South Korea-China container rates are bucking the global trend of upward freight movements, as falling exports from South Korea to China, are putting downward pressure on charges.
Statistics from the Yellow Sea Liners Committee, which covers trade between South Korea and China, show that South Korean exports to China were down 5% year-on-year in May, to 101,000TEU, the first such decline in five months, while feedered cargoes fell 17% year-on-year, to 20,200TEU.
The data also showed that the volume of South Korean shipments to China varied across Chinese ports. Shipments to Ningbo-Zhoushan fell 18% to 28,400TEU, while volumes to Dalian dipped by 1% to 19,200TEU.
On the other hand, shipments to Shanghai were up 3% to 80,000TEU, those to Tianjin increased by 8% to 40,700TEU, while volumes to Qingdao grew by 4% to 44,300TEU.
South Korean exports to China decreased by 9% year-on-year in December 2020 and until May 2021, recovered remarkably, showing double-digit growth except in February. Exports were up 28% in January, 2% in February, 16% in March, and 16% in April.
Reduced exports of petrochemical products were suggested as the likely cause of the lower exports from South Korea to China.
Petrochemical exports saw double-digit declines for the second month in a row in May, after growth in February and March.
In the meantime, Korea Customs figures showed that in May, 539,700 tonnes of petrochemical products were exported to China, down 33% from 805,900 tonnes in May 2020.
According to the Shanghai Shipping Exchange, freight from Shanghai to Busan on June 18 was US$231/TEU, down 28% from US$319 a month ago.
The freight rate crossed the US$300 mark for the first time in February due to the global container equipment shortage, and remained in the US$300 range until June when it fell to the US$200 level.