 "China's slower growth hurts global shipping sector: Fitch")
China's slower growth and economic transition will pose significant risks for the already struggling shipping sector, rating agency Fitch has cautioned.
"Weaker data on exports and manufacturing in China and its economic transition increase uncertainty for container shipping," a Fitch report said yesterday.
China is a key player in global trade, accounting for two-thirds of world iron ore imports, 20 per cent of coal imports and 16 per cent of oil imports.
China's slowing growth will therefore significantly cut demand for shipping services, while oversupply is rife in nearly all shipping segments, state-run Xinhua news agency quoted Fitch report as saying.
The rating firm expected global container demand growth to moderate to between 2 and 4 per cent this year, compared to its previous forecast of 4 to 5 per cent.
Oversupply in the sector sinks shipping prices.
The year-to-date average of the China (Export) Containerised Freight Index, a measure of freight prices, is down 16 per cent year on year.
"These pressures will probably lead to bankruptcies among smaller shippers and may drive consolidation," said Fitch.
