Vietnam Shipping Report Q4 2011
Includes 3 FREE quarterly updates
BMI View The Vietnamese shipping sector is in good shape heading into the final quarter of 2011. We maintain our forecast of healthy growth, although the huge increases seen in 2010 will be replaced by more modest rises in 2011. Box traffic is forecast to rise quicker at the port of Da Nang this year and tonnage throughput will increase quicker at Saigon New Port.
As far as the economy is concerned, the State Bank of Vietnam (SBV) announced its decision to cut its reverse repurchase rate by 100 basis points from 15% to 14% on July 4. We believe that the rate cut was in response to a liquidity crunch in the banking system rather than a precursor for monetary easing. We do not expect the SBV to cut its benchmark policy rate (refinance rate) until we see headline CPI trending lower. Accordingly, we are sticking to our view that monetary easing will come in 2012.
Headline Industry Data
The real value of total trade will grow by 11.3% this year, with exports gaining 11.0%, behind import growth of 11.6%.
Total volumes handled at Saigon New Port (SNP, also known as Port of Ho Chi Minh City) will rise by 7.5% to 33.45mn tonnes in 2011,
Total volumes at the Port of Da Nang (PDN) will increase by 2.8% to 3.39mn tonnes.
Box traffic at SNP is projected to rise by 4.4% to 2.97mn 20-foot equivalent units (TEUs), while at PDN there will be a 7.1% gain to 95,520TEUs.
Key Industry Trends
Vietnam Needs To Dig Deeper To Accommodate Mega-Vessels - Vietnam's ports require considerable investment if they are to handle a projected trade increase, BMI feels. Despite recent large-scale foreign investment in the sector, further spending on port modernisation is needed if Vietnam is to take full advantage of increasing trade. A particularly pressing issue, in the age of increasingly large container vessels, is port depth.
Van Phong Port Suspension Highlights Weakness In Business Environment - Construction work at the US$3.6bn Van Phong International Port has been suspended as of June 2011, with no resumption date mooted for the Khanh Hoa facility.
Lack Of Access Inhibits Ports' Success - Tran Quang, the director of Ho Chi Minh's transport department has warned that seaports in Ho Chi Minh City's outskirts are not being utilised to their optimum capabilities, due to a lack of decent access roads.
Key Risks to Outlook General cargo and container capacity has been increasing to meet rapidly rising foreign trade levels. While we expect foreign trade to continue growing, because of the lead times on new port investment, any larger than expected slowdown in trade growth could tip over quite quickly into port overcapacity, with an adverse effect on rates and profitability.
In terms of downside risk, Vietnam's real GDP growth figure came in slightly better than expected at 5.7% y-o-y in Q211. However, leading indicators suggest that economic activity should continue to moderate, and we see this as a positive sign that government efforts to iron out the country's macroeconomic imbalances remain on track. Going forward, prevailing economic headwinds in the US and eurozone should continue to act as a dampener on external demand. This in turn suggests that production activity in the manufacturing sector and other export-based industries should remain depressed in H211.
On the upside, the Vietnamese government recognises the need to cater for bigger vessels and as a result, the country's ministry of transport and its Maritime Administration is to focus on developing deep water ports.
BMI View The Vietnamese shipping sector is in good shape heading into the final quarter of 2011. We maintain our forecast of healthy growth, although the huge increases seen in 2010 will be replaced by more modest rises in 2011. Box traffic is forecast to rise quicker at the port of Da Nang this year and tonnage throughput will increase quicker at Saigon New Port.
As far as the economy is concerned, the State Bank of Vietnam (SBV) announced its decision to cut its reverse repurchase rate by 100 basis points from 15% to 14% on July 4. We believe that the rate cut was in response to a liquidity crunch in the banking system rather than a precursor for monetary easing. We do not expect the SBV to cut its benchmark policy rate (refinance rate) until we see headline CPI trending lower. Accordingly, we are sticking to our view that monetary easing will come in 2012.
Headline Industry Data
The real value of total trade will grow by 11.3% this year, with exports gaining 11.0%, behind import growth of 11.6%.
Total volumes handled at Saigon New Port (SNP, also known as Port of Ho Chi Minh City) will rise by 7.5% to 33.45mn tonnes in 2011,
Total volumes at the Port of Da Nang (PDN) will increase by 2.8% to 3.39mn tonnes.
Box traffic at SNP is projected to rise by 4.4% to 2.97mn 20-foot equivalent units (TEUs), while at PDN there will be a 7.1% gain to 95,520TEUs.
Key Industry Trends
Vietnam Needs To Dig Deeper To Accommodate Mega-Vessels - Vietnam's ports require considerable investment if they are to handle a projected trade increase, BMI feels. Despite recent large-scale foreign investment in the sector, further spending on port modernisation is needed if Vietnam is to take full advantage of increasing trade. A particularly pressing issue, in the age of increasingly large container vessels, is port depth.
Van Phong Port Suspension Highlights Weakness In Business Environment - Construction work at the US$3.6bn Van Phong International Port has been suspended as of June 2011, with no resumption date mooted for the Khanh Hoa facility.
Lack Of Access Inhibits Ports' Success - Tran Quang, the director of Ho Chi Minh's transport department has warned that seaports in Ho Chi Minh City's outskirts are not being utilised to their optimum capabilities, due to a lack of decent access roads.
Key Risks to Outlook General cargo and container capacity has been increasing to meet rapidly rising foreign trade levels. While we expect foreign trade to continue growing, because of the lead times on new port investment, any larger than expected slowdown in trade growth could tip over quite quickly into port overcapacity, with an adverse effect on rates and profitability.
In terms of downside risk, Vietnam's real GDP growth figure came in slightly better than expected at 5.7% y-o-y in Q211. However, leading indicators suggest that economic activity should continue to moderate, and we see this as a positive sign that government efforts to iron out the country's macroeconomic imbalances remain on track. Going forward, prevailing economic headwinds in the US and eurozone should continue to act as a dampener on external demand. This in turn suggests that production activity in the manufacturing sector and other export-based industries should remain depressed in H211.
On the upside, the Vietnamese government recognises the need to cater for bigger vessels and as a result, the country's ministry of transport and its Maritime Administration is to focus on developing deep water ports.
Contents
Executive SummaryBMI View
Headline Industry Data
Key Industry Trends
Key Risks to Outlook
SWOT Analysis
Vietnam Shipping SWOT
Vietnam Political SWOT
Vietnam Economic SWOT
Global Overview
Container Shipping: Overcapacity Threat to Haunt in the Mid Term, Asia-Europe Most Exposed
Drivers
Bellwethers
Rates
Capacity
Title: Newbuilds Due Online In The Mid Term
Dry-Bulk: No Recovery on the Horizon for Dry Bulk As Overcapacity Cloud Hangs Low
Drivers
Capacity
Rates
Liquid Bulk Shipping: At the Start of a Brutal Down Cycle
Drivers
Capacity
Rates
Industry Trends and Developments
Vietnam Needs To Dig Deeper To Accommodate Mega-Vessels
Market Overview
Saigon New Port
Overview
Shipping
Congestion
Terminals, Storage and Equipment
Port Of Da Nang
Overview
Shipping
Congestion
Terminals, Storage and Equipment
Industry Forecast
Macro: Slightly Slower Growth For 2011
Total Tonnage: Saigon New Port to See Strong Volume Growth
Container Throughput: Da Nang Leads the Way
Trade: Forecast Remains 11.3% Growth in Real Terms
Table: Major Port Data
Table: Trade Overview
Table: Key Trade Indicators
Table: Main Import Partners
Table: Main Export Partners
Company Profiles
Vietnam National Shipping Lines (Vinalines)
Vietnam Petroleum Transport Company (VIPCO)
Maersk Line
Mediterranean Shipping Company (MSC)
COSCO Container Lines Company Limited (COSCON)
COSCO Container Lines Company Limited (COSCON)
Hapag-Lloyd
Evergreen Line
APL
CSAV
Hanjin Shipping (Container Operations)
China Shipping Container Line (CSCL) . 91 Skip to top