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Indian ports saw a 4% volume decline in July: Nomura

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  • Ports in India saw a decline in port volumes in July, even as truck usage improved.
  • Adanic Ports, the largest operator of commercial ports in India, also saw volume decline, but continued to account for half of India’s major port volumes.
  • On the domestic front, container volumes continued to grow, with freight transport growing strongly.
  • LPG demand remained generally positive despite a 30% price increase.

Indian port volumes fell in July, led by a decline in exports of chemicals and technical goods, according to an analysis of port data by research firm Nomura.

However, the value of imports remained stable even though India imported the same amount of coking coal at a 40% depreciation in value. According to Nomura, major Indian ports generally saw a 4% drop in volume in July, on a sequential basis.

Adani Ports, the largest commercial port operator in the country, also saw a 2% decline over this period, but volumes still account for half of the volume of major ports in India. While the volume of the major ports was 63.4 million tons, Adani Gates alone good for 31.2 million tons.

“Adani Ports has sequentially maintained a run rate of >30 million tons since May 22, and we expect this to be between 30 million tons and 35 million tons during 2HFY23F, due to the wind in port operations. Therefore, we estimate that the volumes of Adani Ports could exceed the management guidelines of 350-360 million tons for FY23F,” the report said.

Positives in Domestic Logistics – Profit for Railways

There is positive news in the domestic logistics space, with container volumes for July up 19.7% yoy and 2.6% sequentially.

While total import-export volumes declined 8% sequentially, the railway’s export-import container volumes remained flat, suggesting that the government service gained market share in July.

The transportation of important goods such as iron, cement and coal by the railways was a mixed bag. During the period when total imports of iron ore into India increased by 14%, the railways saw only a sequential increase of 5.5% in the traffic of this raw material. On an annual basis, this decreased by 25%.

Rail transport of important goods in July 2022https://londonbusinessblog.com/ India / Bloom

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Ports in India saw a decline in port volumes in July, even as truck usage improved. Adani Ports, India’s largest commercial port operator, also saw volume decline, but continued to account for half of India’s major port volumes. On the domestic front, container volumes continued to grow, with freight transport growing strongly. Demand for LPG remained generally positive despite a price increase of 30%.

Truck utilization is increasing sharply

Truck usage — another key metric that measures how freight is transported within and between states — also showed a dramatic improvement in July, with Nomura noticing a sharp rise in the number of interstate trucks.

Freight traffic grew 51% year-on-year, while diesel prices rose just 3% over the period, signaling improved profitability.

“Fuel costs, as a percentage of freight, were below the three-year average, benefiting truck profitability,” the report said.

LPG consumption improves even if prices rise up to 30%

Total LPG consumption in India grew 8% year-on-year in July, while LPG prices rose to 30% during this period. LPG companies managed to meet demand despite a 6.7% drop in imports.

A closer look shows that domestic demand for LPG fell by 1.7% in July from a year earlier, while commercial consumption increased by 11%. One reason for this could be that companies are gradually requiring employees to return to the office.

Overall, domestic gas prices rose 26% from a year earlier in the period, while commercial prices jumped 30%.

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