In its latest report, "China Container Ports Review 2009", the excess supply of terminal capacity in China's container ports is estimated to reach 35million TEU by 2010. Of the top 12 container ports, the potential over-capacity is expected to be most severe in Xiamen and Dalian where total capacity in 2010 is 114% and 100% respectively of the demand in 2008.
According to the report, "Both the Bohai Rim and the Pearl River Delta/Southeast coastal region could see a significant overcapacity challenge in 2010 as the excess capacity projected is three times more than the actual growth seen in the 2000-2008 period. With growth slowing considerably for 2009, it is unlikely that demand would grow sufficiently to absorb the excess capacity within the next two years."
The report also analyses the impact it would have on the main port operators in China. The Top 10 operators control about 58% of the total throughput in the country. The four largest operators - Hutchison Port Holdings, Shanghai International Port Group, China Merchants Holdings International and COSCO Pacific - have significant exposure to the falling demand across all regions. The reduced volumes and tariff erosion would have an adverse impact on the operators, with many terminals facing the prospect of negative growth.
Despite the negative assessment, port expansion projects continue across the country. The report examines the existing and future capacity at all the major container ports in China. Except for Hong Kong, where the CT10 terminal project has been postponed, all the major ports in China have expansion plans in place. Based on the latest volume trends, the report suggests that "the global rankings (of container ports) could finally change in 2009 if current volume trends continue, albeit on an overall declining total". Shanghai is expected to overtake Singapore and Shenzhen to overtake Hong Kong to become the No.1 and No.3 largest container ports this year.
