A few weeks ago I posted on European trade links to the other major economies. In the post a produced the following chart on Chinese exports to the EU27:
So, the EU is China’s largest export destination. Now, from Bloomberg today comes this:
Slumping shipping costs show exports to Europe from China are “falling off a cliff” as the euro- region crisis chokes off consumer spending, according to RS Platou Markets AS, a unit of Norway’s biggest shipbroking group.
The CHART OF THE DAY shows how the cost of hauling goods to Europe from China is falling faster than rates for deliveries to the U.S. The price for shipments to Europe is down 39 percent to $511 per twenty-foot box since Aug. 31, according to figures from Clarkson Securities Ltd., a unit of the world’s largest shipbroker. That’s more than double the 18 percent slide in the cost to the U.S. West Coast, measured in 40-foot units.
…While shipping rates were affected earlier this year by an expansion of the fleet that plies the Europe-China route, stable capacity since August shows the latest drop is a result of weak demand…
The recent China Flash PMI for November registered a boost to growth in its new export orders component which may be apparent in the early November stabilisation for US shipping rates. Alternatively, the subsequent fall in US rates might be exaggerated because as a result of more ships being available given the the dive in the European trade route.
On thing that is obvious: European demand is crashing.