ECSA – USA: TRADE ANALYSIS
A FLIPPING TRADE Despite the Coronavirus pandemic and poor economic climate, East Coast South America (ECSA) to US East and Gulf coast trades is holding up well for Brazilian exports, as Rob Ward discovers
8 Santos Brasil investing in new cranes, despite losing market share to rival, BTP
26 | SEPTEMBER 2020
8 Figure 1: January to end of May 2020 Exports from Brazil to US East & Gulf Coast, in TEU
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Then, just as signs of consumer confidence were starting to emerge at the end of last year COVID-19 arrived
THE KEY COMMODITIES Terminal port managers in Brazil have confirmed that the main exports to the US are wood pulp and plywood. It is likely to be for stores such as Home Depot and was in growing demand once the US implemented lockdowns. Other items are coee, cheap machinery and vehicles (especially from Caterpillar). By comparison, the major imports from the US were petrochemicals, polymers and synthetics. This view is endorsed by Datamar, revealing that during the first five months of 2020 the top imports from the USA were polymers of ethylene (25,996TEU) and similar various materials and products (20,885TEU). For the same period in 2020, leading exports moving consisted of sawn wood/ wood chips (15,537TEU), building products and stone (13,701TEU) and plywood (13,641TEU). Figure 1 further highlights the leading exports from Brazil to the US. According to Datamar the leading Brazilian port in the ECSA to US trades is, as expected, Santos (the largest for boxes in South America, with 4.2 million TEU handled in 2019, up from 3.9 million TEU in 2018).
Container handling figures for 2019 according to Sao Paulo-based Datamar showed that Brazil and the River Plate exported 449,094 TEU, to the US. This represents an increase of 4.8 per cent over the total for 2018 (of 428,479 TEU), and a rise of 3.8 per cent per annum since 2010 when 320,219TEU was moving. During this time, the trade has “flippedâ€? with the head-haul switching from southbound to northbound. This is because imports fell from 411,682TEU in 2010 to just 348,481TEU for 2019 (albeit up slightly from 345,803 TEU generated in 2018). “Weakening local currencies, especially the Brazilian Real and the Argentine Peso are probably the main push factor in this trade lane flipping,â€? said one veteran Brazilian shipping consultant, who did not wish to be identified. “And the terrible state of the Argentine economy, with the threat of a major IMF default hanging over the country, and the poor economic performance of Brazil during and since the last two years of the left-wing Dilma Rousse government [2011 to 2016] has totally undermined consumer confidence in both countries. Then, just as signs of consumer confidence were starting to emerge at the end of last year COVID-19 arrived.â€? Several box terminal managers in Santos told Port Strategy that the end of last year was, “very positiveâ€? with throughput showing double digit growth in many service lanes, but it then fell away as the full eects of the COVID-19 pandemic took hold and carriers started scheduling blank sailings to keep freight rates up.
Source: Derived from Datamar base information
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