Strait of Malacca (SOM) container terminals will struggle to match the growth in transshipment volumes seen last year, a leading sector analyst has forecast.
Malaysia’s Westports and Port of Tanjung Pelepas (PTP) as well as Singapore’s PSA International recorded “phenomenal growth” of 7.4% in transshipment volumes in 2018, according to UOB Kay Hian analyst Kong Ho Meng.
Last year Westports’ total market share of SOM volumes declined from 16.7% to 16.5% largely due to the impressive performance at its neighbours.
“PTP Pelepas and PSA Singapore recorded very strong growth of 9% each in transhipment volumes in 2018, which supported an overall growth of 7.4% in total volumes to 58 million teu by all three SOM ports combined. The last time this level of growth was seen was in 2011,” said Kong.
In view of pockets of local economic risks and global trade tension concerns, Kong said 2019 will be “a challenging year” to sustain transshipment growth recorded by all three SOM ports last year.
The Kuala Lumpur-based analyst pointed to AP Moller-Maersk guidance last month for container demand growth to slow to slow to 1-3% this year, down from 3.7-3.8% last year.
“This compares against consultants’ forecast for an annual 5% fleet growth for shipping liners,” Kong said.
“With rising fuel costs, there have been reports of a trend of blank sailings and cancelled weekly port calls so as to get as many boxes as possible on each ship.”
However, the analyst said more time is required to gauge the potential downside risk to earnings given the seasonal impact caused by Chinese New Year.
