Are China’s Ports at a Turning Point?

China’s ports could be set to hit a ‘turning point’ in 2016, amid reports of a potential swing from profits to losses in times of more severe port overcapacity, according to Shanghai Daily.

An annual forecast released by the centre of the top 20 container ports globally found that negative growth is expected in areas such as Dalian and Hong Kong. It was found that overcapacity is a big risk for ports globally, and although China and Southeast Asia are set for huge growth by 2030, there is concern that planned capacity will outpace demand. The annual growth at China’s mega ports is set to grow 6% until 2030, which is also set to reach over six billion tonnes by 2030. PTI previously found that capital expenditure costs and operational expenditure costs are increasing for terminals, with demand relatively static.

Drewry argue that the new nature of demand is for less fragmented terminal capacity (fewer, bigger terminals needed in each port). This will require consolidation of terminals, both physically and in terms of ownership.