BMI View: We see no respite for Brazil's current account in the coming quarters. Weaker Chinese demand for iron ore and lower global metals prices will continue to depress the country's key commodity exports, proving to be a drag on the Brazilian shipping industry as a result. Moreover, the country's manufactured goods exports will be unable to pick up the slack ( see 'Lower Oil Prices Offer Limited Respite For Current Account', January 7 ).
For 2015, we anticipate the main Brazilian ports to see container throughput annual growth to outperform that in the tonnage sphere. At the country's largest port at Santos, we have penciled in year-on-year box growth of 6.35% in 2015, while tonnage is expected to come in at 3.20% over the same period, arresting the slump in growth experienced in 2014. Annual tonnage throughput gains will be strongest at the Port of Suape at 6.87%, while box throughput will be at its highest year-on-year (y-o-y) levels at the Port of Itajai, which is pencilled in for 6.40% y-o-y growth in 2015.
High labour costs, local content and hiring requirements, as well as significant real appreciation of the currency in the last several years have eroded the competitiveness of Brazil's manufacturing sector, and we do not see a significant improvement in these dynamics going forward, which is not welcome news for the country's shipping industry, at least over the short term.
Key Industry Forecasts
Total tonnage throughput at the port of Santos to grow 3.20% in 2015 to reach 114.72mn tonnes.
Container throughput at Santos to grow 6.35% to reach 3.92mn twenty-foot equivalent units (TEUs) in 2015.
Total tonnage throughput at the port of Itajai to increase 3.50% in 2015 to reach 12.86mn tonnes.
Container throughput at the port of Itajai to grow 6.44% to reach 1.16mn TEUs in 2015.
Key Industry Trends
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