China Rising Bucks
IATA Reporting
IATA may have joined the
soirée late, but it arrived eventually. After months of bearish
forecasts, the venerable association changed its tune at the start of
July, finally recognizing that the slow start to the year for Chinese
exports had quickly metamorphosed into accelerating growth.
IATA recorded global air cargo growth of
4.7 percent year-on-year in May, up from 3.8 percent in April. “There
are indications that world trade and business confidence [is] improving
after weakness in the first quarter,” said IATA. “In particular,
Chinese manufacturing activity rebounded in May, with a corresponding
rise in export order growth.”
The latest figures out of China suggest
more of the same ahead. Exports in June rose 7.2 percent year-on-year
to US$186.8 billion, according to the General Administration of Customs.
HSBC now expects export growth to pick up in pace in the second half of
the year on the back of improving European and U.S. demand, although it
noted that high labor costs were still a concern for many exporters. “Some
have responded by moving into mid-western provinces,” said the analyst.
“As a result, combined exports from the 18 provinces in mid-western
China improved 17.5 percent, outpacing the national average.”
 Shanghai
Pudong’s performance is a key indicator as a bellwether for China,
and figures from the hub suggest air cargo growth is outstripping headline
export expansion rates. Lead handler PACTL saw volumes surge 12.36 percent
year-on-year in June when it handled 121,178 tons. Indeed, freight volumes
at PACTL were up 13.78 percent to a record 687,276 tons in the first half
of 2014.
“In addition to the ongoing growth
in domestic imports, we saw strong double-digit growth in our international
business throughout the first half of 2014,” said Lutz Grzegorz,
vice president of PACTL. “The volume of international exports in
particular continues to grow significantly. We are confident [about] setting
a new record by the end of this year and reaching a figure of 1.4 million
tons of air cargo for the very first time.”
Hong Kong, the other key gateway for Chinese
trade, has also seen robust growth in volumes in recent months. Lead operator
Hong Kong Air Cargo Terminals (Hactl) racked up an 11.5 percent expansion
of tonnage last month as imports increased 13.6 percent year-on-year and
exports grew 8.8 percent.
Cathay Pacific Airways volume figures were
also indicative of the robustness of the sector. Cathay Pacific and Dragonair
carried 140,444 tons of cargo and mail in June, an increase of 15.0 percent
compared to a year earlier.
Mark Sutch, GM Cargo Sales & Marketing,
said the upswing in demand seen in May had continued through June with
a surge in demand towards the end of the month as shippers rushed to meet
month and quarter-end deadlines. “Demand remained robust out of
Hong Kong and Mainland China, particularly on the transpacific lanes,”
he added. “Shipments of perishable items continued to boost load
factors out of North America back into Asia, while Europe benefitted from
higher yield shipments of specialized products.”
But although freight growth has been impressive,
the supply-demand balance may take more time to steady. HSBC’s latest
Asian transport report said Asian airline cargo yields were now stabilizing
on the back of improving demand, although overcapacity due to additional
belly space was limiting the recovery. “The positive is that yields
appear to be no longer falling,” said HSBC. “In addition,
various spot indices we track have started to pick up. But there continues
to be divergence by route. Trans-Pacific and intra-Asia appear to be better
than Asia-EU as the latter has been exposed to far more belly capacity
from passenger jets.”
Sky King |
