Port Watch – A Few More Months Like This and We May Break Even!
Part two of 2016 was out of the blocks in fine form as the aggregate ship arrivals for the state of Texas broke through 1400 for the first time this year. The 3% rise was a sight for sore eyes after the second quarter failed to produce a much-needed spring trade bounce.
And the gold goes to…………the Port of Freeport which lead the pack with a handsome 21 percent monthly gain. To date, the arrival numbers are outpacing last year’s by four percent. The silver medal for monthly gains was earned by the port of Texas City which has not seen a monthly percentage gain since March. In July, its ship count was up over 12 percent thanks to a healthy uptick in crude deliveries and chemical exports. Nonetheless, given that this was Texas City’s second triple-digit arrival month in 2016, it still lags 2016’s numbers by over seven percent. The Port of Corpus Christi captured the bronze medal with a 8.3 percent monthly hike. July’s performance – from an arrival perspective – was its best for the year; however, it is well behind on a year-to-date basis with 13 percent fewer arrivals.
While the port of Galveston failed to make the medal standings, it did finish the month in fourth place with a respectable four percent gain. July’s arrival numbers were one shy of its best month back in March. Unfortunately, the dearth of activity at the public docks due to less grain and fewer cars has been a bit of a millstone as the arrival count is off 21 percent for the year. At the far reaches of the state, Brownsville managed to hold its own by duplicating its previous month arrival performance. At present, the port is hanging on to a three lead vis-à-vis its 2016 arrival tally but that could easily fade since the port has cumulatively only seen five more vessels in 2016.
At the opposite end of the state, the port of Sabine put up its weakest arrival numbers for the year which translated to a 5% monthly wane. The worst part of this rather pronounced drop is that it wiped out all of its previous year-to-date gains. Granted, on the energy export front, a cold winter can certainly drive up the end of year vessel count.
While Sabine was at a monthly nadir, the Port of Houston nearly equaled its best month for the year with a 3.4 percent monthly increase. Curiously, despite the fact that the last 3 months have witnessed over 700 arrivals for the port, it still has not been enough to climb into positive territory for the year since it remains two percent behind 2015’s pace. Interestingly enough, container movements are also off one percent for the year but they were down even more for the month to the tune of two percent. Of course, that is far better than the container ship count which is 6.6 percent below last year’s numbers and seven percent less for the month.
The picture in Houston for bulkers remains somewhat bleak as a 1.5 percent monthly decline pulled the year-to-date numbers down to nearly 16 percent. General cargo is certainly no longer enjoying the heady days of $100/barrel oil as reflected by a 14 percent negative difference compared to 2015. On a null note, this ship type duplicated its June count in July. Continuing on the negative side of the ledger, chemical tankers had yet another down month with four percent fewer arrivals; edging it ever closer to an eight percent fall through the seventh month of 2016.
The remainder of the vessel types fared relatively well. The gainers were led by oil tankers which are making a solid comeback against 2015’s arrival numbers. July was a zenith for the year which was over 11 percent higher than the previous month. To date, there have been 4.5 percent more tanker calls in 2016 than in 2015. Oceangoing barges also did quite well and matched its yearly high. Houston has seen 10 percent more of these vessels over the last month and over 14 percent in the aggregate. Car carriers saw no gain for the month but are up five percent for the year thanks to a solid demand for new vehicles for the region. LNG is also benefiting from a robust demand for cheap fuel overseas with a five percent monthly climb and rather impressive year-to-date 12 percent improvement over 2015.
With the onset of 2016’s third quarter, many are keeping a wary eye on the price of the barrel of oil whose daily gyrations are keeping traders on their toes. Yet, the consistent sub-$50/barrel oil has changed some of the regional shipping dynamics. A greater number of Suezmax tankers loaded with foreign crude are calling upon Texas ports. Yet, regional infrastructure activity is certainly not as robust as it was two years ago. Waterborne crude exports are also substantially below the prior year’s record numbers. Ultimately, price drives the source of the feedstock that the refiners use and given the state of global production costs, foreign oil is gaining ground against domestic barrels.
- Date September 13, 2016
- Tags September 2016