Middle East war threatens Asia ports credit, Fitch warns

Chinese container ports are likely to experience the clearest impact.

Asia Pacific port operators would face mixed but increasingly negative credit effects if the Middle East conflict persists, according to Fitch Ratings.

On one hand, congestion can lift some storage and ancillary income at container ports, but weaker schedule reliability typically raises unit costs and reduces productivity, the report noted.

“The main tail risk is a prolonged closure of the Strait of Hormuz, which will amplify volume and cost shocks across energy, bulk and container supply chains.”

By country, Chinese container ports are likely to experience the clearest impact through network dislocation rather than material Middle East exposure.

However,  Fitch believes Zhejiang Seaport and Lianyungang Port have sufficient headroom to absorb short-lived volatility, schedule disruption and higher operating costs.

In Australia, rated coal terminals are likely to remain supported by take-or-pay capacity arrangements and diversified shipper bases.

The report expects Port of Melbourne’s landlord model and regulated pricing framework to limit exposure to terminal operating cost increases and support revenue resilience.

For Indian ports, if the conflict persists, economic slowdown and port congestion from schedule disruptions are expected, although the impact should be manageable.

“Rated Indian port operators have limited exposure to crude and liquefied natural gas-related cargoes, whilst the contribution of overseas operations is limited to less than 10% of group EBITDA,” Fitch said.