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Drewry revises upwards his estimates in the traffic between Asia and the Mediterranean.
The analyst company now places growth at 5.6% for this year.
Revised data from Container Trade Statistics paints a far rosier picture for the westbound Asia to Mediterranean trade than outlined in our previous analysis of the trade. Headhaul traffic in the first quarter 2017 was revised upwards so that it now shows growth of 5.6%, up from the original 3.0% assessment. New CTS data for April and May shows the growth story has got even better with year-to-date volumes up by 6.9% to 2.3 million teu.
Exports out of Asia have been evenly distributed so far this year to the Western and Eastern regions of the Mediterranean, with the latter shading it by a mere 30,000 teu. The growth rates to the two regions were more distinct with the East Med taking the spoils again with a rise of 8.9% after five months, versus 4.9% to the West Med.
Predicting traffic flows into the Mediterranean is complicated by the mixed political and economic undercurrents that exist in the region. There are developed economies such as Spain that of late have thrown off the shackles of recession with a vengeance, while other countries, such as Italy and Greece, have struggled to get back to where they were at the start of the decade in terms of consumer demand – and continue to struggle. In smaller Med container markets there has been strong growth in places such as Slovenia and the Ukraine, offset by volumes into strife-torn territories such as Syria and Libya that have simply disappeared into a black hole.
Our most recent forecast for the westbound Asia-Med trade in 2017 of 3.2% was made before the recent statistical revision by CTS and will probably require an upgrade to take into account the higher numbers.
Carriers have slightly reduced the available capacity on the Asia-Mediterranean route since the April start of the new alliances, primarily through void sailings, of which there were three in May and two in June. For July and August capacity will again be trimmed slightly and will be down by approximately 1% on the same months one year ago.
Further ahead, Drewry estimates that 10 ships in the range of 5,000-9,000 teu will be phased out to other trades, after cascading in of six 14,000 teu ships and four 8,000 teu ships from Asia-North Europe by the start of the fourth quarter. As a result, we expect net capacity on the Asia-Mediterranean route to increase by around 1% westbound in the fourth quarter over the third, which might reduce load factors and freight rates in the traditionally slower quarter.
With carriers able to sustain westbound load factors on or around 90% from March through May, spot freight rates have trended upwards, barring some of the usual weekly fluctuations. Drewry’s World Container Index last week reported Shanghai to Genoa at $1,780 per 40ft container, still down on the early-January peak of $2,150/40ft but broadly the same as at the same stage last year.
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