Aurelia Butler

Global production of shipping containers has fallen significantly as demand for goods sank following the easing of pandemic restrictions, leaving the corrugated steel boxes piled up at major ports.Figures provided to the Financial Times by Drewry, a maritime research consultancy, show that production of 20-foot equivalent units — the industry’s standard size for a container — fell 71 per cent from 1.06mn to 306,000 between the first quarter of 2022 and the same period this year.The decline marks a sharp reversal from two years ago, when container manufacturing boomed in response to a pandemic-induced surge in demand for physical goods which led to a shortage of the rectangular boxes.However, demand for exports has waned since restrictions eased and economies have reopened, leaving the shipping industry with a surplus of containers that threatens to overwhelm ports in China, where up to 95 per cent of the world’s boxes are produced. AP Møller-Maersk, one of the world’s largest shipping conglomerates, has said it is halting production of dry containers until at least 2024, though it said it might resume building 20ft boxes sooner than its larger 40ft versions as the demand for the former appeared to be more resilient.Anne-Sophie Zerlang Karlsen, Maersk’s head of Asia-Pacific customer delivery, told the FT the company was also seeking to sell or scrap more of its older boxes to take advantage of the glut. The drop-off in demand has hit manufacturers hard. Profits at China International Marine Containers, one of the country’s largest producers of the boxes, plunged 91 per cent year on year to Rmb160mn ($23mn) in the first three months of this year.Sales of standard containers dropped 77 per cent during the period, the Shenzhen-headquartered company said, blaming a “continuous decline in the container trade and an insufficient demand for new containers”.Profits at Cosco Shipping Development, the container manufacturing arm of state-owned shipping group Cosco, dipped 71 per cent in the first quarter of this year to Rmb398mn. World Trade Organization economists believe export growth will stutter for the duration of this year, suggesting that demand for containers would remain weak. The latest WTO forecasts, out last month, estimate a boost to trade in goods of just 1.7 per cent this year — down from 2.7 per cent growth in 2022. Container shipping lines are already having to cope with a severe decline in profits following a record period for earnings during Covid-19 lockdowns, when supply chain disruptions — along with the boom in demand for goods — drove up the cost of shipping. The boom left shipping groups rushing to stock up on new containers after pandemic-induced bottlenecks at many ports led to shortages of boxes in place to ship goods from Asia. In 2021, global production reached 7.1mn standard-sized containers, more than double the output in 2020, according to Drewry.Now demand has fallen so greatly that port owners in the region face the fresh problem of having to find space for record volumes of unused boxes.Stockpiles are now at record levels across the Asia-Pacific region, Karlsen said, adding that “massive amounts” of containers were expected to continue to pile up in ports in the region throughout this year.The availability of boxes at Shanghai, the world’s largest container port, has been higher this year than during the spring lockdown of 2022, according to analysis firm Container xChange.However, Michael Fitzgerald, deputy chief financial officer at the Hong Kong-listed shipping group Orient Overseas Container Line, said earlier this month that the glut at Chinese ports had eased “over the past few weeks”. More

The au Jibun Bank flash Japan manufacturing purchasing managers’ index (PMI) rose to a seasonally adjusted 50.8 in May, from a final 49.5 in April. It’s the PMI’s first reading above 50, which separates contraction from expansion, since October.Output and new orders also returned to expansion territory for the first time since last June.Manufacturers in the survey suggested supply chain disruption brought by the pandemic which battered the sector showed “signs of improvement”.”The Japanese private sector economy continued on an upward trajectory,” said Usamah Bhatti, economist at S&P Global (NYSE:SPGI) Market Intelligence, which compiles the survey.”Service providers continued to report strong growth momentum with a renewed record increase in business activity, while manufacturers indicated an improvement in operating conditions for the first time in seven months,” he said.Service-sector activity expanded at the strongest pace on record in May led by the restart of both domestic and international tourism and continued recovery from pandemic disruptions, the survey showed. The au Jibun Bank flash services PMI advanced to a record seasonally adjusted 56.3 in May, from 55.4 in the previous month.The service-sector also showed record expansion in other areas such as total new business, exports and outstanding business.Data showed last week that visitors to Japan rose to a post-pandemic high of almost 2 million in April, benefiting from a relaxation of outbound travel restrictions in China.The au Jibun Bank Flash Japan composite PMI, which covers both manufacturing and service sector activity, stood at 54.9 in May, the highest reading since October 2013. More

BENGALURU (Reuters) – The Bank of Korea will keep interest rates unchanged for a third time on Thursday to assess the impact of previous hikes on inflation and economic growth, according to a Reuters poll of economists who were divided over the prospect of a rate cut by the end of the year.Despite inflation running at nearly twice the central bank’s 2.0% target, the BoK was expected to follow its regional peers and hold rates steady over the coming months to support a fragile economy which narrowly escaped a recession last quarter.All 40 economists in the May 16-22 Reuters poll expected no change to the 3.50% base rate, already the highest since late 2008, at the May 25 meeting.”Korea narrowly avoided a technical recession in the first quarter, but the GDP output gap runs negatively and we expect Korea’s growth to remain below potential throughout 2023. That’s why we believe no additional hikes from the BoK,” said Min Joo Kang, senior economist at ING.None of the economists who had a rate view through the end of 2023 expected the BoK to resume hiking rates. However, there was no clear consensus on whether there would be a cut this year.While 17 of 33 respondents predicted at least a 25-basis-point cut, the remaining 16 forecast the base rate to remain at 3.50% until at least the end of 2023.”We expect the BoK to stay on hold despite growth concerns and easing headline inflation, as core inflation is sticky at twice the inflation target. That said, the odds of a policy rate cut before the end of 2023 are rising,” said Arup Raha, chief Asia economist at Oxford Economics.South Korea’s economic growth was expected to fall to 1.2% this year from 2.6% in 2022, a separate Reuters poll showed. More

(Reuters) -Zoom Video Communications Inc on Monday raised its full-year forecasts for revenue and profit even as growth winds down from a pandemic boom and business spending slows in a tough economy.Shares of the company pared gains to trade 0.7% higher post market hours, after having rallied nearly 5% earlier.Zoom became a household name during lockdowns, but growth has cooled off since then as offices reopen and competition heats up from deep-pocketed rivals including Microsoft Corp (NASDAQ:MSFT)’s Teams, Cisco (NASDAQ:CSCO)’s Webex and Salesforce (NYSE:CRM)’s Slack.San Jose, California-based Zoom raised its annual revenue forecast to between $4.47 billion and $4.49 billion, representing growth of just about 2% from last year. Its earlier forecast was for $4.44 billion to $4.46 billion. Online revenue fell 8% to $473.4 million for the quarter ended April 30. Zoom expects it to reach nearly $480 million in the second quarter and be relatively flat thereafter in fiscal 2024. “I think the stock is paring gains on the implied guidance for enterprise, which suggests it will continue to decelerate to ~6% growth,” said RBC analyst Rishi Jaluria.Quarterly sales in its enterprise business rose 13% to $632 million.Zoom’s online customers range from individuals to small- and medium-sized businesses, while enterprise customers consist of bigger businesses.The company now expects annual adjusted profit per share between $4.25 and $4.31, compared with an earlier estimate of $4.11 to $4.18.  First-quarter revenue beat Wall Street estimates, but recorded the slowest quarterly growth on record at 3%.On an adjusted basis, the company earned $1.16 per share in the first quarter, above estimates of 99 cents, according to Refinitiv IBES. More

People in the UK are among the least confident that the financial authorities will bring inflation under control quickly, according to an Ipsos Mori survey of 29 countries around the world seen by the Financial Times. The results show that six in 10 people surveyed in May thought it would take at least a year to return inflation to what they thought were normal levels with only the Swedish respondents showing a higher level. The figures underline concerns at the Bank of England that the UK is now suffering from prices and wages ratcheting upwards in a process that will make consumer price inflation stay higher for longer. The central bank is hoping that, in data to be published on Wednesday, a big decline in the official rate of CPI inflation for April will help to change attitudes and alleviate fears of persistently rapid price rises. In the Ipsos Mori survey, which was conducted this month, 60 per cent of UK respondents said they thought it would take longer than a year to return inflation to normal levels, the same proportion as in the Netherlands and lower than the 64 per cent of people in Sweden who shared these fears.

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In all other countries surveyed an average of 46 per cent said it would take more than 12 months to bring inflation back down. The UK population’s result accords with the BoE’s own forecast that inflation will return to its 2 per cent target around the end of 2024 or at the start of 2025.

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With inflation high and potentially sticky, UK households were also the most gloomy about their own disposable income levels of all the countries surveyed. Some 46 per cent of Britons surveyed thought their disposable incomes — defined in the survey as after tax and paying bills for living expenses — would fall over the coming year. Mike Clemence, a researcher at Ipsos Mori, said: “British opinion towards the cost of living crisis is significantly more negative than the overall global picture.”UK households are facing higher costs and higher taxes because income tax thresholds and allowances have been frozen until 2028, dragging millions more into paying income tax both at the main 20 per cent rate and at higher rates. When asked about their standard of living, however, UK respondents were more likely to say it will fall than the global average, but it was not as much of an outlier as with disposable income.

The Ipsos Mori results provide insight into the public’s inflation attitudes ahead of the BoE’s next quarterly survey, which will be published in mid-June. In the February results of the BoE survey, members of the public were well aware of rising inflation, with the median respondent saying the inflation rate had been 9.2 per cent over the past year, close to the 10.4 per cent consumer price inflation rate that applied in February. The median respondent expected inflation to be 3.9 per cent in the year ahead and then settle at a 3 per cent rate, still 1 percentage point above the central bank’s 2 per cent target. More