October 31, 2020

BULK TERMINALS MARKET ANALYSIS (2020-2027)

Market Overview

Dry bulk is a product, shipped in large amounts and unpackaged situations by the bulk carrier. Generally, dry bulk products are categorized major dry bulk and Minor dry bulk, major dry bulk comprises Grains, Coal And Iron Ore, Minor bulk includes Minerals, fertilizer, cement, woods, sugar, Bauxite/Alumina, etc. Coal is the second-largest bulk commodity in terms of volume following iron ore commodity. There are also liquid bulk commodities, which includes oil, petroleum product, chemicals, gas, and processed fuels. Liquid bulk segment contributes more than 30% of total bulk trade-in terms volume throughput globally. Gas bulk trade involves various gasses like compressed natural gas, liquefied natural gas, and many other gases like hydrogen, etc.

The global Bulk Terminals Market was accounted for 16,548.1 Mn Tons in terms of volume in 2019 and is expected to grow at CAGR of 3.2% for the period 2020-2027.

Market Dynamics- Drivers

  1. Increasing trade of natural gas is expected to drive growth of the global bulk terminals market during the forecast period

Since the level of emission from power industries and automobiles has increased significantly, it has become mandatory to find substitutes for conventional fuels such as coal and other petroleum-based fuels. As a result of this, many major consumer economies have shown inclination to adopt natural gas as an effective substitute with lesser emission. According to Coherent Market Insights’ analysis, Global natural gas production has grown by approximately 2.2% in 2015 than in the preceding year, whereas consumption of natural gas is increased by 1.7%. Countries such as Australia, Qatar, and Norway increased the export of natural gas significantly. According to the same source, global LNG trade was valued at around 244.8 MT in 2015, an increase of nearly 4.7 MT than that in 2014. Thus, increasing focus on natural gas from developed as well as emerging economies is expected to boost the global bulk terminals market growth over the forecast period.

  1. Growing demand for grain and minor bulks is expected to propel the global bulk terminals market growth over the forecast period

According to the United Nations (UN), global population has increased over 7 billion and is estimated to cross 8 billion, growing at a rate of 1.15% during the forecast period. Rapid increase in population has resulted in increase in the consumption of agricultural products. Moreover, agricultural production is highly concentrated on countries such as the U.S, Brazil, Argentina, China, and India, which accounts for over 75% of import and export of various grains as minor bulk commodities. According to Coherent Market Insights’ analysis, global seaborne trade of grains crossed 453 million ton in 2015, whereas the wheat and coarse grain accounted for around 72% of the traded volume. Therefore, these factors are expected to propel the market growth in the near future.

Statistics:

Asia Pacific held dominant position in the global Bulk Terminals market in 2019, accounting for 49.9% share in terms of volume, followed by Europe and North America, respectively

Figure 1: Global Bulk Terminals Market Share (%) in terms of Value, By Region, 2019

Bulk Terminals Market - Impact of Coronavirus (Covid-19) Pandemic

Many governments around the globe such as India, Spain and Italy have imposed nationwide lockdown to prevent the spread of COVID-19 disease. For instance, India have imposed lockdown from 25 March to 1 May until the further notice. Lockdown resulted in the shortage of the workers at the ports. Due to the manpower shortage the ports are struggling to move the cargoes. Moreover, there is also shortage of transportation facilities such as Trucks and Trains. Owing to above mentioned factors, the COVID-19 pandemic is expected to restrain the market growth during the year 2020.

Market Dynamics- Restraints

  1. Strict regulatory policies and norms are expected to restrain growth of the global bulk terminals market during the forecast period

The terminal management and shipping industry involves high economic and human life risks. The bulk terminal operations may involve stevedoring of various unpacked materials, which may have volatile fumes or micro-particles that get mixed in air contaminating the environment, flammable or possess high risk of spoilage. Various governments and health and safety departments have set rules and regulations for their respective countries. For instance, European Union in 2001, mentioned rules for bulk terminals under “DIRECTIVE 2001/96/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL – establishing harmonized requirements and procedures for the safe loading and unloading of bulk carriers”.

  1. High capital investment and operational cost is expected to hinder the global bulk terminals market growth over the forecast period

Land conditions for establishing a bulk terminal requires a significant amount of investment since it needs a widespread rigid surface and reliable construction to accommodate heavy machines and distinguish bulk material. Furthermore, construction of a port or terminal involves land reclamation by depositing million tons of rocks, cement, and construction materials, in order to obtain elevated rigid surface in shallow water conditions. Thus, this huge investment can be a major concern for any government or company. Hence, these factors are expected to hinder the market growth in the near future.

Market Opportunities

  1. Constant inorganic strategies adopted by market players can provide major growth opportunities

Key players in the market are focused on agreements and contracts, in order to gain a competitive edge in the market. For instance, in January 2016, China Merchants Port Holdings Co. Ltd. entered into an agreement with Dalian Port Group to acquire 26.67% (1,180,320,000 H) of share, investing HK$4,331,774,400 (~ US$ 559 Mn). Dalian Port group mainly operates in oil & gas terminals, container terminals, automobile terminals, bulk terminals, and Ro-Ro terminals.

  1. Rising preference for floating terminals for liquid bulk can offer lucrative growth opportunities

Infrastructure cost associated with transportation of oil & gas is higher as compared to that of other commodities. The liquid bulks are preferably transported through large tanker vessels, which may require to undergo further regasification and processing. Several countries are resorting to set up floating terminals for storing oil & gas due to increasing demand for natural gas, especially LNG. These floating terminals comprise an onboard regasification unit and are capable of transporting and regasifying LNG.

Figure 2: Global Bulk Terminals Market Value (Mn Tons), 2017 - 2027

The global Bulk Terminals market was valued at 16,548.1 Mn Tons in terms of volume in 2019 and is forecast to reach a value of US$ 21,504.7 Mn by 2027 at a CAGR of 3.2% between 2020 and 2027.

Market Trends

  1. Rising automation in bulk terminals

The bulk terminal management requires great skills and a handful of resources in order to manage to the berth of vessels of different sizes, proper scheduling, fast loading and unloading of bulk material, proper storing, further delivery through train and trucks, commercial activity monitoring, workforce management, and several other tasks. The terminal automation is a major tread in liquid bulk terminals as it deals with high-risk environment and loading and unloading of various grade liquid bulks and delivering it in small vessels in a precise amount and maintaining high safety and security in operation.

  1. Increasing public-private partnerships (PPP) in ports

Majority of global trades are carried out via sea routes, hence well-functioning maritime transport is a key element in overall development of countries who participate in global trade. The port operation requires heavy manpower and equipment investments. As a result, several countries are adopting Public-Private Partnership (PPP), in which the operations and management responsibilities are delegated to private companies, while some land and assets remain with the government.

Competitive Section

Major companies involved in the global bulk terminals market are Thessaloniki Port Authority SA., Ultramar Group, Global Ports Investments PLC, Noatum Ports, S.L.U., Ports America, Inc., DP World Ltd., China Merchants Port Holdings Co. Ltd, Yilport Holding Inc., APM Terminals, HES International B.V., DaLian Port (PDA) Company Limited, Puerto Ventanas S.A., and Euroports Holdings S.à r.l.

Key Developments

  1. Major companies in the market are focused on contracts and agreements, in order to enhance the market presence. For instance, in June 2019, Ultramar Group entered into a transshipment agreement with Acron Group to transship over 1.2 million tpy of mineral fertilizers.
  2. Key players in the market are involved in mergers and acquisitions, in order to gain a competitive edge in the market. For instance, in November 2017, Noatum Maritime acquired a portfolio of multi-purpose bulk terminals from Noatum Ports.

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