Our projections for the Port of Singapore indicate positive growth rates over the next five years. Gross tonnage in terms of throughput tonnes will expand an average 2.6% yearly from 2015 to 2019. During the same period, box handling capacity and total trade will grow by a y-o-y average of 1.9% and 3.9%, respectively. Negotiations over a possible Trans Pacific Partnership trade deal are advancing and the deal will increase the port's trade flows. Expansion projects at the port are continuing and will help Port of Singapore remain competitive in the evolving industry. Pasir Pejang development phases are under way to allow mega vessels to use the port and a liquefied natural gas (LNG) bunkering project is planned, to provide refuelling services to the increasing number of LNG-fuelled vessels.
Headline Industry Data
The port of Singapore's gross tonnage in terms of throughput tonnes will grow by 0.63% in 2015 and will expand an average 2.62% over our medium-term forecast period to 2019.
The port of Singapore's box handling set to fall by 2.29% in 2015, with average annual growth set at 1.8% per annum over the medium term.
The country's overall trade will grow by 1.4% in real terms in 2015 and will average 3.9% to 2019.
Key Industry Trends
Singapore Could Be Back In The Running For First Place : The Trans-Pacific Partnership (TPP) trade deal will further bolster the rapidly expanding maritime trade flows between Asia and Latin America, as well as reviving the transpacific trade route between North America and Asia. With signs that an agreement could be reached as early as end-2015, the TPP poses upside risk to our shipping forecasts for Singapore over the medium and longer term (2015-2024).
Singapore Sees TEU Volumes Drop in First Half of 2015: The port of Singapore moved less container throughput in the first six months of 2015 compared to a year ago. Total container throughput was 16.5mn TEUs in the first half of 2014 compared to 16.0mn TEUs in 2015. Month-on-month average growth for 2015 stands at -1.7%, including preliminary estimates for June by The Marine and Port Authority of Singapore (MPA). M-o-m, volumes fell by 0.2% in June.
Port of Singapore Invites Bids for LNG Bunkering: The focus on cleaner fuels is also leading to the development of liquefied natural gas (LNG) as a potential alternative fuel source for the shipping sector. The development of Tuas port could see LNG-bunkering at Singapore become a reality, with the facility located close to Jurong Island port - Singapore's petrochemical hub. In July 2015, Port of Singapore launched a request for proposal for LNG bunkering. The port aims to commence a pilot programme in early 2017. With an increasing number of vessels looking to use LNG engines to meet emission restrictions, this development will help the port to retain its competitiveness in service offerings.
Development Phases 3 and 4 of Pasir Pejang New Terminals Commence: The port of Singapore is now preparing to be able to handle these new mega vessels. Port operator PSA is investing USD3.5bn in developing two new terminals at Pasir Panjang. Development phases 3 and 4 of the project started in June 2015. The new terminal will boast a draught of between 16m to 18m and 6,000 metre quay length which will enable this new fleet of mega vessels to dock. The USD3.5bn expansion project is forecast to be fully operational by the end of 2017.
Key Risks To Outlook
There are considerable risks to our outlook for Singapore. This is due to the port's massive transhipment traffic, which makes it particularly susceptible to any adverse developments in the global economy - the contraction in both box and tonnage volumes experienced in 2009 when the global economic crisis took hold is clear evidence of this. Should the recovery in Europe falter, than volumes could plummet. Equally, a harder landing in China than we currently envisage could also shake up the global economy.