Given that China is the largest shipping demand center (22% of global seaborne imports and 5% of exports in 2019), the impact of this year's epidemic on China's economy in the first quarter is relatively large (GDP in the first quarter decreased by 6.8% year-on-year). Although China's imports fell in the first quarter (down 7% to 647 MT) in the first quarter, they increased by 4% year-on-year, driven by coal, small bulk cargo and crude oil.
In the second quarter, thanks to economic stimulus measures, including infrastructure investment, good progress was made in returning to work. As a result of this progress, China's import volume has surged at a time when many other regions are facing great import pressure due to the new outbreak. Although China's GDP growth in the second quarter was lower than that before the outbreak (GDP in the second quarter only increased by 3.2% year-on-year), the volume of seaborne imports jumped 11% year-on-year, 14% year-on-year, reaching a record 722mt. June was a particularly strong month, with imports of 263mt, up 32% over the previous year.
Import volume of goods
These data reflect the strong import of oil and dry bulk, driven by a number of factors. Iron ore imports in the second quarter increased by 8% year-on-year, 19% to 278mt year-on-year, benefiting from accelerated steel production, improved supply from Australia and Brazil, and increased imports from other regions (iron ore imports broke the 110mt record in June).
Thanks to Brazil's record harvest, grain imports increased by 35% to 34mt in the second quarter compared with last year,. Oil imports also reached a new high. After the sharp drop in oil prices earlier this year, imports were strong. Imports in the second quarter were 128mt, up 15% year-on-year. Imports in July were also strong.
As a result, the growth rate of China's total maritime imports so far this year (10% year-on-year from January to July) is actually faster than that in 2019 (5%). However, the pressure on LP is obvious, with imports down 7% year-on-year, partly due to an increase in domestic output.
Container freight rate rises
At the time of the most severe impact of the epidemic, carriers reduced a lot of capacity, thus supporting freight rates. With the opening up of many countries, most of the voyages have been restored and additional ones have been added. Sindh maritime previously reported that "trump's magic operation, the import of goods from China by the United States is growing rapidly". It was mentioned that during the epidemic period, the application volume of Chinese commodity export customs increased by 208%, and the application volume in the United States Customs increased by 64%.
The composite index of the Shanghai container freight index (SCFI) jumped to its highest level since September 2012, reaching 1263.26 on August 28, up 54.4% from April 24, when the SCFI was at its lowest point this year. In fact, alphaliner estimates that the weekly capacity between Asia and North America in September may exceed 500000 TEUs for the first time in history.
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