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Chile Shipping Report Q3 2011

Chile Shipping Report Q3 2011

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Additional Information

Price	$530.00
Publisher	Business Monitor International
Date of Report	Oct 6, 2011

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Quick Overview

We believe that Chile's good macroeconomic outlook, and particularly its strong consumer story, will continue to drive container traffic at its ports. Our positive outlook for the Chilean economy remains in place, and we continue to expect strong real GDP growth of 5.4% in 2011 and 4.2% in 2012. Private consumption is an increasingly important element of this growth. In Q410 we estimate that private consumption contributed 4.4 percentage points (pp) to the headline growth rate of 5.8%. A number of leading indicators, including new-cars sales and supermarket sales, suggest that the consumer sector strengthened considerably in 2010, and we expect consumption to grow further in 2011 and 2012 as wealth rises across the country, contributing to robust GDP growth rates.
Headline Industry Data
?? 2011 port of Valparaiso tonnage throughput forecast to grow 16.6%, with average annual growth of 13.7% the next five years.
?? 2011 port of San Antonio tonnage throughput forecast to grow 9% with average annual growth of 8.2% the next five years.
?? 2011 port of Valparaiso 20-foot equivalent unit (TEU) throughput forecast to grow 20.76%, with average annual growth of 16.3% the next five years.
?? 2011 port of San Antonio TEU throughput forecast to grow 11.84%, with average annual growth of 10.4% the next five years.
?? 2011 total trade forecast to grow 16.25%.
Key Industry Trends
Luksic Displays Vote Of Confidence In CSAV - BMI believes that Chilean mining company Grupo Luksic's purchase of 10% of CSAV's shares, with a total value of US$120mn, is good news for the beleaguered shipping line, which is US$60mn in debt. We believe CSAV's dry-bulk service will look to take advantage of its new connection with the mining company, given that its container shipping service remains plagued by overcapacity.
Luksic made the purchase through its holding company Quiñenco, acquiring 202,925,890 shares at a price of CLP285 (US$0.60) per share. Quiñenco will now be CSAV's second-largest shareholder after Marinsa CSAV.
New Concession Presents Upside Risk To San Antonio - The San Antonio Port Authority (EPSA) has awarded the concession to expand and operate the terminal of Costanera Espigon to Puerto Lirquen. The expansion plan is designed to help the port cater for a projected rise in throughput over the coming five years. BMI predicts that consumption growth in Chile over the next five years will be among the strongest in Latin America, and in combination with the country's market-friendly economic policies and good macroeconomic outlook we believe this will drive increases in port traffic, ensuring that San Antonio's new terminal should see strong throughput volumes.
Risks To Outlook
The main downside risk to our outlook is the possibility that Chile will not be able to improve its port infrastructure in order to keep up with demand. Infrastructure deficits limit expansion. If Chile does not improve efficiency and capacity there is risk that as ports begin to reach the limits of their capacity coming up to 2014 importers will look elsewhere for their supplies.
The main upside risks to our forecast comes from growing demand from Chile's consumers. Q310 data show private consumption continuing to drive growth rates in Chile, contributing 8.46 percentage points (pp) to the headline figure, by far the largest contribution. We expect private consumption to increase as wages increase country-wide and unemployment continues on its downward trajectory (over 300,000 new jobs were added in 2010, according to preliminary figures). We believe this bodes well for the country's longer-term economic prospects, and for its port sector.

Table of Contents

Executive Summary ........................................................................................................................................ 5
SWOT Analysis ................................................................................................................................................ 7
Chile Shipping SWOT ........................................................................................................................................................................................... 7
Global Overview .............................................................................................................................................. 8
Container Industry Overview ..................................................................................................................................................................................... 8
Drivers .................................................................................................................................................................................................................. 8
Bellwethers ......................................................................................................................................................................................................... 10
Rates ................................................................................................................................................................................................................... 14
Players ................................................................................................................................................................................................................ 16
Dry Bulk Shipping Overview .................................................................................................................................................................................... 18
Drivers ................................................................................................................................................................................................................ 18
Capacity .............................................................................................................................................................................................................. 19
Rates ................................................................................................................................................................................................................... 22
Liquid Bulk Shipping Overview ............................................................................................................................................................................... 25
Drivers ................................................................................................................................................................................................................ 25
Capacity .............................................................................................................................................................................................................. 28
Rates ................................................................................................................................................................................................................... 31
Players ................................................................................................................................................................................................................ 31
Geopolitical Developments ................................................................................................................................................................................. 33
Industry Trends and Developments ............................................................................................................. 37
Market Overview ............................................................................................................................................ 39
Port of Valparaíso ................................................................................................................................................................................................... 39
Overview ............................................................................................................................................................................................................. 39
Terminals, Storage And Equipment .................................................................................................................................................................... 40
Expansions And Developments ........................................................................................................................................................................... 41
Multi-Modal Links .............................................................................................................................................................................................. 41
Puerto San Antonio .................................................................................................................................................................................................. 42
Overview ............................................................................................................................................................................................................. 42
Terminals, Storage And Equipment .................................................................................................................................................................... 43
Expansions And Developments ........................................................................................................................................................................... 44
Multi-Modal Links .............................................................................................................................................................................................. 44
Industry Forecast .......................................................................................................................................... 45
Table: Major Port Data ...................................................................................................................................................................................... 46
Table: Trade Overview ....................................................................................................................................................................................... 47
Table: Key Trade Indicators ............................................................................................................................................................................... 48
Table: Main Import Partners (US$).................................................................................................................................................................... 50
Table: Main Export Partners (US$).................................................................................................................................................................... 50
Company Profiles .......................................................................................................................................... 51
Compania Chilena de Navegacion Interoceanica S.A. (CCNI) ............................................................................................................................ 51
Maersk Line ........................................................................................................................................................................................................ 53
Mediterranean Shipping Company (MSC) .......................................................................................................................................................... 57
CMA CGM .......................................................................................................................................................................................................... 60
Hapag-Lloyd ....................................................................................................................................................................................................... 63
Evergreen Line ................................................................................................................................................................................................... 67
APL ..................................................................................................................................................................................................................... 69
CSAV .................................................................................................................................................................................................................. 72
COSCO Container Lines Company Limited (COSCON)..................................................................................................................................... 75
Hanjin Shipping (Container Operations) ............................................................................................................................................................ 78
China Shipping (CSCL) ...................................................................................................................................................................................... 82