March 3, 2010, 7.45 pm (Singapore time)
China port grows, recovery to take time
BEIJING - China's trade is recovering but has some time to go before it returns to pre-crisis levels, said the head of China's second-largest foreign trade port, Qingdao Port Group, which is a bellwether for trade and iron ore demand.
Qingdao Port's total throughput was up 9 per cent in January and February from a year earlier, while container throughput was up 6 per cent, chairman Chang Dechuan said in an interview in Beijing on Wednesday ahead of the National People's Congress annual meeting this week.
'We're pretty pleased with this pace of growth, because it wasn't easy. We're also pleased with the container rate, which is a real indicator of national trade,' said Mr Chang, a Qingdao native who has spent his whole life working at the port.
'This year is a pretty complicated year, so I caution against too much optimism. At the moment, the first quarter is looking ideal, and the second quarter is also pretty good. But we really can't tell how the second half will play out.'
Qingdao Port is China's largest port for crude oil and iron ore. Mr Chang said imports of both are up by more than 10 per cent from a year ago, indicating robust domestic demand.
'Iron ore stocks at the port aren't too high, it's not like the last few years,' he said, estimating port stocks at about 10 million tonnes, down from a peak of 16 million, thanks to strong production at steel mills.
'This shows that steel mills' demand is up and steel market demand is up, knocking down the amount of ore piling up at ports. The steel industry is doing pretty well.'
The port is investing more than three billion yuan (US$439.5 million) to expand iron ore capacity by 20 million tonnes, bringing total annual capacity to 100 million tonnes this year, Mr Chang said.
'We don't have enough capacity for all the iron ore we're bringing in. The berth can handle 200,000 tonnes, and is running at 93 per cent capacity, which basically means it never stops.'
Some years to recover
Although the ports sector is doing better this year than last, volumes still haven't returned to 2007 or 2008 levels, Mr Chang said.
The port's throughput rose by 5.6 per cent in 2009, while container throughput rose by 2.4 per cent to reach 10.27 million twenty-foot equivalent units. Qingdao Port is now the ninth largest container port in the world.
Chinese officials have indicated they want to see a sustained recovery in exports before making changes, including allowing appreciation of the currency, that trade partners say are necessary to help rebalance the global economy.
'It's not too likely we'll return to 2007-2008 levels. We still need some time, although I can't say how many years,' Mr Chang said, adding that it had taken the Chinese economy three years or more to recover from the financial crisis of the late 1990s.
'Commodity imports are recovering quickly, while container trade is slower. This shows the impact of the global economy.'
China invested heavily in port infrastructure during the last decade, to relieve bottlenecks that were impeding imports of commodities and oil needed to drive the economy, and to make industrial exports more competitive by lowering transport costs.
In the near-term, that type of investment will make way for consolidation, Mr Chang said, although he said the number of outside partners in Shandong's three major ports makes it unlikely they would be merged.
The financial crisis froze Qingdao Port Group's stock market listing plans.
China Merchants Holdings (International) in December agreed to form a US$911 million joint venture with Qingdao's Qianwan container arm, to manage nine berths. Partners include Cosco Pacific, AP Moller Mearsk, DP World, and Pan Asian Shipping.
'We won't see the massive investments of the past few years in container ports, that will have to moderate,' Mr Chang said.
'On the other hand, there's still demand for port capacity for bulk products, for instance iron ore, crude oil, commodities. So we'll see more investment in this direction. The need for specialised bulk ports is still very large.' -- REUTERS
China port grows, recovery to take time
BEIJING - China's trade is recovering but has some time to go before it returns to pre-crisis levels, said the head of China's second-largest foreign trade port, Qingdao Port Group, which is a bellwether for trade and iron ore demand.
Qingdao Port's total throughput was up 9 per cent in January and February from a year earlier, while container throughput was up 6 per cent, chairman Chang Dechuan said in an interview in Beijing on Wednesday ahead of the National People's Congress annual meeting this week.
'We're pretty pleased with this pace of growth, because it wasn't easy. We're also pleased with the container rate, which is a real indicator of national trade,' said Mr Chang, a Qingdao native who has spent his whole life working at the port.
'This year is a pretty complicated year, so I caution against too much optimism. At the moment, the first quarter is looking ideal, and the second quarter is also pretty good. But we really can't tell how the second half will play out.'
Qingdao Port is China's largest port for crude oil and iron ore. Mr Chang said imports of both are up by more than 10 per cent from a year ago, indicating robust domestic demand.
'Iron ore stocks at the port aren't too high, it's not like the last few years,' he said, estimating port stocks at about 10 million tonnes, down from a peak of 16 million, thanks to strong production at steel mills.
'This shows that steel mills' demand is up and steel market demand is up, knocking down the amount of ore piling up at ports. The steel industry is doing pretty well.'
The port is investing more than three billion yuan (US$439.5 million) to expand iron ore capacity by 20 million tonnes, bringing total annual capacity to 100 million tonnes this year, Mr Chang said.
'We don't have enough capacity for all the iron ore we're bringing in. The berth can handle 200,000 tonnes, and is running at 93 per cent capacity, which basically means it never stops.'
Some years to recover
Although the ports sector is doing better this year than last, volumes still haven't returned to 2007 or 2008 levels, Mr Chang said.
The port's throughput rose by 5.6 per cent in 2009, while container throughput rose by 2.4 per cent to reach 10.27 million twenty-foot equivalent units. Qingdao Port is now the ninth largest container port in the world.
Chinese officials have indicated they want to see a sustained recovery in exports before making changes, including allowing appreciation of the currency, that trade partners say are necessary to help rebalance the global economy.
'It's not too likely we'll return to 2007-2008 levels. We still need some time, although I can't say how many years,' Mr Chang said, adding that it had taken the Chinese economy three years or more to recover from the financial crisis of the late 1990s.
'Commodity imports are recovering quickly, while container trade is slower. This shows the impact of the global economy.'
China invested heavily in port infrastructure during the last decade, to relieve bottlenecks that were impeding imports of commodities and oil needed to drive the economy, and to make industrial exports more competitive by lowering transport costs.
In the near-term, that type of investment will make way for consolidation, Mr Chang said, although he said the number of outside partners in Shandong's three major ports makes it unlikely they would be merged.
The financial crisis froze Qingdao Port Group's stock market listing plans.
China Merchants Holdings (International) in December agreed to form a US$911 million joint venture with Qingdao's Qianwan container arm, to manage nine berths. Partners include Cosco Pacific, AP Moller Mearsk, DP World, and Pan Asian Shipping.
'We won't see the massive investments of the past few years in container ports, that will have to moderate,' Mr Chang said.
'On the other hand, there's still demand for port capacity for bulk products, for instance iron ore, crude oil, commodities. So we'll see more investment in this direction. The need for specialised bulk ports is still very large.' -- REUTERS