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Brazil Shipping Report Q2 2011

Brazil Shipping Report Q2 2011

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Additional Information

Price	$530.00
Publisher	Business Monitor International
Date of Report	Feb 24, 2011

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Quick Overview

BMI expects to see strong growth and continued investment in the Brazilian port sector in Q211. Growth will continue on the back of exports to Asia, particularly China, and rising domestic consumer spending, which should see increased demand for containerised goods. The pace of growth at Brazilian ports has been rapid and BMI notes that Brazil's ports have not yet developed the infrastructure needed to handle increasing throughput levels. Its ports are poor by international standards, ranking 126th out of the 133 nations surveyed in the World Economic Forum's 2010 Global Competitiveness Report. As such, we expect to see more investment in infrastructure, both public and private, as ports seek to deal with growing traffic and to capitalise on increasing trade opportunities.
Headline Industry Data
?? 2011 port of Santos tonnage throughput forecast is 12% following growth of 15% in 2010.
?? 2011 port of Itajai tonnage throughput forecast is 7% following growth of 63% in 2010. ?? 2011 port of Santos TEU throughput forecast is 12% following projected growth of 15% in 2010.
?? 2011 port of Itajai TEU throughput forecast is 5% following growth of 61% in 2010.
?? 2011 total trade forecast for Brazil is 13.41%.
Key Industry Trends Brazil Digs Deep To Improve Port Capacity, But More Investment Needed To Cure Congestion - BMI welcomes the news that a dredging programme under way at 18 Brazilian ports is on course to finish in mid-2011. Our outlook for Brazilian infrastructure remains cautious, however, as we believe that significant investment in the port sector is still needed in order to ensure that the country is prepared for a considerable increase in traffic when it hosts the World Cup in 2014 and the Olympic Games in 2016. The national programme, funded by PAC, Brazil's Accelerated Growth Programme, to scoop 79mn tonnes of sediment from the beds of access channels and berths at 18 ports at a cost of BRL1.6bn (US$942mn) began in 2007.
'We will have 30% more capacity than at the start of the programme,' said Fabrizio Pierdomenico, secretary of planning and port development at the government's Secretaria Especial de Portos (SEP) and a former director at Santos port. 'Instead of working with two 60,000-tonne ships, you can use one 120,000- tonne ship. You gain in efficiency and add capacity to the port,' he said, adding that commodities producers could be assured they would benefit from cost savings. 'It's as if you are adding more berths,' he added.
Cosan Eyes Santos Expansion To Alleviate Sugar Congestion Crisis - Cosan, the world's largest sugar exporter, hopes to increase its capacity in Santos by 30%, reducing bottlenecks during busy periods. BMI has consistently stated that Brazil needs to resolve its port-capacity crisis if it is to capitalise on increasing trade and export demand, including an expected surge in sugar production. Cosan's President Julio Fontana said the firm would invest US$165mn to improve its two private terminals to raise capacity to 17-18mn tonnes per year, up from 10-11mn at present. The investments would be made through the company's logistics arm, Rumo. Fontana, speaking at a conference with analysts, did not say when works would begin or how long they would take, but said the investments have begun. Cosan also plans to install a canopy at its terminals to enable sugar to continue to be top-loaded into ships on rainy days, ending stoppages that occur each year in wet weather.
New Container Terminal To Cut Congestion At Santos And Capitalise On Brazil's Growing Consumer Demand - BMI believes a new multipurpose terminal at Santos would help ease congestion and increase efficiency at Brazil's main port. The terminal would also be well positioned to take advantage of growing demand for imports from Brazilian consumers. The port project will cost BRL2.3bn (US$1.39bn) in total. The first phase of the Embraport terminal will be able to handle an estimated 1.2mn 20-foot equivalent units a year (TEUs) and roughly 2mn tonnes a year of liquid bulk. Embraport, jointly owned by DP World and Brazilian construction group Odebrech, has revealed that it will spend US$200mn of the loan on port equipment, including quayside gantry cranes, RTG cranes, empty container handlers, terminal tractors, reach stackers and software. The new terminal will compete with the port's existing facilities run by Santos Brasil, the country's largest terminal operator and APM Terminals.
Risks To Outlook Potential downside risks to our outlook include a possibility of reduced Chinese demand in 2011. Our Asia Country Risk team predicts that China's real GDP growth will drop from 10.2% in 2010 to 8.3% in 2011. This will 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 will have a negative effect on Brazil's port sector.
A second downside risk is the possibility that Brazil will not be able to improve its port infrastructure in order to keep up with global demand for iron ore and sugar. Brazil supplies 54% of the world's sugar and it is currently vying with Australia to become China's main supplier of iron ore. Infrastructure deficits limit expansion and we believe that if the country does not improve efficiency and capacity there is a possibility that importers will look elsewhere for their supplies. We acknowledge, however, that importers are traditionally repeat customers and supply contracts take some time to develop, therefore this is a mid-term rather than short-term risk.
The main upside risk to our forecast comes from growing Brazilian consumer demand. The Brazilian economy proved itself to be particularly resilient in the face of the global downturn, and it returned to strong growth in 2010. This rebound has demonstrated the resilience of the Brazilian consumer and supports our view that strong private consumption, supported by the rising affluence of middle class consumers and the increasingly positive picture for Brazil's large low-income population, will drive the country's growth. This paints a positive picture for the sector, as growing imports will result in increased throughput at Brazilian ports.

Table of Contents

Executive Summary ........................................................................................................................................ 5
SWOT Analysis ................................................................................................................................................ 8
Brazil Shipping SWOT .......................................................................................................................................................................................... 8
Global Overview .............................................................................................................................................. 9
Container Industry Overview ..................................................................................................................................................................................... 9
Table: Floating Back To The Yards - New Orders .............................................................................................................................................. 15
Dry Bulk Shipping Overview .................................................................................................................................................................................... 17
Table: Expansion Ahoy - Tata NYK Shipping Fleet Overview ............................................................................................................................. 22
Table: Chief Importers Primary Destinations for Gladstone's Coal Exports ....................................................................................................... 23
Liquid Bulk Shipping Overview ............................................................................................................................................................................... 24
Industry Trends And Developments ............................................................................................................ 29
Market Overview ............................................................................................................................................ 33
Port of Santos .......................................................................................................................................................................................................... 33
Overview ............................................................................................................................................................................................................. 33
Terminals, Storage And Equipment .................................................................................................................................................................... 34
Expansions And Developments ........................................................................................................................................................................... 36
Multi-Modal Links .............................................................................................................................................................................................. 36
Port of Itajaí ............................................................................................................................................................................................................ 37
Overview ............................................................................................................................................................................................................. 37
Terminals, Storage And Equipment .................................................................................................................................................................... 38
Expansions And Developments ........................................................................................................................................................................... 39
Multi-Modal Links .............................................................................................................................................................................................. 39
Industry Forecast .......................................................................................................................................... 40
Table: Major Port Data, 2007-2015 ................................................................................................................................................................... 42
Table: Trade Overview, 2007-2015 .................................................................................................................................................................... 43
Table: Key Trade Indicators, 2007-2015 ............................................................................................................................................................ 44
Table: Main Import Partners, 2002-2008 ........................................................................................................................................................... 46
Table: Main Export Partners, 2002-2008 ........................................................................................................................................................... 46
Company Profiles .......................................................................................................................................... 47
A.P. MØLLER-MAERSK .................................................................................................................................................................................... 47
Mediterranean Shipping Company (MSC) .......................................................................................................................................................... 53
CMA CGM .......................................................................................................................................................................................................... 56
Evergreen Line ................................................................................................................................................................................................... 64
Hapag-Lloyd ....................................................................................................................................................................................................... 68
Neptune Orient Lines (& APL) ........................................................................................................................................................................... 71
CSAV Shipping ................................................................................................................................................................................................... 75
China Ocean Shipping (Group) Company (COSCO) .......................................................................................................................................... 78
Hanjin Shipping .................................................................................................................................................................................................. 83
China Shipping (CSCL) ...................................................................................................................................................................................... 87
Mitsui OSK Lines (MOL) .................................................................................................................................................................................... 90
Nippon Yusen Kabushiki Kaisha (NYK) .............................................................................................................................................................. 95