Boston, MA -- (SBWIRE) -- 05/10/2013 -- BMI View: South Korea's Q412 real GDP growth came in at 0.4%, accelerating marginally from the previous quarter's print of 0.1%, but remaining below consensus estimates of 0.5%. Private consumption led growth this time, expanding 0.8% as investments and exports contracted 2.0% and 1.2%, respectively. This has put full-year growth at 2.0%, just a fraction above the 1.9% forecast we outlined back in January 2012 (see our online service, January 31 2012, 'Economy Set For Further Weakness Through 2012').

At the end of January, China's flash PMI came in at a two-year high, with South Korean exporters likely to continue to ride the wave of a cyclical upturn on the mainland. However, when this upcycle starts to fade, the South Korean freight industry will suffer as a result.

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The country's shipping sector enjoyed a very fruitful year during 2012, with cargo traffic hitting a record high at South Korea's seaports. Box throughput grew 4.1% year-on-year (y-o-y) to reach 22.5mn TEUs, on the back of growing transhipment volumes, according to the country's Ministry of Land, Transport and Maritime Affairs (MLTMA).

Headline Industry Data

- 2013 tonnage throughput at the Port of Busan forecast to increase by 5.50%.
- 2013 tonnage throughput at the Port of Incheon forecast to grow by 5.12%.
- Container throughput at the Port of Busan is set to rise by 6.75% in 2013, while the Port of Incheon is predicted to see a 4.53% increase.
- The total value of South Korea's trade (imports plus exports) is set to enjoy real growth of 3.80% in 2013.

Key Industry Trends

Government Moves To Strengthen Domestic Shipping Sector

The South Korean government has initiated plans to block foreign shippers from securing contracts in the state-run energy sphere, in a bid to strengthen the country's economic position following the downturn. On December 21 2012, the state-owned Korea Electric Power Corp held an auction for five units, but only domestic shipping firms were eligible to bid for the contracts to transport coal.

STX Looks At Possibility Of Selling Controlling Stake

STX Group is currently in talks to sell its controlling stake in STX Pan Ocean Co, it was announced at the end of 2012, with talks being conducted between the firm and both domestic and international investors. The strategic move is aimed at paring down debts as the group looks to raise KRW2.5trn (US$2.3bn).

Hanjin, Samsung To Build Green Ships

South Korean shipping firm Hanjin Shipping has confirmed that it is developing new smart, sustainable green ships, according to the Maritime Information Centre. The ships are being designed in collaboration with South Korean technology company Samsung's heavy shipping unit, with the two firms working on the development of a more environmentally-friendly integrated energy management system.

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