Tag Archives: UAE

container ship at abu dhabi ports

2015 Will See an Increase in Demand For Shipping Containers

A recent research study conducted by Barclays suggests that the recent drop in oil prices is boosting consumer spending, and in turn increasing the United States’ demand for Chinese imports. Based on the positive data presented in their report, the investment bank has increased its container volume growth forecast (for the U.S. market) by nearly 1 percent, raising it to 5.4 percent for 2015. From a global perspective, world container trade reached an estimated 152 million TEU in 2014, and is forecast to grow 6.5 percent over the next two years.

A Barclays research study suggests that the recent drop in oil prices is increasing U.S demand for Chinese imports Click To Tweet

Brent crude oil prices averaged $110 per barrel From January 2014 through September 2014, and then values very quickly plummeted to approximately $40 per barrel. Looking ahead throughout 2015, Barclays predicts that oil will maintain an average price of $44 per barrel. This is likely to translate into bigger profits for leading container shipping lines, especially those who have invested in Triple E vessels.

For every $10 drop in the per barrel price of oil there will be $1.1 billion in consumer spending on Chinese exports Click To Tweet

According to theBarklay’s sensitivity analysis, this improvement suggests a [potential] increase in China’s exports to the United States of nearly 2 percent. Offering a number-figure for the growth, industry analysts forecast that for every $10 decline in the (per barrel) price of oil, there will be an additional $1.1 billion in consumer spending on Chinese exports.

We expect a potential positive impact of lower oil prices on trade volumes due to higher discretionary consumer income. For example, the Barclays U.S. Equities Research team estimates that a 20 percent decline in fuel prices could increase U.S. consumption by $70 billion.- Barclays

Barclays recognizes that lower oil prices are having a positive impact on consumer demand and the global container shipping industry is experiencing a boost in profitability. Barclays’ analysts say they expect the economic prosperity and investment in global trade to continue into 2016 and throughout 2017, resulting in a 5.2 percent year-over-year improvement in container demand.

Barclays' analysts are forecasting a 5.2 percent year-over-year increase in worldwide demand for shipping containers. Click To Tweet

Trade to the United States is not the only international destination to increase their demand for Chinese goods. Trade between China and Iran (for example) has been growing at a rate of nearly 40 percent per year since 2012, driven by rapidly rising demand from consumers. The import of household goods from Asia, mainly into Iran and UAE, has caused container volumes on Asia to Middle East and Asia to the Indian subcontinent trade routes, to experience a significant increase. According to analysts, this upward trend in the demand for shipping containers will continue at a rate of 7.4 percent over the next three years, and easily outperform Barclays’ global container growth forecast of 5.2 percent.

khalifa shipping port

1 Million Cargo Containers Expected at Khalifa Port in 2013

khalifa shipping portLess than a year after opening for business, the Khalifa Port is preparing to take delivery of a second batch of automated cranes, to help meet the rising demands of their international shipping clients. Widely renowned as the first fully-automated dockyard in the region, the Taweelah-based deep-water terminal has taken over from the aging Port Zayed, as the Emirate’s primary maritime trade terminal.

When comparing the two United Arab Emirates shipping ports, Khalifa port is much larger than Port Zayed, which after more than four decades of service has nearly reached its annual capacity of 800,000 shipping containers. Although Port Khalifa was originally designed with an initial capacity of 2.5 million shipping containers per year, this traffic figure could easily increase to 15 million, by 2030. Already well on their way to reaching this goal, Abu Dhabi Ports Company expects to handle more than one million containers in 2013.

We are looking to grow 20 to 30 per cent this year against a backdrop of 3 to 4 per cent growth in the global industry,“- The Chief Executive of Abu Dhabi Ports Company.

As officials at Khalifa port continue to open the gateway for international trade and investment, the ADPC is counting on a steady stream of business and revenues from tenants in the Khalifa Industrial Zone Abu Dhabi (Kizad), which conveniently encircles the busy shipping port; to continue to fund development of the facilities. It has been estimated that the companies that have already purchased land in the Kizad thus far, will be shipping approximately 240,000 containers a year, once they have completely established operations in the industrial zone.