2017 Container Shipping Outlook A look at the demand drivers in the midst of political and policy uncertainties

Transcription

1 2017 Container Shipping Outlook A look at the demand drivers in the midst of political and policy uncertainties Long Beach, February 27, 2017 Mario.Moreno@ihsmarkit.com

2 Agenda US containerized imports trending upward again in Outlook for US containerized imports in the Trump era: pessimistic and optimistic scenarios. Asia-US trade outlook. US-China trade relations: What next? US containerized exports rise in 2016 after two consecutive down years. What to expect in 2017? World TEU export trade outlook. 2

3 3 US imports kept uptrend not without facing headwinds Imports up 4.3% in 2016, only 1% lower than last year s TPM forecast of 5.3% US Containerized Imports, in millions of TEUs Quarterly, seasonally adjusted annual rate Source: JOC Insights 8.5 US Containerized Imports (Year-over-year percent change)

4 NE Asia SE Asia Med EC S Amer Cen Amer WC S Amer N Europ e Mid East India Sub Carib Africa Ocean ia US imports rose for the 7 th consecutive year Contribution to US Containerized Imports Growth, 2016 (In percentage points) East Asia and Mediterranean contributed most to growth. Demand for major consumer goods was solid. In a country-specific level, China once again led the gains in Source: IHS JOC Container Shipping Outlook Consumer goods imports 2016 Growth Furniture +6% Plastic products, misc. +8% Toys +2% Apparel, misc. +5% Lamps & parts +6% 4

5 5 US imports forecast to continue growing in 2017 Main assumption: No trade wars and no serious policy mistakes 6.1% Growth Forecast for US Containerized Imports: Baseline 3.9% 4.3% 6.1% 6.6% 5.7% F 2018F 2019F US imports to expand 6% in 2017 and total 21.8M TEUs. US real GDP to rise 2.3% in 2017 (up from 1.6% in 2016), and expand 2.7% and 2.3% in , respectively. Existing home sales to increase from 5.4M in 2016 to 5.5M in The US dollar going higher and peak in 1Q18. Source: JOC Container Shipping Outlook.

6 6 Pessimistic scenario: US imports stall and fall in Main assumption: Strained trade relations trigger US recession (25% prob.) 6.1% Growth Forecast for US Containerized Imports: Pessimistic 3.9% 4.3% 5.3% 0.6% -0.7% F 2018F 2019F US imports to expand 5.3% in 2017 and total 21.7M TEUs. US real GDP to rise only 1.6% in 2017, unchanged from 2016, down 0.6% in 2018, and up 1.0% in Existing home sales decline from 5.4M in 2016 to 5.3M in The US dollar up 6.9% on average in 2017 over prior year. Source: JOC Container Shipping Outlook.

7 7 Optimistic scenario: US imports accelerate over next 3 years Main assumption: Lower taxes and fewer regulations (15% probability) 6.1% Growth Forecast for US Containerized Imports: Optimistic 3.9% 4.3% 6.7% 8.2% 8.9% US imports to expand 6.7% in 2017 and total 21.9M TEUs. US real GDP to rise 2.8% in 2017, up 3.4% in 2018, up 3.4% in Existing home sales increase from 5.4M in 2016 to 5.6M in The US dollar up only 2% on average in 2017 over prior year F 2018F 2019F Source: JOC Container Shipping Outlook.

8 8 Asia US to keep the uptrend in 2017, with China leading gains Further growth in consumer spending and home sales will support the trade 1.5% Growth Forecast for Asia US TEU Trade 3.3% 5.7% 3.6% 4.1% 6.9% Asia-US trade forecast to grow in the neighborhood of 7% this year, and total approx. 16.0M TEU. China will once again be the main engine of growth in the eastbound trans-pacific lane. Demand will be driven by the consumer sector. US imports from Vietnam forecast to continue growing at double-digit growth rates in F Source: JOC Container Shipping Outlook.

9 9 Scenario: Implications of a US-China trade war over trade US withdrew from TPP but the Trump administration has signaled that it will pursue bilateral trade negotiations with the other TPP members. The US has become heavily dependent on China (and vice versa). China is largest US TEU export market, accounting for almost a quarter of the total US export trade. Punitive tariffs imposed on Chinese imports will harm US consumers. Expect China to impose retaliatory tariffs on US exports AND become less interested in funding US budget deficits.

10 SE Asia NE Asia India Sub N Europ e Africa Cen Ameri ca Ocean ia Carib WC S Amer Med Mid East EC S Amer US exports rise after two consecutive down years Contribution to US Containerized Exports Growth, 2016 (In percentage points) US TEU exports rose 2.5% in 2016 after falling for two consecutive years. East Asia drove the bulk of the growth. Global demand continued to be stubbornly sluggish, and the US dollar value kept the uptrend. Source: IHS JOC Container Shipping Outlook Top US TEU Exports 2016 Growth Paperboard 2% Pet & animal feeds 2% Logs & lumber 21% Wood pulp 5% Meat, fresh and frozen 16% 10

11 11 US TEU exports forecast to grow modestly in 2017 Main assumption: No trade war with China 0.0% Growth Forecast for US Containerized Exports: Baseline 2.7% -2.3% 2.5% 0.8% -3.6% F US TEU exports forecast to expand only 0.8% in 2017 and total 11.9M TEUs. No trade war with China. World GDP, excluding NAFTA, forecast to rise 2.9% in 2017, up from 2.5% in World industrial production, exc. US, forecast to pick up the pace in 2017 and rise 3.0%, up from 1.8% growth in Unfavorable exchange rates. Source: JOC Container Shipping Outlook.

12 12 World TEU exports forecast to modestly improve in 2017 World TEU Exports Source: IHS World Trade Service. 4.3% 3.7% The global economy continues to brighten. 1.5% 2.2% 1.1% 2.6% The probability of a global trade war is still small. Asia-Europe trade forecast to rise in 2017 between 2 and 4% after expanding by only 1.2% in prior year F

13 Conclusions US imports forecast to continue growing in 2017 and beyond: in an pessimistic scenario, US imports are forecast to grow again in 2017 but stall and fall over on trade war effects. Asia-US trade forecast to expand in the neighborhood of 7 percent in 2017 In a US-China trade war scenario the American consumer has a lot to lose. US exports forecast to grow modestly in 2017 on the back of unfavorable exchange rates, and a modest pick up in global economic growth. World TEU exports are forecast to modestly improve in

14 14 Thank you. JOC Senior Economist Mario O. Moreno, JOC Insights, JOC Container Shipping Forecast, JOC Port Forecast