Boston, MA -- (SBWIRE) -- 03/19/2013 -- With the three-pronged effect of falling demand for mineral exports, and exhaustion in the domestic housing market and foreign credit sources, Australia's economy is set for a testing 2013, with the knock-on effect set to be felt in the country's shipping sector.

Although economic data out of China has improved slightly in Q412, we believe that this is a temporary phenomenon and expect the downturn for Australia's largest trading partner to resume in 2013. The impact of falling export demand from China in 2012 hinted at the devastating impact that further weakness in the Chinese economy will have on the Australian mining sector, as companies fire workers to keep operations profitable and postpone or cancel investment plans.

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We believe that exports will fare slightly better than imports in 2013, and have forecast export growth to come in at around 2.0% in 2013. On aggregate, we expect trends in both export and import growth to lift the growth contribution from net exports to a positive 0.7pp in 2013, from negative 0.4pp in 2012.

Headline Industry Data

- 2013 Port of Melbourne tonnage throughput forecast to grow 3.00%.
- 2013 Port of Melbourne container throughput forecast to rise 1.30%.
- 2013 Port of Sydney tonnage throughput forecast to increase 0.43%.
- 2013 Port of Sydney container throughput forecast to increase 3.20%.
- 2013 total trade growth forecast to contract by -4.12%.

Key Industry Trends

Mitsubishi Cuts Oakajee Spending: Another Nail In The Coffin

Japan-based conglomerate Mitsubishi Corporation has decided to cut its budget and headcount for the AUD5.9bn (US$5.7bn) Oakajee Deepwater port and railway project in Western Australia and we believe that this decision taken by Mitsubishi on the project supports BMI's initial view that further delays could be in store for the Oakajee project. Going forward, we believe that there is scope for additional delays given the doubt still surrounding the long-delayed project's economic feasibility.

Queensland Will Not Build Any New Ports By 2022

There are to be no new ports built in Queensland in the period up to 2022, according to the state government and reported by Port Strategy at the end of November 2012. The state government is currently undertaking its Great Barrier Reef ports strategy. This involves the expansion of major ports within the vicinity of the Great Barrier Reef Heritage Area.

Port Of Melbourne Tenders Sought

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