H113 data released for the port of Montreal, Canada's second-largest port and the country's key east-coast maritime gateway has led BMI to revise its throughput forecasts for the port. The facility over the short and medium term stands to benefit from the larger box ships that are now able to navigate the St Lawrence waterway, a development that offers upside risk to our container throughput forecasts for the port.
In H113 Montreal's total tonnage expanded by 4.8% to 13.7mn tonnes. This marks a recovery year-on-year (y-o-y), as in H112 the port handled 13.1mn tonnes, a y-o-y decline of 5%. Although BMI was previously forecasting growth for the port in 2013, this figure for the first half of the year, is stronger than we were projecting and so we have revised up our full-year estimate. In 2013 we project the port will handle 29.9mn tonnes, an annual increase in throughput of 5.2%. This forecast marks a full recovery after the port's total tonnage volumes slipped by 0.39% in 2012.
|Port of Montreal H113 % Change y-o-y|
Non-containerised cargos and dry bulk are the key drivers in the port's growth in H113, with non-containerised shipments up 18.1% and liquid bulk expanding by 12.9%.
Total tonnage throughput at the port is expanding despite the tough trade outlook for the country. BMI is projecting Canada's economic growth to plateau in 2013 with another year of 1.7% growth. The port's growth has also been achieved despite a slowing in the US economy, with real GDP projected to expand by 1.85% in 2013 down from 2.2% in 2012, Canada's main export partner.
The macroeconomic outlook for Canada and its key trade partner is however affecting the port's box throughput. In H113 box levels at the port slipped by 1% y-o-y to 672,947 twenty-foot equivalent units (TEUs). The decline has led BMI to revise down its forecast for the full year to 1.4mn TEUs, a y-o-y drop of 1%. This will mark the port's second consecutive year of box decline, as in 2012 the port's container throughput fell by 28.6%.
BMI believes that container throughput will start to look up after this point and our forecasts are at risk to the upside with authorisation from the Canadian Coast Guard in May 2013 for the passage of vessels 44m wide on the Quebec-Montreal sector of the St Lawrence Waterway. This will mean that vessels with a 6,000 TEUs capacity will be able to reach Montreal.
The boost in the size of vessels able to call into the port offers upside risk to our throughput forecasts over the medium term. Currently we project throughput levels at the port to benefit from an uptick in Canada's economic outlook.
Over the medium term (2013-2017) we project Canada's real GDP to expand by an annual average of 2.2%. On the back of this uptick we forecast total tonnage at the port to expand by 29%, an annual average of 5.2% to reach a projected 36.7mn tonnes in 2017. Container volumes over this period are forecast to increase by 13.8%, an annual average growth of 2.6% to reach an estimated 1.6mn TEUs in 2017.
|LHC: Port of Montreal Throughput, tonnes (000) and % Change y-o-y. RHC: Port of Montreal Container Throughput (TEU) and % Change y-o-y|
At this growth rate the port's container throughput will be able to recover to its pre-2009 downturn level of 1.5mn TEU (which it recorded in 2008) in 2016, but the facility will not be able to replicate its 2011 throughput of 1.9mn TEU.