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Kuwait Shipping Report Q1 2012
Business Monitor International, Dec 2011, Pages: 129
Business Monitor International's Kuwait Shipping Report provides industry professionals and strategists, corporate analysts, shipping associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Kuwait's shipping industry.
Kuwait's ports have struggled to recover the volumes they enjoyed prior to the global economic downturn, but BMI expects this largely to be achieved in 2012, with only total tonnage throughput at Shuaiba not forecast to recoup lost levels until 2013. If there are continued instances of industrial unrest and strikes, however, as Kuwait's ports saw towards the end of 2011, then we may have to revise our forecasts down.
Kuwait's crude oil export facilities will continue to be busy in 2012. A pick up in demand as the US restocks inventories should boost throughputs, though there is the risk that another economic crisis could halt growth in Western oil demand once again.
Headline Industry Data
2012 Port of Shuaiba tonnage throughput growth forecast at 4.8% and to average 5.0% to 2016.
2012 Port of Shuwaikh container throughput forecast to grow 6.9% and to average 6.8% to 2016.
2012 total trade growth forecast to grow 3.6% and to average 3.8% to 2016.
Key Industry Trends
Strikes At Kuwaiti Ports Provide Downside Risk To BMI Estimates: The small Gulf country of Kuwait has been seeing strikes in its freight transport sector as workers seek improved working conditions. BMI notes that this follows a pattern we have seen of increased industrial action across the region, and provides downside risk to our throughput forecasts for the country's ports. Customs and port employees, who were on their second day of striking on October 11 2011, were seeking an increase in wages and better working conditions.
KOTC To Take Delivery Of Oil Tanker: Kuwait's state-owned Kuwait Oil Tankers Company (KOTC) was scheduled to take delivery of an oil tanker on September 30 2011, as part of plans to expand its fleet size. The oil tanker will have a capacity of 320,000 tonnes. It is the fourth tanker to be delivered to KOTC as part of an US$800mn contract for six tankers with South Korea. KOTC's chairman Nabil Bouresli added that the company is to finalise another deal before the end of 2011 for nine new tankers which are due to be completed in 2014 and 2015.
Public Works Ministry Reveals Completion Of Major Construction Work: Kuwait's Public Works Ministry revealed on September 19 2011 that a major part of construction work involving a causeway and railway at the building site of the controversial Mubarak Al-Kabeer Port has been finished. The construction of the railway network is 91% complete, while the causeway for motorists is 94% complete.
Risks To Outlook
The Middle East and North Africa region has seen huge upheavals since the start of 2011, and no country is immune from the repercussions on trade. Kuwait has not been severely hit by unrest, but it is still possible that demonstrations could develop as they have in other Gulf countries, which could adversely affect our port throughput forecasts. We have seen industrial unrest in Kuwaiti ports, more instances of which in 2012 could affect our outlook.
Further potential downside risks to our throughput forecasts come in the form of the exposure to oil price volatility and a slowdown in global demand. Despite the broadly healthy picture of Kuwait's public finances, its high reliance on oil - which accounts for 94% of total revenues - exposes the budget and, consequently, trade to oil price volatility.
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