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Brazil Shipping Report Q1 2013 - New Market Report Now Available

New Transportation research report from Business Monitor International is now available from Fast Market Research


Boston, MA -- (SBWIRE) -- 02/08/2013 -- BMI's outlook for Brazilian ports remains broadly positive. However, it should be noted that there are downside risks to our Brazilian container terminal throughput forecasts in the coming years as what could be a painful economic rebalancing takes place in the Latin American giant. We forecast GDP growth of 3.7% for 2013, following estimated 1.8% growth in 2012, as the Brazilian real's breakthrough multi-year trendline support on the monthly chart in May indicates that the country's structural economic imbalances, namely a very strong consumer and a weak manufacturing sector, are beginning to unwind sooner than we initially anticipated.

Household levels of debt and debt servicing have ballooned in recent years, feeding the consumption boom that has fuelled the strong growth in container throughputs at the country's ports. With a weaker real to contend with, growth in private consumption and imports could fall. This, to a degree, has been fed into our container throughput forecasts already, as these are informed by our macroeconomic forecasts and our Country Risk team has long highlighted the risks of a weak currency to Brazil's growth story.

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As well as slowing domestic demand, Brazil is exposed to any slowdown in Chinese demand for raw materials. Brazil's rapid economic growth has been aided considerably by the country's strong commodities mix. However, we caution that much of the demand for Brazilian exports of raw materials has come from China. With a slowdown in Chinese economic growth looking increasingly likely, we are concerned that demand for the country's raw materials could weaken.

BMI notes that Brazil's transport network has not yet developed the infrastructure needed to handle increasing throughput levels, causing severe delays and increased costs for shippers. We expect to see more investment in infrastructure, both public and private, as ports seek to deal with growing traffic and to capitalise on increasing trade opportunities.

Key Industry Data

?? Total tonnage throughput at the Port of Santos to grow 8% in 2013 to reach 109mn tonnes. To 2017, we predict average annual growth of 10%. ?? Container throughput at Santos to grow 6% to reach 3.3mn twenty-foot equivalent units (TEUs) in 2013, with average annual growth of 6% during our forecast period.

Key Industry Trends

Itajai Investment To Offset Macro Risk

BMI believes that the announcement by the Port of Itajai that it is to develop a new turning circle for larger vessels offers upside risk to our container throughput forecasts for the facility. This upside risk could be offset by the potential slowdown in imports as growth in household consumption is likely to take a hit in the coming years as Brazil's economic imbalances unwind.

Strikes Hit Ports Sector

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