Top US importers stocked up heavily on Chinese goods in the fourth quarter of last year before new import tariffs — part of an ongoing US-China trade dispute — would take effect, the head of shipping giant A.P. Moller-Maersk said on Thursday.
“It was very clear that US imports from China rose significantly in the fourth quarter, while exports to China fell. So quite the opposite of what the US administration had wanted,” Maersk chief executive officer Soren Skou said in an interview.
Maersk is the world’s biggest container shipper with about 750 vessels.
Container shippers are currently in a peak season ahead of the Chinese Lunar New Year on Feb. 5, but the spike in volume at the end of last year will likely be followed by a slowdown after the current peak, Skou said.
“Container transport grew 4 percent in 2018, which is a bit more than growth in the global economy. So we can’t say we’ve seen any real negative impact from the row between the United States and China,” Skou said.
Maersk in November last year said that the trade tensions and their effects could reduce global container trade by between 0.5 and 2 percent this year and next year.
“For the trade war to have such an effect on global trade, there would need to be serious deterioration in the relationship between China and the United States,” he said.
Freight rates for dry-bulk and container ships, carriers of most of the world’s raw materials and finished goods, have plunged over the past six months in the latest sign that the global economy is slowing significantly.
The Baltic Dry Index, a measure of ship transport costs for materials like iron ore and coal, has fallen 47 percent since the middle of last year. Dry-bulk commodities are taken as a leading economic indicator, because they are used in core industrial sectors like steelmaking and power generation.
Analysts say the recent declines in activity point to a serious economic slowdown.
“Signs that the US and China remain well apart in trade talks continued to weigh on sentiment in commodity markets,” Australia & New Zealand Banking Group Ltd said in a note on Friday.
The Harpex Shipping Index, which tracks container rates, has dropped by 30 percent since June last year. As a measure of the demand for shipping manufactured goods from producers to consumers, container rates are also seen as a leading economic indicator.
Their slump underscores weakening manufacturing data from Asia, Europe and North America.
“Slowing global economic growth, the unresolved US-China trade conflict, the US government shutdown and Brexit drama are all sources of uncertainty dragging at sentiment,” said Hussein Sayed, chief market strategist at futures brokerage FXTM.
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