Boston, MA -- (SBWIRE) -- 08/27/2012 -- BMI maintains its broadly positive outlook on the Chilean shipping and port sector for Q312. We caution, however, that volume growth is expected to slow somewhat in line with our view that the Chilean economy's robust economic growth is likely to continue cooling in the coming quarters. We believe that declining exports, combined with a moderation of private consumption and gross fixed investment, will weigh on Chile's headline growth in 2012. Given the strength of the authorities' growth-supporting policy arsenal, however, we are happy to remain above consensus, forecasting real GDP growth of 4.8% in 2012.
We see the domestic consumer demand slowing, and this will have a knock-on negative effect on demand for imports of containerised goods. Chile's external demand story is also likely to weaken, and we still believe that import growth will outpace that of exports, putting downside pressure on volumes going through dry bulk terminals. This could be exacerbated if our view for a slowdown in Chinese economic growth plays out. Given the significance of copper exports to Chile's economy, any significant drop in copper export demand - in particular from Asia, which comprises around 65% of demand - or a large correction in copper prices, could push net exports further into negative territory and pose significant downside risk to our port throughput forecasts for the country.
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Headline Industry Data
- 2012 Port of Valparaiso tonnage throughput forecast to grow 13.5%, with average annual growth of 12% the next five years.
- 2012 Port of San Antonio tonnage throughput forecast to grow 7.6% with average annual growth of 7.5% the next five years.
- 2012 Port of Valparaiso twenty-foot equivalent unit (TEU) throughput forecast to grow 16.3%, with average annual growth of 13.9% the next five years.
- 2012 Port of San Antonio TEU throughput forecast to grow 9.7%, with average annual growth of 9.2% the next five years.
Key Industry Trends
CSAV Hopes Capital Injection And Route Sharing Will Save The Day, But Bleak 2012 Ahead
CSAV's financial woes look set to continue, with the Chilean company reporting an astronomical loss for 2011. The company's disappointing results were down to low rates and high fuel costs. CSAV will be hoping to reverse its fortunes through route-sharing agreements in 2012, but BMI believes the container shipping sector's woes are set to continue for some time to come due to continued overcapacity and declining demand.
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