Market Report, "Thailand Shipping Report Q1 2013", Published

Boston, MA -- (SBWIRE) -- 03/18/2013 -- BMI View: Recovery Continues, But Economy Still Fragile

BMI expects Thailand's GDP to grow by 4.4% in 2013 (no change on our earlier projections), but we have lifted our estimate for growth in the year-earlier period - 2012 - to 4.3% (up from 4.0% previously). In essence, we have been impressed by greater-than-expected strength in domestic consumption and investment in the second half of 2012, but although this is encouraging, we don't think it will build muchincreased momentum in 2013. This is because Thailand is still facing strong headwinds from the global economy and there are concerns over domestic political risk factors.

As for industry-specific factors, the main story is that port and shipping growth will be broadly in line with the pace of GDP and foreign trade growth. We note, however, that in 2013 GDP will accelerate marginally, while foreign trade growth will slow down also marginally. Of those two opposed trends we think the slowdown in trade will have more of an impact on port activity. To that must be added a degree of weakness in intra-Asian trade (transhipment is an important business for Thailand) and specific downside capacity factors at the country's second largest facility, the Port of Bangkok.

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Headline Industry Data

- Gross tonnage at Laem Chabang, the country's largest port, set to rise by 6.5% to 60.941mn tonnes in 2013 (faster than the forecast 4.4% GDP growth for the year).
- Box handling at the same port to rise 6.4% to 6.633mn twenty-foot equivalent units (TEUs).
- At the Port of Bangkok BMI projects that tonnage growth will slow to 4.1% in 2013 to 18.936mn tonnes, with container handling set to grow 2.8% to 1.448mn TEUs.
- We expect the real value of foreign trade to grow 5.4% in 2013, down from 5.6% the year before. Imports will be up by 6.4%, ahead of exports which will grow by 4.4%.

Key Industry Trends

Some Progress On Daiwei Funding But Still A Long Way To GoAfter a meeting of Thai Prime Minister Yingluck Shinawatra and Myanmar Vice-President Nyan Tun in Bangkok, it was announced that a bilateral committee was being set up with ministerial-level membership, to discuss ways and means of moving forward with plans for the joint Daiwei deep-sea port project. The overall project, including the deep sea port, an industrial zone, a gas pipeline and other road and rail infrastructure, has been valued as requiring up to US$50bn worth of investment. A small step in that direction came when it was reported that a consortium of banks led by Bangkok Bank and Siam Commercial Bank had arranged a THB10bn (US$325mn) bridging loan to keep the project running, and to tide it over until a proposed US$3.2bn loan from a Japanese bank could be disbursed.

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