HK may lose container port crown
Hong Kong is set to lose its title as world's busiest container port to Singapore this year and Shanghai and Shenzhen ports are steadily catching up, analysts said on Friday.
Hong Kong moved 21.93 million 20-foot equivalent units (TEUs) of goods last year, up 7.3 per cent from the year earlier as China's export growth remained strong, the Hong Kong Port Development Council estimated.
But Singapore, the world's second-busiest port, handled a record 21.3 million TEUs in 2004, up about 16 per cent due to booming regional trade, according to port operators.
"It is very possible that Singapore will surpass Hong Kong by volume as Hong Kong's throughput growth is seen slowing to about 2.3 per cent this year," said K.Y. Ng, a port analyst at Nomura International.
Singapore government-run PSA, the city state's main port operator, has said it plans to build 15 new berths over the next five to seven years to expand its annual handling capacity to 31 million TEUs from 20 million TEUs.
PSA moved 20.6 million TEUs of goods last year, up 14 per cent, while its rival Jurong Port more than doubled its throughput to 711,000 TEUs from 340,000 TEUs.
Despite what is often seen as a keen regional rivalry, Ng said Singapore and Hong Kong are not direct competitors.
Singapore focuses on the less-profitable transshipment business, where goods are moved from ship to ship before sailing to their final destination.
Hong Kong, capitalizing on its location on the doorstep of China's export engine, specializes in more-profitable direct shipments.
Analysts said the PSA has become more responsive on pricing since losing several key customers to neighbouring Malaysia a few years ago. In Hong Kong, many of the port operators also have significant investments in neighbouring mainland ports, making them less vulnerable to competitive pressures.
Hong Kong's listed port operators, including Hutchison Whampoa, Wharf (Holdings)'s Modern Terminal, China Merchants Holdings (International) and COSCO Pacific should have good earnings growth in their Hong Kong and mainland business in 2004, analysts said.
China's export growth is expected to slow to between 10 to 15 per cent this year from 32.7 per cent last year and that could slow container traffic growth in the region, Ng said.
China's robust exports underpinned buoyant container traffic on the mainland, Hong Kong, Singapore and other Pacific ports.
About one-third of mainland exports originate from the booming southern province of Guangdong, and are shipped mainly through Hong Kong and Shenzhen ports.
Hong Kong officials say there is plenty of mainland business to go around, but the territory has been steadily losing market share in the past few years to Shenzhen, where a 40-foot container is US$300 cheaper to process.
Last year, Shenzhen port for the first time moved more goods than Hong Kong's main container facilities at Kwai Chung. The city handled 13.66 million TEUs while Kwai Chung moved 13.43 million TEUs.
Shenzhen's growth rate was close to that of the mainland's busiest port Shanghai, which increased 29 per cent to 14.55 million TEUs. Shenzhen port forecast 10-14 per cent volume growth this year to 15-15.5 million TEUs.
"It is not surprising that Shenzhen will overtake Hong Kong - it's just a matter of time," said Peter So, an analyst at Macquarie Securities.
Hong Kong port operators have been stepping up investments in mainland ports to tap trade growth, a trend that is expected to continue.