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Slowdown in China

World Cement,

Cement output totalled approximately 161.39 million t in China in March 2015, according to the National Bureau of Statistics. This is 20.5% lower than in March 2014. Industrial production increased by just 5.6% y/y during the month. Meanwhile, preliminary estimates put GDP growth at 7% y/y in 1Q15, or 1.3% q/q.

Peter Sand, Chief Shipping Analyst at BIMCO, commented on what this slowdown means for the shipping industry: “The transition of the Chinese economy is affecting the shipping industry a lot. During the past decades of strong economic development, Chinese foreign trade has been growing tremendously. Dry bulk in particular has benefitted and crude oil tankers too on the imports side. While container shipping on intra-Asian routes and westbound trades has benefitted from massive exports of manufactured goods”.

“What we have seen in shipping in recent years and is going to experience more in future is the knock-on effect from China becoming a relatively more closed economy, driven forward by domestic demand rather the foreign demand like i.e. the US. In short, this translates into a lower level of shipping demand going forward than what we got accustomed to during the past decades”

“BIMCO often mentions that the future holds a ‘New Normal’ of shipping demand, one where slightly less trade is generated from global economic growth, as compared to previously, as the composition of the global GDP is changing. What we see from China today is evidence of just that.”

Edited from various sources by

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