China: the price of shipping containers from Shanghai collapses. Foreign trade is in short supply
There is an indicator that immediately measures the Chinese import-export situation, and it does so in a precise and unambiguous way. This is the Shanghai Containeraized Freight Index , a price index linked to the cost of shipments from the port of Shanghai, the main southern Chinese commercial port.
The index weighs shipping costs to various global destinations, according to their weight on Chinese maritime trade. This is how the different arrival ports are evaluated in the index:
Let's see how important the weight of Europe is in the index, as a Nordic port (usually Rotterdam or Hanover) or as a Mediterranean port. Europe, as a whole, counts much more than the USA, both on the East Coast and on the West Coast. Russia is missing, to which goods travel by train.
Here is the trend of the price index in 2022-23
The price of container shipping collapsed during 2022 to a quarter of what it was on January 1, 2022, from 4,000 to 1,000.
Transport prices are, especially in the short term, extremely sensitive to supply and demand: port structures, ships, containers themselves cannot be increased or decreased overnight, their variation takes time. Therefore, in the short term, within a few months, what varies, and strongly, is the price, given that shippers are willing to accept almost any price, in order to reduce structural costs.
This is what happened in 2022-23: demand evidently collapsed and prices followed. All consumer goods, and a large part of intermediate goods and raw materials travel by container, so if transport prices have fallen, it means that there is no trade either for or from China, and above all towards Europe. A bad sign.
We know that trade with Russia has increased, but this does not travel by ship, but by train, so it does not affect this index. The Chinese economic situation is worse than the indicators tell us, but we are the ones who are sinking it. Europe is also doing much worse than official statistics tell us.
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The article China: the price of shipping containers from Shanghai collapses. The lack of foreign trade comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/cina-crolla-il-prezzo-di-spedizione-dei-container-da-shanghai-il-commercio-estero-latita/ on Fri, 14 Jul 2023 09:00:28 +0000.