Our outlook for the Colombian ports and shipping sector remains positive, with a backdrop of strong domestic economic growth, as well as support from external demand for commodities. There are also encouraging signs of badly needed investment in transport infrastructure, both in the country''s ports and in the freight transport infrastructure that feeds them, on the back of the country''s developing mining sector. However, progress on such projects is often delayed, and BMI cautions that bottlenecks may remain a problem for some time.
Colombia''s economic expansion continues to power forward, in line with
our forecast for real GDP growth to reach 4.7% in 2012. Private consumption, fuelled by credit expansion and historically low interest rates and fixed capital formation, especially in the energy and mining sectors, will continue to spearhead Colombia''s long-term growth, underpinned by a strong performance in commodities exports, all of which bodes well for investment and volumes in the country''s shipping sector.
Our Oil & Gas team forecasts total oil production to grow by 8.7% to 990,070b/d this year, as production increases at both current and new fields. Moreover, exports are likely to be helped by high oil prices over the coming months, due to elevated geopolitical tensions in the Middle East and tight supply dynamics, boding well for exports of liquid bulk. On the dry bulk side, the outlook also remains positive. Colombia''s coal exports have ramped up in recent years, experiencing 39.6% growth in 2011.
We anticipate further increases in 2012, as Xstrata''s planned US$1.3bn investment into the Cerrejón coal mine by 2015 will help boost production.
Given Colombia''s still-substantial infrastructure deficit, we expect investment into infrastructure and freight transport related to the export sector will to continue to grow in 2012. This comes as both the government and private companies look to decrease supply chain inefficiencies and increase the country''s export capacity from both the Caribbean and Pacific coasts.
Headline Industry Data
- The Port of Cartagena will see total tonnage volume increase by 9% to 11.98mn tonnes in 2012.
- Container traffic at the port will rise by 12% to 1.90mn twenty-foot equivalent units (TEUs).
- Volume at the Pacific port of Buenaventura will be up by a more restrained 3.49% to 9.5mn tonnes, while container traffic will rise 11.6% to reach 531,805TEUs.
Key Industry Trends
Growing Colombian O&G Exports To Boost Volumes At Puerto Bahía BMI believes the construction of a new oil and gas-focused port in Colombia is good news for its shipping and freight transport sector, which has struggled to handle increasing volumes as the country''s extractive-industry boom continues. We expect Colombia''s oil and gas exports to continue rising steadily during our forecast period, ensuring there will be plenty of volume to supply the new facility.
Magdalena River Set For Increased Investment, Driven By Colombia''s Mining Boom BMI believes there is upside potential for freight volumes on Colombia''s main inland waterway, the Magdalena River, on the back of plans to use the river as an alternative to roads to transport goods from the country''s central region to the coast. Given that Colombia is in the middle of a mining boom, BMI expects the river to become an important route for exports to the country''s Caribbean coast.
Key Risks To Outlook
For Q312, the main risk to our positive outlook for Colombia remains the possibility of a hard landing for China, which we expect to take up the shortfall as US imports of Colombian coal decrease. A severe slowdown in the country would kill Chinese demand for raw materials such as iron ore and coal, leaving Colombia to look elsewhere for an export market. We believe Colombia is set to benefit from its free trade agreement (FTA) with the US. The country is already in desperate need for improved transport infrastructure to export its coal reserves, and since this FTA is likely to increase US imports it should bring with it some much-needed investment into Colombia''s port infrastructure.