Container traffic hits a speed breaker ::Centrum

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Container traffic hits a speed breaker
Volumes at India’s 12 major ports continued to decline in
FY12 mainly led by the fall in iron ore volumes. Overall,
volumes declined 5.8% YoY to 43.7mn tonnes. However,
the trend in sequential improvement witnessed for the
last 5 months was broken with a 10.6% MoM drop in
overall thru-put. This is a particular phenomenon
witnessed in the month of Feb for the last 3 years when
there is a sudden drop in volumes sequentially which
later recovers in March. Volumes for POL (Petroleum, Oil
& Lubricants), Coal and other cargoes increased YoY
while iron ore and containers were major laggards. Iron
ore traffic continued its decline, falling 55.8% YoY and
5.8% MoM to 4.1mn tonnes. Container traffic too
mirrored the overall traffic trend declining 7.7% YoY and
by a sharper - 18.0% MoM given that during January it
had recorded its highest volumes in the last two years.
􀂁 Container volumes falter: Containerised traffic declined
7.7% YoY and 18.0% MoM to 0.56mn TEUs – its usual
trend in last two years for the month of February.
Volumes decline in Feb and then recover in March as Q4
has traditionally been the strongest quarter. Volumes at
JNPT declined 5.7% YoY and 18.5% MoM to 0.32mn TEUs.
Chennai port’s container traffic however fell sharply by
14.7% YoY and 20.4% MoM to 0.11mn TEUs.
􀂁 Iron ore throughput continues to remain low: Iron ore
traffic continued to remain low with volumes declining
55.8% YoY to 4.1mn tonnes. The Baltic Dry Index (BDI)
(an indicator of global demand for dry bulk commodities
including iron-ore and coal) continued to remain low
post the sharp fall in January, led by the glut in global
dry-bulk supply and slower demand. BDI was down 40%
YoY and 34% MoM to close at 738 on 28-Feb-12.
􀂁 Traffic mixed across ports: Kandla and Mumbai ports
reported healthy traffic with a growth of 11.9% YoY to
6.8mn tonnes and 17.9% YoY to 5.1mn tonnes
respectively on the back of POL volumes. JNPT and
Paradip reported small declines in overall volumes. While
JNPT faltered on POL & containers, Paradip lost on iron
ore volumes. Traffic at Mormugao and Vizag were the
worst affected by the ban in iron ore mining leading to
lower iron ore port volumes.
􀂁 Container volumes likely to remain steady: We expect
container volumes to remain healthy in FY13 despite
adverse global economic environment and perform
better than in FY12. For FY12YTD container volume
growth (in TEU terms) was 3.3%. We prefer GDL in the
container logistics space.