2012-08-31 03:54:19 - New Transportation market report from Business Monitor International: "Vietnam Shipping Report Q4 2012"

In May 2012, we reported that recent data suggest that economic activity will continue to moderate over the coming quarters in Vietnam, presenting significant downside risks to our already below-consensus forecast of 5.8% for real GDP growth in 2012. We have subsequently downgraded our real GDP growth forecast from 5.8% to 5.2% for 2012. Aside from this, the somewhat bleak picture is compounded by the fact that we continue to see external demand remaining subdued in the months ahead and we expect new exports orders to remain stagnant in 2012. This should in turn lead to an overall slowdown in net exports, adversely affecting Vietnam's shipping sector.

That said, both the port of Ho Chi Minh and the port of Da

Nang are riding the headwinds for the time being at least, with strong growth set to occur at the former in terms of tonnage and box throughput, while the latter will enjoy healthy container throughput in 2012. This is set to continue in the mid term to 2016 and there are hopes that the so-called 'factory of Asia', as Vietnam has become known, will continue to see export potential buoy the shipping sector.


Full Report Details at
- www.fastmr.com/prod/451421_vietnam_shipping_report_q4_2012.aspx


Headline Industry Data

* 2012 tonnage throughput at the Port of Ho Chi Minh City is forecast to grow 7.44% to 35.94mn tonnes.
* 2012 tonnage throughput at the Port of Da Nang is forecast to increase 3.08% to 3.99mn tonnes.
* 2012 container throughput at the Port of Ho Chi Minh City is forecast to rise 7.87% to 3.21mn twenty-foot equivalent units (TEUs).
* 2012 container throughput at the Port of Da Nang is forecast to increase 7.60% to 123,060 twenty-foot equivalent units (TEUs).
* 2012 total trade real growth is forecast to increase 6.23%.

Key Industry Trends

APMT Puts Cai Mep On The Map

APM Terminal (APMT) has to take credit for the strong start to 2012 enjoyed at Cai Mep due to the operator's onus on investment, attracting new clients operating on key trade routes in the process. BMI believes APMT's presence will support continued growth at the port over the medium term (2012-2016) as it continues to improve the port's facilities and attract shipping lines looking to capitalise on Vietnam's positive macroeconomic outlook.

Vinalines Cuts Newbuild Budget by A Third

The decision by Vietnam National Shipping Lines (Vinalines) to cut its spending on newbuilds is prudent, we believe, considering the current operating environment in the shipping industry, especially in the dry bulk sector. If Vinalines can correct some of the internal problems it has encountered of late and can endure the difficult operating environment over the medium term, it will be well positioned to take advantage of growing trade in the region over the longer term.

NYK Line And RCL Launch New Asian Service

Japanese shipping company NYK Line and Thai shipping company Regional Container Lines (RCL) launched a new Asian service from May 13, reported Transport Weekly and the new Thailand-Vietnam- Canton service will utilise three vessels: two from RCL and one from NYK. Each vessel will have a capacity of 1,000TEUs. The service will run every three weeks and call at Bangkok, Laem Chabang, Haiphong, Shenzhen-Shekou and Hong Kong.

Key Risks To Outlook

In terms of risks to the upside, the Cai Mep International Terminal (CMIT), one of five terminals at Cai Mep, had witnessed strong growth as of early July 2012, and will handle almost 600,000TEUs by the end of 2012, or 50% of the total passing through the port, reported Transport Weekly. This is despite the fact that last quarter we were reporting that ports in the Cai Mep-Thi Vai region of the Vietnamese province of Ba Ria-Vung Tau had been struggling to attract vessels.

Meanwhile, CMIT achieved a cargo-handling record for Vietnam, having handled 2,100 containers in 11.5 hours for Danish ocean carrier Maersk Line. Marine Information Centre reported in June that CMIT recorded 43 container moves every hour while handling the MV Mette Maersk, a 116,100 deadweight tonne (DWT) ship with 9,038 TEU capacity. Berth productivity time achieved was 183 moves every hour.

More good news on the horizon arises from the fact that the Japan International Cooperation Agency (JICA), the technical arm of Japan's overseas development assistance programme, is to support upgrades at two key port projects in Vietnam. Port Strategy reports that the Tien Sa port at Da Nang and phase two of Lien Chieu harbour expanded to accommodate larger vessels. Tien Sa's present limit on vessels is 30,000DWT.

On the downside, the Chinese government issued a warning to foreign shipping companies operating in the South China Sea in mid-April 2012, according to the Handy Shipping Guide. Tensions in the region increased following an incident which saw the Philippine navy frigate Gregorio del Pilar involved in a stand-off with two Chinese surveillance vessels after it had intercepted Chinese fishing vessels traversing the region. The Chinese government subsequently declared that it hoped 'irrelevant parties' would stay out of the South China Sea in the future. The dispute centres upon lucrative oil and gas reserves located around the Spratly Islands, an area claimed by a variety of countries, including Brunei, China, Malaysia, the Philippines, Taiwan and Vietnam.

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