US-China trade war worries turning shippers cautious, container maker says
Singamas, the world’s second-largest shipping container maker, says that the trade spat has not cut into shipping volumes, yet
Singamas Container Holdings, the world’s second-largest maker of shipping containers, said its clients were turning cautious as a trade war escalated between the US and China, and that the second half of the year could become increasingly challenging as the rhetoric heats up.
Chairman and chief executive Teo Siong Seng told a briefing on the company’s first-half results on Tuesday that rising tensions between the world’s two biggest economies had not yet cut into shipping volumes or hurt the company’s business, but “people are watching it very carefully”.
“As long as the US demand is there, the supply chain will be prolonged,” he said, adding that some shipping could be shifted from China to other countries in Southeast Asia, such as Vietnam, Cambodia or Myanmar. “If anything, the demand for boxes will go up,” he said.
However he noted that while container orders were full up to September 2018, buyers had become more cautious when placing orders because of concerns over the trade war as well as rising interest rates and currency fluctuations.
The company, a subsidiary of Singapore-based transport and logistics company Pacific International Lines Ltd, reported a loss of US$2.1 million in the first half of the year, compared with a profit of US$16.6 million in the first six months of 2017. The rising cost of materials sent its manufacturing segment, which accounted for more 98 per cent of its revenue, to a pre-tax loss in the first half, it said.