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Recently released market study: Brazil Shipping Report Q1 2014


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2013-12-30 05:13:04 - Recently published research from Business Monitor International, "Brazil Shipping Report Q1 2014", is now available at Fast Market Research

BMI's outlook for Brazilian ports remains broadly positive. However, it should be noted that there are downside risks to our port forecasts for the country, stemming from economic imbalances, potential labour disputes, the struggle to bring the country's port infrastructure up to scratch and the likelihood of a drop in Chinese demand for Brazil's mining exports. We forecast real GDP growth of 2.3% in 2014 - up slightly from an estimated 2.0% in 2013.

While we believe that strong soy, coffee and corn harvests will support export volumes, we see no major upside for Brazil's mining exports, as prices remain under pressure from weakening Chinese demand. As a result, we forecast exports to grow by just 1.9% in real terms in

2014, although this still represents an improvement on the 5.0% contraction seen in 2013.

Full Report Details at
- www.fastmr.com/prod/754483_brazil_shipping_report_q1_2014.aspx

Meanwhile, imports remain in a solid uptrend - a dynamic we expect to continue, given their strong correlation with strengthening industrial production. This has led us to forecast real import growth of 4.5% for 2014, which should provide a welcome boost to shipping volumes.

As well as economic imbalances, we remain concerned about ongoing labour unrest at the country's ports. After a February 2013 strike created delays at some of Brazil's largest public ports, on the back of government plans to modernise the sector, we highlight potential for further industrial action to create massive disruptions at ports. Given that President Dilma Rousseff's government has taken a hard line against union demands and appears to be serious about port modernisation, we expect that several months of intermittent strike action is likely.

Key Industry Forecasts

* Total tonnage throughput at the Port of Santos to grow 4.8% in 2014 to reach 115.9mn tonnes. To 2018, we predict average annual growth of 5.4%.
* Container throughput at Santos to grow 14.5% to reach 4.6mn twenty-foot equivalent units (TEUs) in 2014, with average annual growth of 11.8% to 2018.

Key Industry Trends

Valemax China Saga Finally Resolved With Shandong Shipping Deal?: Vale's strategy of increasing Brazilian iron ore's role in China's steel manufacturing could finally become a reality, with the mining firm signing a deal with Shandong Shipping Corporation to operate four of its Valemax ships. Santos Sugar Exports Slow After Fire: Sugar exports from Brazil's port of Santos have slowed since a fire destroyed the country's biggest sugar exporting terminal. The October 18 2013 fire damaged the six sugar warehouses used by Brazilian cooperative Copersucar, the country's biggest exporter of the sweetener. Around 180,000 tons of sugar were destroyed.

Cattalini To Increase Storage Capacity At Paranagua Port: Cattalini Terminais Maritimos intends to invest BRL450mn (US$196mn) at the Brazilian port of Paranagua in increasing its liquid bulk storage capacity by 80%. This will increase capacity from 380 cubic metres to 680 cubic metres by 2017. BNDES and a private bank are expected to support the plan, which involves installing a fourth group of tanks that can store goods, such as methanol and gasoline.

Risks To Outlook

Brazilian ports are at risk of being exposed to ongoing strikes. Given that MP 595 reflects a serious attempt by the Rousseff administration to reform the port sector, and the government has previously taken a hard line against the unions, strikes could persist intermittently for several months as negotiations progress in fits and starts.

Further potential downside risks to our outlook include a possibility of reduced demand for Brazilian commodities exports such as iron ore due to monetary tightening, which would have a knock-on effect on its demand for raw materials. As China replaced the US in 2009 as the biggest importer of Brazilian products, any slowdown in Chinese spending would have a negative effect on Brazil's ports sector.

Also adding downside risks is the possibility that Brazil will not be able to improve its port infrastructure in order to keep up with global demand for its main exports. The poor state of the country's port infrastructure has been a cause of concern for BMI for some time. Investment in infrastructure has not kept up with the rapid progress made in other areas of the economy. The chronic infrastructure deficit was clearly demonstrated in mid-2010, when ships queued for as long as a month to load sugar from local ports, as a record crop, high demand and wet weather combined to slow loading. These kinds of delays raise questions about whether the country will be able to meet rising demand in the run-up to the 2014 FIFA World Cup and the 2016 Olympics.

On the upside, these major sporting events should considerably boost volumes at the country's ports.

About Business Monitor International

Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets. BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports. Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports. View more research from Business Monitor International at www.fastmr.com/catalog/publishers.aspx?pubid=1010

About Fast Market Research

Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.

For more information about these or related research reports, please visit our website at www.fastmr.com or call us at 1.800.844.8156.


Author:
Bill Thompson
e-mail
Web: www.fastmr.com
Phone: 18008448156

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