Pushed by rapid national economic development, Yangtze artery shipping experienced a new period of prosperity in the first half of 2006, with new records made in port turnout, foreign trade output and container generation.

Freight Situation

1.Port Turnout

    During the first six months of this year, the turnout of ports along the Yangtze artery reached 383 million tons (total for the whole industry), up 23.5% from the same period last year, including 45.605 million tons of foreign trade products, up 22.1%, and 1.754 million TEUs of container goods, up 45.3%.

    Output of ports along the six segments of the Yangtze artery line is as follows:

    Chongqing segment: 23.761 million tons, accounting for 6.2% of the total by all major ports along the artery (the same in the following);

    Hubei segment:43.306 million tons, accounting for 11.3% of the total;

    Hunan segment: 3.066 million tons, accounting for 0.8%;

    Jiangxi segment:3.832 million tons, accounting for 1%;

    Anhui segment: 63.234 million tons, accounting for 16.5%;

    Jiangsu segment:still the most prominent stretch of the river, 246.037 million tons, accounting for 64.2%, with foreign trade turnout and container generation taking 91.6% and 73.2% of the total. 

    2.Ro/Ro Service on Chuanjiang

    Thanks to macro control and regulation on over-loaded trucking, trans-provincial Ro/Ro freight on Chuanjiang has been in decline since 2005, registering 147000 vehicles for the first six months and RMB 300 million in revenue, down 4.5% and 3% respectively from the same period last year.

    3.Important Materials Shipping

    Coal shipments decreased.Macro control in recent years has restrained the potential for excessive growth in high energy consumption products. As a result, demand for coal in the first half of 2006 was lower than in 2005. During that period, output of coal by all ports along the Yangtze artery rose to 66.52 million tons, up 9.7% from the same period last year, which represented 17.4% of the total turnout by all artery ports along the river. Coal¡¯s transport volume thus ranked it second highest of the minerals, after iron ore.

    In the first half of 2006, Pukou, Yuxikou, Hankou and Zhicheng, four rail/water coal transhipment ports, unloaded a total of 7.902 million tons of coal from trains, down 11.1% from the same period of 2005. Specifically, Pukou marshalled 2.357 million tons, Yuxikou 4.232 million tons, Hankou 777000 tons and Zhicheng 536000 tons, which respectively accounted for 89.1%, 91.2%, 64.1% and 140.1% of the total delivered over the same period last year.

    In the first half of 2006, Pukou, Yuxikou, Hankou and Zhicheng ports together turned out 9.208 million tons of coal, down 4.2% from the same period last year. Individually, Pukou generated 2.404 million tons, Yuxikou 4.28 million tons, Hankou 1.781 million tons and Zhicheng 743000 tons, which respectively accounted for 91.3%, 95.6%, 85.3% and 181.8% of the total shipped out over the same period last year. While Zhicheng port experienced clear production growth, the other three ports all suffered a major drop in output, mostly because coal miners and shippers ran into a drawn-out wrangle over coal pricing at the beginning of year, and the five major group companies vehemently boycotted potential price hikes.

    Iron ore transport slackened, but retained a prominent position in the market¡¯s growth. In the first half of 2006, Yangtze artery ports turned out 72.742 million tons of iron ore, up 10.5% from the same period last year, accounting for 18.9% of the total output along the whole artery line over that period. Iron ore thus had the highest production volume of an product among all artery ports.

In the first half of 2006, the amount of iron ore transhipped to Wuhan Steel & Iron Plant from the five ports along the lower stretch of the Yangtze reached 5.12 million tons, down 22.1% from the same period last year. Individually, Shanghai port transhipped 0.53 million tons, Nantong port, 1.024 million tons, Zhang-Jia-Gang port, 0.911 million tons, Zhenjiang port, 1.624 million tons, and Nanjing port, 1.058 million tons, which respectively accounted for 103.5%, 72.8%, 70%, 76% and 85.5% of the total transhipped over the same period last year.

    The transport of oil and oil products plummeted. Sinopec¡¯s opening of the Yong-Hu-Ning pipeline and pipeline along the Yangtze River this May ended 28 years of oil transhipment over the Yangtze from the Lu-Ning pipeline, although the five oil refineries (Anqing, Jiujiang, Wuhan, Jingmen and Changling) still receive different kinds of crude carried over the Yangtze directly from the sea, up to about 600- 700 tons per year.

    In the first half of 2006, Yangtze artery ports generated 41.526 million tons of oil and oil products, up 5.1% from the same period last year, accounting for 10.8% of total output. Specifically, crude exports by Nanjing port dropped to 7.735 million tons, down 31.3%; transport through domestic pipelines to 2.842 million tons, down 51.3%; and by sea over the Yangtze to 4.893 million tons, down 9.6% from the same period last year.

      Forecasts for the Second Half of 2006

    Under the effects of macro control, the economy will continue to grow, and at a slower and more steady pace. Shipping along the Yangtze artery will generally be satisfactory, and port output will maintain its rapid growth. Meanwhile, with State leaders and all levels of local governments in the region prioritising the progress of the Yangtze Golden Channel, infrastructure construction will be further accelerated.

    On the other hand, as the Three-Gorge reservoir¡¯s water level is expected to rise from 135 metres to 156 metres after this year¡¯s flood season, and with final constructions on the water lock only allowing transport in one direction at a time, navigation conditions there will become difficult and may affect service efficiency to a certain extent. Additionally, the full opening of Yong-Hu-Ning pipeline and Yangtze pipeline will inevitably reduce the volume of oil transhipment over the Yangtze and impact upon port turnout, shipping quantities and economic benefits not only in the second half of this year but also in the future. Rising fuel prices, over capacity supply, and dropping freight charges, are also expected to put carriers in the area at a considerable disadvantage.