BMI maintains its positive outlook on the Canadian port sector for 2015. We believe volumes at the country's ports will be driven by increased demand from the US and China for coal imports, as well as by shippers diverting volumes away from US West Coast ports. The ports will also benefit from continued expansion in private consumption. Several facilities have ambitious expansion plans, which will enable them to capitalise on increasing volumes. We expect GDP growth of 2.3% for Canada in 2015.
Headline Industry Data
2015 Port Metro Vancouver tonnage throughput forecast to grow 2.4%. We project throughput to reach 161.7n tonnes in 2019.
2015 Port Metro Vancouver container throughput forecast to contract 5.2% to reach 3.1mn twenty-foot equivalent units (TEUs). Over the medium term, we project throughput to reach 3.9mn TEUs in 2019.
Key Industry Trends
Prince Rupert To Gain From US Transport Woes
Shippers will continue to divert their routes away from US West Coast Ports towards Canada until ongoing labour talks are concluded, which we believe will be before the end of 2014. We have therefore upgraded our 2014 container throughput growth forecast for the port of Prince Rupert.
Halifax Port's Cargo Tonnage Down 15% In Q214
The Canadian port of Halifax reported a 15% year-on-year (y-o-y) decline to 1.85mn metric tonnes in cargo tonnage in Q214. According to the port authority spokesperson Lane Farguson, the decline in tonnage was contributed by a 29.2% fall in bulk cargo, owing to the closure of the Imperial Oil refinery.
Port Metro Vancouver Need to Up Capacity to Attract US Volumes
Like the port of Prince Rupert, Port Metro Vancouver has also received a modest windfall in container volume thanks to the uncertainties surrounding longshore contract negotiations on the US West Coast, but BMI notes it may have been able to capitalise further had its terminals had more capacity to handle diverted cargo.
Risks To Outlook
We see predominantly downside...