BMI View: We expect slow, but steady growth at the port of Singapore in 2015. The port will not reclaim its position as the world's largest container-handling facility from the port of Shanghai, and we believe that such a scenario is unlikely to play out in the next five years. We caution, however, that considerable upside risk to our forecasts is presented by the possibility of a Trans-Pacific Partnership trade deal, which will further bolster the rapidly expanding maritime trade flows between Asia and Latin America and boost volumes at the port of Singapore.
Headline Industry Data
The port of Singapore's gross tonnage will grow by 4.3% in 2015 and will expand an average 5.2% over our medium-term forecast period to 2019.
The port of Singapore's box handling set to grow by 3.0% in 2015, with average annual growth set at 3.6% per annum over the medium term.
The country's overall trade will grow by 2.9% in real terms in 2015 and will average 5% 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 March : The port of Singapore moved less container throughput in March 2015 compared to a year ago, but volumes rose month-on-month, according to preliminary estimates from the Maritime and Port Authority of Singapore (MPA). In March, Singapore port recorded throughput of 2.74mn twenty-foot equivalent units (TEU), down 3.5% compared to the 2.84mn TEU registered in the same period of 2014, MPA figures showed.
Daelim Team Wins Tuas Port Terminal Deal : The MPA has awarded a SGD2.42bn (USD1.81bn) contract to Dredging International Asia Pacific-Daelim Joint Venture for the first phase of the Tuas Terminal. The project comprises dredging water, building wharfs and reclaiming 2.94 sq km of land. Container port activities at Tuas will be consolidated to meet the future demands of container shipping. The terminal will use technology such as automated cranes and automated guided vehicles for container operations. Once complete, the terminal will have capacity to handle 65mn TEU annually, nearly double the throughput handled by Singapore in 2014.
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.