CHINA's Ministry of Transport has said in a port report that dry bulk and container shipping along the nation's coast are seeing too much capacity leading to falling rates.

The report, however, points out that China's domestic coastal shipping market is generally stable, but there are increasing issues with over-capacity. The report looks at coastal dry bulk shipping, domestic wet bulk shipping, coastal box shipping and cross-Taiwan Strait trade.

Growth rates for the domestic maritime transport of coal, ore and grain have slowed, the report stated, adding that shipping capacity has increased. Shipping capacity in China's domestic dry bulk trades increased by 13.1 per cent year over year. The Ministry anticipates that, in the coming year, the demand for dry bulk transport will slow down at the same time that a 'large number' of ships enter the market.

Demand for coastal oil tanker transport declined while capacity increased, according to the report. The market was affected by the overhaul of marine oil terminals and the suspension of production in some refineries. Volumes of oil cargoes declined by 7 per cent year over year, the report stated, to stand at 70.4 million tonnes.

Demand for bulk liquid chemical transport is described as 'stable', capacity is in a slight 'surplus' and the freight rate remains 'stable'.

China's chemical production and consumption is said by the Ministry to be in a period of 'low growth'. Domestic coastal transport of liquid chemicals reached 26.8 million tonnes, a year-over-year increase of 3.1 per cent. The domestic coastal Chinese chemical-tanker fleet (which includes oil tankers, chem-tankers and dual purpose ships) stood at 288 ships with a total deadweight of 1.12 million metric tonnes, reports New York's FreightWaves.

China's liquefied gas carrier market experienced increased demand in 2018 but was otherwise 'generally balanced'. By the end of 2018 there were 72 coastal liquefied gas carriers with a total deadweight of 247,900 metric tonnes. China's domestically-carried LNG volumes in 2018 were described by the Ministry as 'basically unchanged' since the previous year.

China's domestic box shipping industry saw the introduction of a large amount of extra capacity and freight rates are 'generally falling'. In 2018 China's domestic coastal box traffic increased year over year by just below 8 per cent. By the end of 2018 there was a total of 252 vessels with a box-carrying capacity greater than 700 TEU; that fleet had a total capacity of about 716,000 TEU. The number of boxes carried increased by 18.3 per cent.

Looking ahead, China's Ministry of Transport envisages growth in the coastal box shipping trade in the current year due to an increase in the domestic containerisation rate, that will partially absorb excess ship capacity. However, the Ministry warns, excess capacity from the international box shipping trades could be redeployed into the domestic market.

There was a marginal increase in direct cargo volumes shipped across the strait. Cross-strait box traffic volume was 2.2 million TEU in 2018, a decrease of 2.1 per cent from the previous year. The Ministry of Transport says that volumes were generally up in 2018 owing to cross-strait exchanges and cooperation. It predicts that the two-way cross-strait container trade volumes will further increase by up to 10 per cent in 2019.