Mining curbs and high prices of coal hurt cargo traffic across major ports.
The slowdown is becoming pronounced, as various indicators of economic growth show signs of stress. The lastest figures of cargo volumes across key ports in India have remained flat in November. Cargo traffic at key ports during the month came in at 45.7 million tonnes, registering a one per cent growth month-on-month. Cargo volumes have been hit not only in recent months but all through this financial year, as most commodities have shown a declining trend. Cargo traffic over April-November grew 1.3 per cent year-on-year to 370.7 mt.
Analysts say slowing cargo traffic is another indicator of the general economic mood. The reasons remain the same. The ban on mining imposed by the apex court in August has expectedly hurt iron ore exports. According to Prabhudas Lilladher, November witnessed a particularly sharp fall, 36 per cent year-on-year and 20 per cent month-on-month. With the Orissa government putting curbs on iron ore exports, volumes at Paradip and Visakhapatnam plummeted 74 per cent and 47 per cent, respectively.
| GRIM INDICATORS | ||||||
| Categories | Nov ‘11 (MT) | Nov 2010 | % Chg | YTD FY12 | YTD FY11 | % Chg |
| Petroleum products | 14.6 | 14.3 | 1.4 | 118.4 | 117.5 | 0.7 |
| Iron ore | 4.8 | 7.4 | -35.4 | 42.4 | 50.4 | -15.9 |
| Fertiliser | 2.9 | 1.9 | 52.6 | 13.2 | 14.8 | -10.6 |
| Coal | 5.9 | 5.7 | 3.7 | 51.1 | 47.5 | 7.7 |
| Container | 10.0 | 9.2 | 9.5 | 79.5 | 73.5 | 8.2 |
| Other | 7.5 | 7.3 | 3.2 | 66.1 | 62.2 | 6.2 |
| Source: Motilal Oswal and IPA | ||||||
Another big reason for slowing cargo traffic at leadings ports is the slowing demand for imported coal. As prices of both coking and thermal coal rose sharply through 2011, key importers – steel and power generation and steel companies – imported less than expected. Analysts say that while power generation companies are waiting to renegotiate agreements with state electricity boards, several steel plants are functioning at lower capacities.
According to Motilal Oswal’s monthly report on the ports sector, in year-to-date FY12, coking coal imports declined 12 per cent, but non-coking coal imports grew 34 per cent. Ports that saw a decent volume growth in coal also clocked relatively higher cargo volumes. For instance, traffic grew 86.3 per cent at Ennore and 20 per cent at Kochi, as both these ports volumes were boosted by coal cargo.
Analysts say that slowdown is more apparent in the container traffic, as demand from Europe is showing signs of a visible weakness. Container traffic across most ports remained flat. An overall slowdown in trade has impacted JNPT container volumes, where Prabhudas Lilladher is seeing five per cent YoY decline in volumes for November. However, individual ports are seeing divergent trends. Analysts expect container traffic to remain weak over the next few months. However, slowdown in container traffic may impact container freight station operators like Gateway Distriparks. Private ports, however, are not expected to be impacted much, even as the container traffic remains flat in coming months.