index [a component of China's purchasing managers' index], which usually leads container volume by one to three months," said Jefferies analyst Liu Boyong.

Shanghai's weak performance was partly because demand in the United States and Europe was still weak, Liu said.

"The second reason is volume growth is slowing for the longer term. With China's rising labour cost, the outsourcing trend is ending. So it would be normal if in future China's export growth were to be more in line with developed countries like the US, in the low single digits," he said.