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India port volumes fall in July : Nomura

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India witnessed port volumes slacking in July on the back of falling exports of chemical and engineering goods, according to an analysis of ports data by research firm Nomura.

 However, the value of imports remained steady, even as India imported the same amount of coking coal at a 40% decline in value. As per Nomura, overall, major Indian ports witnessed a 4% decline in volume in July, on a sequential basis.

 Adani Ports, the largest commercial ports operator in the country, also witnessed a 2% decline in this period, but its volumes continue to account for half of India’s major ports volume. While major port volumes stood at 63.4 million tonnes, Adani Ports alone accounted for 31.2 million tonnes.

 “Adani Ports has consecutively maintained >30 million tonnes run rate since May-22, and we expect it to range between 30 million tonnes and 35 million tonnes during 2HFY23F, owing to tailwinds in port activities. Thus, we estimate that Adani Ports volumes can exceed management guidance of 350-360 million tonnes for FY23F,” the report said.

Positives on the domestic logistics front:

Railways

On the domestic logistics front, the positive news has been reported with container volumes for July surging 19.7% year-on-year, and 2.6% sequentially.

 Although the overall import-export volumes declined 8% sequentially, railway export-import container volumes remained flat, suggesting that the government-owned service gained market share during July.

 Railways’ movement of key commodities like iron, cement, and coal was a mixed bag. In the period when India’s total iron ore imports rose 14%, the railways only saw only a 5.5% sequential rise in the movement of this commodity. On a year-on-year basis, this fell by 25%.

Rail movement of key commodities in July 2022Business Insider India / Flourish

As Nomura observes, truck utilization exhibited drastic improvement in July, with a sharp uptick in inter-state truck movement. Truck freight grew 51% year-on-year even as diesel prices rose a meager 3% in this period, suggesting improved profitability.

 “Fuel cost, as a percentage of freight, was below the three-year average, aiding profitability for trucks,” the report said.

LPG consumption improves 

 Despite a 30% surge, India’s overall LPG consumption witnessed an 8% year-on-year growth in July. LPG companies managed to meet the demand despite a 6.7% decline in imports.

 On closer inspection, it was noticed that the domestic LPG demand for July declined 1.7% from a year earlier, while commercial consumption surged 11%. One of the reasons behind this could be companies gradually requiring employees to return to offices.

 Overall, domestic gas prices in the period surged 26% from a year earlier, while commercial prices witnessed a 30% jump.

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