BMI View: Our forecasts for Busan and Incheon, South Korea's two largest ports, reflect our concerns over a strengthening won, a slowdown in Chinese growth and uncertain demand among other key export partners. We have downgraded our forecasts for 2015 relative to 2014. For Busan we expect tonnage throughput to increase by 4.46%, down from 2014's 6.71%, while at Incheon we expect growth of 2.19%, a fall from 2014's 2.72% growth.
South Korea's exports declined in April, as the won's strength began undermining the competitiveness of sales abroad. This has an impact on the country's shipping industry, with shipments overseas falling by 8.1% year-on-year in April 2015, according to the Ministry of Trade, Industry and Energy. Bloomberg quoted Suh Dae Il, a Seoul-based economist for Daewoo Securities Co, as saying: 'Recovery in South Korea's export destinations including Europe remains uncertain, and the won's relative strength is also negative for exports.' A weak Japanese yen and falling Chinese demand will also provide headwinds to exports in 2015.
Headline Industry Data
2015 tonnage throughput at the port of Busan forecast to increase by 4.46%.
2015 tonnage throughput at the port of Incheon forecast to grow by 2.19%.
Container throughput at the port of Busan is set to rise by 5.52% in 2015, while the port of Incheon is predicted to see a 10.00% increase.
Real total trade growth in 2015 is set to be 2.15%.
Key Industry Trends
New Far East-Latin America Service Launched
In March 2015 Hanjin Shipping, Hyundai Merchant Marine and Yang Ming Marine Transportation Corporation announced plans to establish a new service linking the Far East with the west coast of Central and South America from July 11 2015. The WLX (West Latin Express) or SA2 (South America Loop 2) service will be operated with 10 4,500-5,500 twenty-foot equivalent units (TEU) ships on a weekly basis. The port rotation will be Shekou, Kaohsiung, Ningbo, Shanghai, Busan, Manzanillo (Mexico),...