Major ports traffic inched up in June

by Yash Shah

According to tentative data released by Indian Ports Association (IPA), traffic at major ports was 49.1 million tonnes during June 2020. Traffic in June declined by 14.5 per cent. Traffic at major ports had declined by 21.1 per cent in April 2020. The gradual unlocking of the economy in May did not impact traffic at major ports. In May, traffic at major ports declined by 23.3 per cent on a year-on-year (y-o-y) basis to 45.4 million tonnes.

Major ports handle around half of the total traffic handled at Indian ports. The balance is handled at minor ports. Ports handle overseas as well as coastal traffic. Overseas traffic at major ports accounts for more than 75 per cent of total traffic. Loaded cargo traffic can thus be a proxy for total traffic of goods exported from the country and unloaded cargo traffic hint at total traffic of goods imported into the country.

In April 2020, both loaded and unloaded cargo traffic at major ports recorded double digit y-o-y fall. In May, loaded cargo traffic recovered and recorded 0.9 per cent y-o-y growth. This shows that quantity exported through major ports recovered in May. Whereas, unloaded cargo traffic fell by 22.4 per cent in April and further declined by 32.5 per cent in May. This shows that quantity imported through major ports worsened despite easing of restrictions.

Petroleum products (POL), coal, iron ore and containerised cargo account for around 80 per cent of total traffic handled at major ports. The share of loaded and unloaded traffic of these commodities gives an insight into their imports and exports.

POL accounts for one-third of total traffic at major ports. In 2018-19, unloaded POL traffic accounted for more than three-fourths of total POL traffic. Indian refiners were hit by a fall in domestic demand due to the lockdown. As per reports, Indian refiners in April filled tanks with cheaper oil, sold extra cargoes to the government for strategic reserves and declared force majeure on crude imports. Refiners, who normally book cargoes one-to-two months in advance, also deferred some term cargoes scheduled for lifting in April. As per Petroleum Planning and Analysis Cell (PPAC), quantity of POL imports declined by 19.1 per cent in May. Compared to May, POL traffic at major ports did not recover in June and recorded a month-on-month (m-o-m) fall by 0.8 per cent. Thus, a fall in POL traffic at major ports indicates that quantity of POL imports continued to decline in June.

Like POL, coal freight unloaded at major ports accounts for more than three-fourths of total coal traffic. India imports thermal as well as coking coal.

According to Central Electricity Authority (CEA), approximately 90 per cent of thermal coal requirement is met by domestic production and the rest is met by imports. Electricity generating companies are increasingly utilising their stock of coal. Coal India Limited (CIL) recorded a decline in production of coal through May and June 2020. As per tentative data, thermal coal freight traffic at major ports declined by more than 30 per cent in May and June 2020. Thermal coal imports are thus expected to fall in June 2020.

Coking coal is majorly used in the steel industry. During 2018-19, total demand of coking coal for the steel industry was 58.4 million tonnes. Out of this, 51.8 million tonnes was met through imports. After declining by 5.8 per cent in April, coking coal traffic at major ports declined by 35.4 per cent in May 2020. As per data released by Joint Plant Committee (JPC), domestic production of steel has picked up as the lockdown restrictions have been lifted. Coking coal imports are thus expected to pick up.

Loaded iron ore traffic at major ports exceeds unloaded iron ore traffic. Value of iron ore exports have jumped by more than 100 per cent on a y-o-y basis in May since India has been able to grab an opportunity and export low grade iron ore to China. Reflecting this trend, iron ore traffic jumped and recorded 22.3 per cent y-o-y growth in May, after declining by 4.6 per cent in April. As per tentative ports data, iron ore traffic at major ports improved by 25.9 per cent in June 2020. According to a S&P Global report, iron ore demand in China is expected to continue for a few more months. Demand is expected to gradually slowdown in the later part of the calendar year.

The share of loaded and unloaded containerised cargo traffic is similar. Containerised cargo traffic declined by approximately 33 per cent during April as well as May 2020 to average to 8.4 million tonnes. As per tentative data released by Indian Ports Association (IPA), containerised cargo traffic at major ports declined by 22.2 per cent in June 2020. Since March 2017, more than 10 million tonnes of container traffic is handled at major ports. During June 2020, containerised cargo traffic stood at 9.5 million tonnes. Uptick in containerised cargo traffic in June indicates an improvement in both imports as well as exports.

Tentative ports traffic for June hints at a fall in POL and coal imports and a rise in iron ore exports. Compared to May, total traffic at major ports improved in June. Diverging trends of loaded and unloaded traffic show that exports are recovering faster than imports. A slower pickup in imports suggests that domestic demand has not picked pace even as the economy unlocks itself.

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Completed projects 0.84 1.65 1.71 0.19
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Updated on: 03 Aug 2020 3:28PM
Quarterly Financials of Listed Companies
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All listed Companies
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Non-financial Companies
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 Expenses -6.7 -6.4 -4.8 -36.0
 Net profit -13.5 -13.6 -45.5 -32.7
 PAT margin (%) 5.8 5.7 3.6 8.9
 Net fixed assets 10.4 13.1
 Current assets 5.0 3.1
 Current liabilities 5.0 4.6
 Borrowings 8.4 14.6
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Numbers are net of P&E
Updated on: 03 Aug 2020 3:28PM
Annual Financials of All Companies
(% change) FY18 FY19 FY20
All Companies
 Income 8.4 13.2 5.2
 Expenses 9.8 13.4 2.7
 Net profit -39.9 21.0 38.6
 PAT margin (%) 2.0 2.4 7.6
 Assets 10.9 9.3 10.2
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Non-financial Companies
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 Net worth 6.1 8.4 6.5
 RONW (%) 5.7 7.0 14.1
 Debt / Equity (times) 1.0 1.0 0.6
 Interest cover (times) 2.1 2.4 5.0
 Net working capital cycle (days) 77 70 26
 Count of Cos. 21,646 20,492 792
Numbers are net of P&E
Updated on: 28 Jul 2020 9:46PM