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Chile Shipping Report Q3 2011
Business Monitor International, June 2011, Pages: 84
Business Monitor International's Chile Shipping Report provides industry professionals and strategists, corporate analysts, shipping associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Chile's shipping industry
This report believes that Chile's good macroeconomic outlook, and particularly its strong consumer story, will continue to drive container traffic at its ports. The positive outlook for the Chilean economy remains in place, and BMI continues to expect strong real GDP growth of 5.4% in 2011 and 4.2% in 2012. Private consumption is an increasingly important element of this growth. In Q410 this report series estimated that private consumption contributed 4.4 percentage points (pp) to the headline growth rate of 5.8%. A number of leading indicators, including new-cars sales and supermarket sales, suggest that the consumer sector strengthened considerably in 2010, and this report expects consumption to grow further in 2011 and 2012 as wealth rises across the country, contributing to robust GDP growth rates.
Headline Industry Data:
- 2011 port of Valparaiso tonnage throughput forecast to grow 16.6%, with average annual growth of 13.7% the next five years.
- 2011 port of San Antonio tonnage throughput forecast to grow 9% with average annual growth of 8.2% the next five years.
- 2011 port of Valparaiso 20-foot equivalent unit (TEU) throughput forecast to grow 20.76%, with average annual growth of 16.3% the next five years.
- 2011 port of San Antonio TEU throughput forecast to grow 11.84%, with average annual growth of 10.4% the next five years.
- 2011 total trade forecast to grow 16.25%.
Key Industry Trends:
Luksic Displays Vote Of Confidence In CSAV - BMI believes that Chilean mining company Grupo Luksic's purchase of 10% of CSAV's shares, with a total value of US$120mn, is good news for the beleaguered shipping line, which is US$60mn in debt. This report believes CSAV's dry-bulk service will look to take advantage of its new connection with the mining company, given that its container shipping service remains plagued by overcapacity.
Luksic made the purchase through its holding company Quiñenco, acquiring 202,925,890 shares at a price of CLP285 (US$0.60) per share. Quiñenco will now be CSAV's second-largest shareholder after Marinsa CSAV.
New Concession Presents Upside Risk To San Antonio - The San Antonio Port Authority (EPSA) has awarded the concession to expand and operate the terminal of Costanera Espigon to Puerto Lirquen. The expansion plan is designed to help the port cater for a projected rise in throughput over the coming five years. BMI predicts that consumption growth in Chile over the next five years will be among the strongest in Latin America, and in combination with the country's market-friendly economic policies and good macroeconomic outlook this report believes this will drive increases in port traffic, ensuring that San Antonio's new terminal should see strong throughput volumes.
Risks To Outlook:
The main downside risk to this outlook is the possibility that Chile will not be able to improve its port infrastructure in order to keep up with demand. Infrastructure deficits limit expansion. If Chile does not improve efficiency and capacity there is risk that as ports begin to reach the limits of their capacity coming up to 2014 importers will look elsewhere for their supplies.
The main upside risks to the forecast comes from growing demand from Chile's consumers. Q310 data show private consumption continuing to drive growth rates in Chile, contributing 8.46 percentage points (pp) to the headline figure, by far the largest contribution. The report expects private consumption to increase as wages increase country-wide and unemployment continues on its downward trajectory (over 300,000 new jobs were added in 2010, according to preliminary figures). The report believes this bodes well for the country's longer-term economic prospects, and for its port sector.
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