[081210.EN.SEA] Softened Asia-Europe and Transatlantic Trades Sees a Slowdown In Global Trade

EUROPEAN container volumes continued to weaken in the third quarter after reaching the pinnacle in the first half of the year, but overall third-quarter trade remained higher than the same period 2009. The latest Container Trade Statistics (CTS) figures showed that imports from Asia declined 10 per cent in September compared to August. Exports from Europe were up, except to Asia where they dropped 7.2 per cent year on year and showed five straight months of shrinkage. In September, European exports to Asia were 0.5 per cent down from August and 14 per cent down on the March high, said the CTS report. "We should note, however, that third-quarter exports of 1.342 million TEU were 1.4 per cent higher than the 1.324 million TEU carried in 2008. The monthly rate of growth in third quarter imports from Asia continued to decline year on year, but third quarter 2010 as a whole was a significant 14.5 per cent increase on the third quarter of 2009," cited the report. Since carriers had added 10 per cent more capacity in preparation for the peak season in the third quarter, freight rates were pushed down, reported London's Containerisation International. Rates carried on a downward trend for the westbound Asia-Europe trade in September. The CTS price index, which uses the average rate for 2008 as a base figure of 100, declined 5 points in September to 107. The eastbound price index also fell 5 points to 114. Likewise, the China Containerised Freight Index issued by Shanghai Shipping Exchange (SSE) showed that the index as of October 29 remained unchanged at 1,133.96 points compared to the previous week, while the Shanghai Containerised Freight Index reported a 1.4 decrease from the previous week to 1,259.11 points. The SSE's figures indicated that the freight rate was quoted between US$1,500 and $1,550 per TEU on Europe service in the week ended October 29 with a freight index of 1,622.88 points, down 0.4 per cent from the previous week. In the week ending November 5, the average all-in spot rate from Shanghai to Europe dropped to $1,510 per TEU from $1,870 per TEU at the end of June. For container volumes, the growth for export from Asia to Europe also showed signs of continuous weakening in September. Although the latest CTS figures showed that containerised exports from Asia in September rose 5.69 per cent year on year at 1.1 million TEU, this was less than the 16.13 per cent growth the Asia-Europe trade volume recorded in August. Also, the average trade volume in the third quarter was up 14.6 per cent year on year, but down 9.54 points from the average 24.14 per cent growth in the second quarter. Total cargo growth for Asia to North Europe, west and east Mediterranean regions during the peak season in the third quarter was up 3.9 per cent compared to the previous quarter with the west Mediterranean being the worst performer. A breakdown of the recorded cargo flow from Asia to North Europe in the third quarter amounted to 2,359,612 TEU, an increase of 6.6 per cent compared to the previous quarter. Asia to the West Mediterranean, including North Africa, amounted to 648,665 TEU, down 4.8 per cent quarter to quarter. Asia to the East Mediterranean, including the Black Sea amounted to 558,408 TEU in the third quarter, up 3.5 per cent. According to the Shanghai Containerised Freight Index, freight rates as of November 5 to the Western Mediterranean were $1,469 per TEU, down $43 from $1,512 the previous week. For other regions, exports from Europe to India and the Middle East in September were five per cent down against August and 11 per cent lower than the highest point in March despite the third quarter is still one per cent up year on year. Imports to Europe from North America fell two per cent compared to August and were down 10.5 per cent compared to the highest point in March. Year-on-year growth remained positive, but dropped to six per cent. For North America, CTS imports index for September rose one point to 108 and exports index was also up one point to 84. Previously, the US-Euro container trade deficit was widened more than 66 per cent from the first to the second quarter because of a drastic 15 per cent contraction in the value of Euro value since October 2009, said a PIERS report. This deficit, equivalent to 100,962 TEU, is the largest container trade deficit with the Euro zone since the third quarter 2009. Citing statistics from PIERS, trade with five European countries accounted for more than 85 per cent of the total US-Euro container trade. During the first half of 2010, Germany was the top US trading partner in the Euro zone with a volume of 343,435 TEU, followed by Belgium at 249,528 TEU, Italy at 233,416 TEU, the Netherlands at 209,492 TEU and France at 115,115 TEU. For European imports to the US, Germany was again on top at 209,566 TEU, followed by Italy at 146,074 TEU, the Netherlands at 109,100 TEU, Belgium at 97,392 TEU and France at 73,988 TEU. Exports from Europe to South and Central America were down five per cent in September over August and 10.5 per cent over the March zenith. But year-on-year, growth increased 51 per cent. The CTS index for exports from Europe to South and Central America reached a peak of 95 in September, while imports remained stable at 87. In short, European imports and exports experienced a fall in September in all seven trades monitored by the CTS. In particular, the decrease of its Asian trade took a dramatic double-digit dip in September, indicating a sign of continuous decline beginning April. Winter has commenced and it is well confirmed that there is a slowdown in global trade. Focus is now shifted to how the world economy performs going into next year and how the market will be affected.

Source : CSM, 15.11 10.