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South Africa Shipping Report Q1 2011
Business Monitor International, Jan 2011, Pages: 100
South Africa Shipping Report provides industry professionals and strategists, corporate analysts, shipping associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on South Africa's shipping industry.
The latest port statistics were released in December by South African Transnet National Ports Authority. BMI notes that although November appeared to have been one of the busiest months ever recorded for South African ports, if not the busiest ever, with a number of facilities reporting record throughput, this is not the case across the board, with the latest port investment continuing to under perform. BMI notes that two of the out performers were tied to the Chinese demand story. The ports of Saldanha, SouthAfrica's only iron-ore export terminal, and Richards Bay, location of the Richards Bay Coal Terminal(RBCT), released good figures. BMI believes that these ports will continue to be South African Performers in 2011, as Chinese demand for iron ore and coal continues to grow unabated.
In terms of container handling, there was a stark contrast between the established ports doing well and the new development of Ngqura continuing to disappoint. The port of Durban handled 266,549 20-foot equivalent units (TEUs) in November, a record-breaking month, up both month-on-month (m-o-m) (by15%) and y-o-y (by 26%). The year-to-date (YTD) figure was also up y-o-y, by 7% from 2.2mn TEUs in the January to November period in 2009 to 2.35mn TEUs in the corresponding period this year. Ngqura,by contrast, underperformed. The port only came online for container handling in 2009, so the figures were not as comprehensive as those for the port of Durban. Nevertheless, we could see that the number of containers handled in November (28,742), while up on the 4,230TEUs handled in November last year, the port's second month of recorded statistics, was down m-o-m by 41% from the 48,609TEUs handled in October.
BMI's view of the South African economy in 2011 is that it will continue to experience a rather tepid although slowly strengthening recovery: this means that while growth will be in positive territory,demand growth for shipping and port services will be relatively limited. Boosted by low interest rates and rising wages (South African trade unions have been quite militant recently) we see increased consumer spending as the main driver of growth, although we are concerned over the strong rand, which is having a negative impact on export competitiveness, and over the relative weakness of investment. Politically,following a ministerial reshuffle in October 2010 there are some concerns over President Jacob Zuma,who has lost some support amid accusations of indecisiveness.
We do not exclude a challenge to his leadership of the ruling ANC in 2012, which if successful could force him to step down early from the presidency. BMI estimates 2010 GDP growth of 3% in South Africa (following on from a contraction of 1.8% in 2009 when the country was hit by the global recession). Our outlook for 2011 is for the recovery to edge up a little against the headwinds of a 'double dip' slowdown across the industrialised economies. South African growth will increase to 3.9%, and then gather more pace to 4.1% in 2012. In the five years to 2015 we expect growth to average 4.2% per annum, which, while a fairly subdued rate compared with the years before 2009, still makes South Africa one of the better performers in the Africa and Middle East region.
Total tonnage handled by South Africa's main ports will continue to grow in 2011, although at a slower pace than in 2010. The Richards Bay Port is expected to grow 1% in 2011 compared with 2.3% the preceding year. Throughput of 80.188mn tonnes is still some way below pre-crisis levels. The Saldanha Bay Port is expected to have 4.9% growth in 2011 to 69.369mn tonnes, having slowed down from an estimated 17.1% volume surge in 2010.
At the Port of Durban (POD), both the recovery since 2009 and the medium-term outlook are muted. POD is expected to see volume growth of 1.0% in 2011 to 38.693mn tonnes, down from 2.4% growth in2010. At the Port of Cape Town (POCT), volume growth is expected to be 2% in 2011 with 3.227mn tonnes worth of throughput, after 3.4% growth in 2010.
South Africa's biggest port in terms of the number of containers handled is the port of Durban. BMI currently forecasts that TEU throughput at the port of Durban in 2011 will grow by 5.1% to 2.673mn TEUs. This comes after growth of 6.2% in 2010. The second largest box-handling port is Cape Town,where we predict growth of 1.1% to 784,354 TEUs in 2011. Growth in 2010 was 2.1%.
After the global trade slump in 2009, South Africa's exports remain in recovery mode although the pace of expansion has cooled between 2010 and 2011. Most of the country's key export markets were set to suffer something of a 'double dip' slowdown in 2011 such as the USA, UK and Germany. Its other export markets are emerging economies such as China, at to a lesser extent Zimbabwe, India and Zambia that were expected to experience stronger domestic growth in 2010. In real terms, South African trade value fell by 18.4% during the global recession in 2009, recovered by an estimated 8% in 2010, and is predicted to expand by 4.2% in 2011. In nominal terms, 2011's exports will total US$118.69bn, while imports will be US$126.74bn. South Africa is expected to run a trade deficit over the forecast period.
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