>PORT ANCHOR: Traffic at Mormugao and Vizag were the worst affected by the ban in iron ore mining leading to lower iron ore port volumes

Container traffic hits a speed breaker


Volumes at India’s 12 major ports continued to decline in FY12 mainly led by the fall in iron ore volumes. Overall, volumes declined 5.8% YoY to 43.7mn tonnes. However, the trend in sequential improvement witnessed for the last 5 months was broken with a 10.6% MoM drop in overall thru-put. This is a particular phenomenon witnessed in the month of Feb for the last 3 years when there is a sudden drop in volumes sequentially which later recovers in March. Volumes for POL (Petroleum, Oil &  Lubricants), Coal and other cargoes increased YoY while iron ore and containers were major laggards. Iron ore traffic continued its decline, falling 55.8% YoY and 5.8% MoM to 4.1mn tonnes. Container traffic too mirrored the overall traffic trend declining 7.7% YoY and by a sharper - 18.0% MoM given that during January it had recorded its highest volumes in the last two years.


■ Container volumes falter: Containerised traffic declined 7.7% YoY and 18.0% MoM to 0.56mn TEUs – its usual trend in last two years for the month of February. Volumes decline in Feb and then recover in March as Q4 has traditionally been the strongest quarter. Volumes at JNPT declined 5.7% YoY and 18.5% MoM to 0.32mn TEUs. Chennai port’s container traffic however fell sharply by 14.7% YoY and 20.4% MoM to 0.11mn TEUs.


■ Iron ore throughout continues to remain low: Iron ore traffic continued to remain low with volumes declining 55.8% YoY to 4.1mn tonnes. The Baltic Dry Index (BDI) (an indicator of global demand for dry bulk commodities including iron-ore and coal) continued to remain low post the sharp fall in January, led by the glut in global dry-bulk supply and slower demand. BDI was down 40% YoY and 34% MoM to close at 738 on 28-Feb-12.


■ Traffic mixed across ports: Kandla and Mumbai ports reported healthy traffic with a growth of 11.9% YoY to 6.8mn tonnes and 17.9% YoY to 5.1mn tonnes respectively on the back of POL volumes. JNPT and Paradip reported small declines in overall volumes. While JNPT faltered on POL & containers, Paradip lost on iron ore volumes. Traffic at Mormugao and Vizag were the worst affected by the ban in iron ore mining leading to lower iron ore port volumes.


■ Container volumes likely to remain steady: We expect container volumes to remain healthy in FY13 despite adverse global economic environment and perform better than in FY12. For FY12YTD container volume growth (in TEU terms) was 3.3%. We prefer GDL in the container logistics space.


To read full report: PORT ANCHOR
RISH TRADER