Uncertain trade picture impacting port throughput
Hutchison Port Holdings Trust issued its financial results for the first half of 2018, showing a decline in throughout in the ports operate by the company.
HPH Trust, headquartered in Singapore, owns interests in Hongkong International Terminals (HIT), Yantian International Container Terminals (YICT), and Huizhou International Container Terminals (HICT, an affilated company of Yantian). HPH Trust also has 50% interest in COSCO-HIT Terminals in Hong Kong and a 40-percent interest in Asia Container Terminals (ACT) in Kwai Tsing Port.
The report indicated that year-to-date June 2018 throughput of HPH Trust’s ports was one percent below last year. YICT’s throughput was two percent above last year, but the combined throughput of HIT, COSCO-HIT, and ACT was three percent below last year
Outbound cargoes to the United States continued to grow in the second quarter of 2018, by three percent, but outbound cargoes to the European Union declined three percent compared to last year.
YICT’s throughput growth in the first six months of 2018 was mainly attributed to growth in the US and transshipment cargoes, but was partially offset by the decrease in empty cargoes. The drop in HPHT Kwai Tsing’s throughput was mainly due to reduction in transshipment cargoes
“The prospects for global trade for 2018 face an almost unprecedented level of uncertainty,” the report noted, “particularly in consequence of increasing trade tensions and disputes between the United States and both China and the European Union. The level of uncertainty in political and economic relations as it pertains to trade has increased significantly over the course of the year to date and shows little sign of abating.”
The company noted that it cannot readily quantify the impact of dispute-related trade measures, especially those between the US and China, on the performance of HPH Trust for the remainder
of the year “given the level of uncertainty that currently prevails as to both the specific nature, extent, and timing of such measures and the consequent precise impact they may have on local and global trade flows…”
HPH expects the consolidation trend within the shipping industry and the deployment of mega vessels intended to promote fleet and capacity optimization and cost efficiencies to continue.
The company therefore “remains both vigilant and cautious about expected cargo volume for 2018, particularly in the light of the trade and geopolitical tensions referred to above and will continue to adhere to strict financial discipline.”
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