Overall - Country Selector | Castrol Global · Vietnam’s location, and improving trade conditions have also helped it climb the rankings of fastest growing natural products trading

1 | Castrol Global Trade Barometer

Overall

Castrol Global Trade Barometer

2015

The Castrol Global Trade Barometer provides a detailed and pragmatic view of what is mined, made and moved internationally to support decision-making based on what is really happening on the ground


Overall

Castrol lubricants are in everything that is ‘Mined, Made and Moved’. Our global reach in the automotive manufacturing, marine, natural products, aerospace and industrial sectors means that we have a unique view of world trade.

This Castrol Global Trade Barometer (CGTB), the second economic study in the series, gives our view on what is mined, made and moved internationally. It tracks the performance and outlook of global trade and provides a rolling five year forecast of future trade patterns at a regional and sector level, based on data from the world’s 50 largest trading nations.

The overall CGTB report gives the big picture view of world exports and imports highlighting the largest and fastest growing nations. We then take an in-depth look at the following five sectors, offering actionable and relevant insight based on the latest economic data:

1. The Aerospace Trade Barometer

2. The Automotive Trade Barometer

3. The Industrial Trade Barometer

4. The Marine Trade Barometer – incorporating The Castrol Global Port Report

5. The Natural Products Trade Barometer

We hope you enjoy reading the latest update, incorporating Castrol’s unique ‘eye views’. To find out more, please download the full document at www.castrol.com /minedmademoved

Castrol Thought Leadership and Insights Team

The upper hand


Overall

The Castrol Global Trade Barometer (CGTB) finds that regional supply chains are becoming increasingly important to global trade, despite the slow pace of growth for trade more generally since 2011. Both strong performing and fast growing nations are benefitting from their geographic position. Many are also looking to capitalise on this natural advantage by positioning themselves as key trade hubs, in increasing competition with their neighbours, by investing in infrastructure, innovation and local relationships.

Vietnam performs particularly strongly in the overall CGTB due to its geographic location and relationship with China (see ‘Country Focus: Vietnam’).

Vietnam’s location, and improving trade conditions have also helped it climb the rankings of fastest growing natural products trading nations in the Natural Products Trade Barometer. Similarly, South Korea, as an Asian trade hub, is growing at a rapid rate for natural products due to its position close to China and at the centre of key trade routes including the North American route, the Southeast Asian route, and the European route.

A combination of its location, close to the Middle East and North Africa, and a commitment to innovation and development has also seen Dubai enter the table of top twenty ports by volume in the Global Port Report. This is also the result of decisive efforts by the UAE to develop a trade hub by improving infrastructure, enabling business and promoting trade. Canadian ports, Vancouver and Montreal, also appear as fastest growing ports for the first time, reflecting faster growing trade in the North American Free Trade Area generally.

Mexico’s automotive output is also benefitting from the growth of a Latin American supply chain, according to the Automotive Trade Barometer. The country’s liberal free trade agreements with forty-four countries make it a crucial export base for automakers from Europe, China, Japan and the US.

Although global trade may be growing at a slow rate, the future looks bright, particularly for emerging nations while established trading nations continue to dominate in many areas of the CGTB. The US and Europe perform particularly strongly in the Aerospace Trade Barometer as they have well-established global supply chains and trade partnerships in place. However, the Seychelles also appears as a fast growing aerospace exporter for the first time. Again, this is likely due to location and its proximity to India and China, as well as its proactive efforts to grow its science and technology experience and capabilities.

Placed to win: The destination game


Overall

Figure 1 The CGTB fast lane: Top ten fastest growing trading nations by CAGR* 2014 – 2019

1 | Iraq 9.79%

2 | Vietnam 9.70%

3 | Qatar 9.55%

4 | Indonesia 8.46%

5 | Brazil 8.14%

6 | UAE 8.05%

7 | Hong Kong 7.95%

8 | Australia 7.89%

9 | Saudi Arabia 7.80%

10 | South Africa 7.80%

* CAGR = annualised growth over five years 2014-2019


Overall

Figure 2 The CGTB race: Top ten fastest growing exporters by CAGR* 2014 – 2019

Figure 3 Bringing in growth:

Top ten fastest growing importers

by CAGR* 2014 – 2019

9.63% Vietnam | 1

9.59% Iraq | 2

9.31% Indonesia | 3

8.90% Brazil | 4

8.72% China | 5

8.37% Thailand | 6

8.34% Chile | 7

8.24% Hong Kong | 8

8.07% Venezuela | 9

8.02% India | 10

1 | Qatar 10.69%

2 | Iraq 9.88%

3 | Vietnam 9.77%

4 | UAE 8.82%

5 | Australia 8.33%

6 | Romania 8.28%

7 | South Africa 7.92%


9 | Seychelles 7.74%

10 | Indonesia 7.71%



Overall

There is significant competition among the world’s top trading nations, particularly global exporters.

Russia appears in the list of top ten trading nations for the first time, knocking Canada from tenth position. This is due to Russia’s access to raw materials, low labour and production costs, and its close proximity to Europe and China.

There is also substantial movement in the table of top ten exporters by value (figure 8). The US has overtaken Germany as the second largest exporter due to a significantly improved growth forecast as well as the strength of the dollar against the euro (likely affecting the dollar value of total exports).

Canada also appears to be on the ascent, having overtaken the UK as the tenth largest exporter (figure 8). Meanwhile, Russia has moved from eighth to sixth position in the same table (figure 8).

However, the top ten largest trading nations by value in the overall CGTB remain largely unchanged (figure 7). China is in first place, followed by the US and Germany.

China, as the world’s largest trade partner, dominates on the global stage while Germany continues its run as the export powerhouse of Europe, specialising particularly in high-end manufacturing and exports of cars.

China – as an economic superpower – still ranks as the largest exporter in the world, topping the table of top ten exporters by value (figure 8) and dominating in its exports of electronics. This is expected to continue, with a healthy annualised growth rate of 6.98% over the next five years, an increase from 5.60% forecast over the same period in the last CCTB. This rapid rate of growth is based on the fact that China manufactures much of the world’s material goods, benefitting from its vast labour force and low production costs.

Challenge at the top

1 | VietnamAutomatic data processing

machines (computers) $1.68bn

2 | USEquipment for photographic

laboratories $1.13bn

3 | JapanEquipment for photographic

laboratories $1.06bn

4 | SingaporeEquipment for photographic

laboratories $550.73m

5 | UkraineRetort carbon, coke or semi-

coke of coal, lignite, peat $365.95m

6 | IndonesiaBituminous mix, mastic from

asphalt, bitumen/tar/pitch $283.91m

7 | RussiaGold, unwrought, semi-

manufactured, powder form $196.94m

8 | NetherlandsEquipment for photographic

laboratories$196.82m

10 | GermanyEquipment for photographic

laboratories$164.00m

9 | AustraliaNickel plates, sheets,

strip and foil$165.20m

Figure 4 Producing the goods:

Top ten fastest growing export products by country by 2014 value


Overall

Figure 5 Importing success: Top ten importers by 2014 value

Figure 6 Bringing in the goods: Top ten import products by country by 2014 value

1 | US $1,974.12bn

2 | China $1,552.73bn

3 | Germany $1,227.65bn

4 | France $745.78bn

5 | Netherlands $724.75bn

6 | UK $675.43bn

7 | Hong Kong $646.92bn

8 | Japan $639.79bn

9 | Italy $533.20bn

10 | Canada $456.14bn

1 | US - Petroleum oils, oils from bituminous minerals, crude - $207.81bn

2 | China - Electronic integrated circuits and microassemblies - $136.84bn

3 | Netherlands - Oils petroleum, bituminous, distillates, except crude - $99.83bn

4 | China - Iron ores and concentrates, roasted iron pyrites - $98.62bn

5 | Netherlands - Petroleum oils, oils from bituminous minerals, crude - $97.34bn

6 | US - Motor vehicles for transport of persons (except buses) - $96.03bn

7 | US - Automatic data processing machine (computers) - $92.73bn

8 | US - Oils petroleum, bituminous, distillates, except crude - $80.25bn

9 | Hong Kong - Electronic integrated circuits and microassemblies - $76.89bn

10 | China - Petroleum oils, oils from bituminous minerals, crude - $74.59bn


Overall

Vietnam is fast becoming Asia’s great success story. The top ten fastest growing importers (figure 3) are primarily emerging economies with Vietnam in first place (moving up from second) followed by Iraq and Indonesia. Thailand and Venezuela also appear among the top ten fastest growing importers (figure 3) for the first time while Argentina, South Africa and Nigeria no longer feature. Vietnam’s import dominance is based largely on its geographic location and partnerships with nearby neighbours. As a result of the rise of a middle class and wage costs, there has been an increase in outsourcing of manufacturing in sectors such as semi-conductors. Vietnam often benefits from this outsourcing, which also explains its continuation as the third fastest growing export nation (figure 2).

In particular, Vietnam is building a reputation for manufacturing high-end technology and pharmaceuticals outsourced from China. Some high-tech goods are final consumer products while other high-tech imports are intermediate inputs into the ICT production process.

Around a third of Vietnam’s population now lives in cities and its youthful population and the rapid pace of urbanisation should provide an increasingly skilled workforce to help the country develop its foothold in global ICT. However, this will depend on increasing spending on R&D. Vietnam will also face the challenges of maintaining this talent pool and further strengthening its infrastructure.

Thailand’s introduction as sixth fastest growing importer (figure 3) is largely due to its rapid growth as a Southeast Asian trade hub. Like Vietnam, it is also used as a production base by neighbouring nations which is driving an increase in skills, wages and living standards, as well as boosting demand for imported goods.

Country focus: Vietnam


Overall

1 | China $4.29tn

2 | US $3.54tn

3 | Germany $2.76tn

4 | Japan $1.53tn

6 | Netherlands $1.28tn

7 | UK $1.12tn

8 | Italy $1.06tn

9 | South Korea $1.05tn

10 | Russia $0.97tn

5 | France $1.36tn

Figure 7 Powerhouses of trade: Top ten trading nations by 2014 value


Overall

As a result of continued economic and infrastructural development, emerging economies also continue to dominate the list of top ten fastest growing exporters (figure 2). The top three fastest growing export traders are Qatar, Iraq and Vietnam, all of which have experienced strong growth since the last CGTB. The continuing dominance of the energy sector is apparent in the concentration of Middle Eastern countries to the top of the fastest growing exporters list (figure 2).

There is a lot of movement at the bottom of the table of top ten fastest growing exporters (figure 2). The lowest three countries in the last CGTB, Switzerland (eighth

Tough competitionplace), India (ninth place) and Brazil (tenth place) have all dropped out. They have been replaced by South Africa (now seventh), Saudi Arabia (eighth), and Seychelles (ninth). This improvement by the Seychelles is likely to because of its geographic location close to India and China as well as its growing science and technology sector.

Despite competition from emerging economies and Asia, Europe is holding its own. Five European countries feature in the top ten trading nations by value – Germany third, France fifth, Netherlands sixth, UK seventh and Italy eighth (figure 7).

1 | China | $2,736.72bn

2 | US | $1,567.10bn

3 | Germany | $1,529.55bn

4 | Japan | $885.64bn

5 | France | $614.45bn

6 | Russia | $610.39bn

7 | South Korea | $602.47bn

8 | Netherlands | $552.88bn

9 | Italy | $531.65bn

10 | Canada | $458.65bn

Figure 8 Exporting success:

Top ten exporters by 2014 value


Overall

Overall picture: World trade growth

There has been an improvement in the expected five year growth rate for the aggregated CGTB. Since the previous forecast, the predicted annualised growth rate has increased from 4.4% to almost 6%. Whilst this is a substantial improvement, it reflects a predicted pickup in 2017 rather than expected rates of trade growth over the next couple of years.

The relatively modest growth rates between 2014-2017 reflect the current weakness in the global economy and the slow pace of growth for trade since 2011. Rapid growth between 2009 and 2011 is indicative of a bounce back following the post-financial crisis, and the significant acceleration of trade between emerging economies.

Since 2011, world trade growth has decelerated and decoupled from GDP growth. Prior to 2011 it was accepted that trade would grow at roughly twice the rate of global GDP growth, but this has not been the case in recent years.

The barometer forecasts a mild acceleration between 2015-2016 and 2017-2018, with growth picking up substantially by 2018. This growth is still not as fast as the immediate post-crisis recovery, but represents a brighter outlook for trade in the future.

Castrol eye view:

Open for export In many ways, the strong performance of Europe, although growing at a slow rate, is unsurprising as it has an existing foothold in international trade. However, even during the recent economic downturn, European nations pushed ambitious trade agendas, continuing to promote open trade at home and abroad.

In fact, Britain’s export performance was actually stronger during the economic downturn than in the ten years previous. Net trade (exports minus imports), which was holding back growth, reversed during the recession and subsequent recovery.

Similarly, many emerging economies have now set their sights on trade success and continue to grow at a rapid rate, although from a lower base than established trading nations.

Overall



Overall

The Castrol Global Trade Barometer (CGTB) and its sub-barometers are constructed from the sectoral trade flows between the world’s 50 largest trading nations. The CGTB is an aggregate barometer of all trade across all sectors. Each sub-barometer measures the trade flows between countries for a particular sectoral grouping.

The barometer measures how trade and trade growth in goods has changed up to the end of the last quarter. It is also a forecast of how that barometer is expected to change over the next five years on a rolling basis, with the next four quarters forecast on a quarterly basis, and the subsequent four years forecast on an annual basis.

In contrast to trade forecasts based on the drivers of GDP, the CGTB is built upon the key drivers of global trade itself, including trade trends, relevant macroeconomic and market influences (such as GDP, oil prices, inflation and foreign direct investment), and the effect of the business environment on trade (such as regulation, demographics and access to capital and finance). This gives us deep, accurate and actionable insight into the nuances of global trade in the near term. By taking into account the drivers of global trade we are able to give a pragmatic view providing market intelligence to support decision-making based on what is really happening on the ground.

The forecasts within the CGTB are based on investment grade data covering 200 countries and 10,000 sectors worldwide. The data is interpolated from UN Comtrade, IMF, ITC and country statistical office data. Forecasts for annual and annualised growth are based on 20 parameters that cover short, medium and long-term drivers of trade. Data for these parameters is taken from international sources including Haver Analytics, Bloomberg, UNCTAD, WTO, IMF, ILO and the World Bank. The barometer is independent of political and behavioural factors, except as priced in by markets.

About the Castrol GlobalTrade Barometer

1 | Aerospace Trade Barometer

Aerospace

Aerospace Trade Barometer

2015



Aerospace

The Aerospace Trade Barometer is part of the Castrol Global Trade Barometer (CGTB), a composite measure of world trade, its growth and decline. By taking into account trade trends, relevant macroeconomic and market influences, and the effect of the business environment on trade, we are able to give a pragmatic view providing market intelligence to support decision-making based on what is really happening on the ground.

To find out more, please download the full document at www.castrol.com/minedmademoved

Established nations on autopilot

Aerospace

The list of top ten aerospace trading nations (figure 1) remains unchanged since the last forecast while the five-year growth outlook is optimistic. For example, the US’s growth forecast has increased from an annualised rate of 1.28% in the last CGTB to 3.68%.

The UK appears to be performing poorly in comparison to other global leaders in the sector such as those in mainland Europe and North America. Yet, this could change as aerospace companies return work to the UK from Europe, the US, China and Latin America based on reduced logistics costs and a perception of better quality.

France, which last time occupied the ninth and tenth spot in the table of aerospace export products by country for ‘aircraft parts’ (figure 5) has been replaced by Germany’s exports of ‘turbo-jets and aircraft parts’, reflecting Germany’s high-end manufacturing capability.

The outlook is also positive for the US in terms of its position in the table of top ten aerospace export products by country (figure 5). The country’s annualised growth rate was expected to contract by -7.97% annually over the next five years. However, this forecast indicates that US exports of turbo jets are actually expected to increase by 4.97% over the same period, highlighting the buoyant trend for exports from the country.

Trend one: Turbulent skies ahead


Aerospace

Figure 1 The aerospace power list: Top ten aerospace trading nations by 2014 value

4 | UK $34.80bn

5 | China $19.80bn

6 | Canada $18.47bn

7 | Japan $12.84bn

8 | Singapore $11.41bn

9 | UAE $9.62bn

10 | Italy $8.59bn

1 | US $165.37bn

2 | France $97.61bn

3 | Germany $72.54bn

Aerospace


Figure 2 Exporting success: Top ten aerospace exporters by 2014 value

Figure 3 Aerospace consumption: Top ten aerospace importers by 2014 value

1 | US $116.75bn

2 | France $64.44bn


4 | UK $26.57bn

5 | Canada $15.97bn

6 | Japan $9.73bn

7 | Italy $6.28bn

8 | China $4.39bn

9 | Brazil $3.24bn

10 | Seychelles $3.14bn

1 | US $48.62bn

2 | France $33.17bn


4 | China $15.41bn

5 | UAE $8.36bn


7 | UK $8.23bn

8 | Russia $5.80bn


10 | India $5.02bn

Aerospace


Aerospace

In many ways, very little has changed amongst the top ten aerospace trading nations (figure 1) and developed nations remain at the forefront. The US and Europe in particular continue to dominate the Aerospace Trade Barometer as they produce aircraft domestically and have well-established global supply chains and trade partnerships in place. Europe alone accounts for 70% of all aviation exports globally.

However, there has been some movement at the top. Argentina was the sixth fastest growing country in the last Aerospace Trade Barometer but has now dropped out of the table of top ten fastest growing aerospace trading nations (figure 4). This may be because its economic growth is expected to contract by 1.3% this year. The unstable domestic environment caused by disagreements between domestic farmers and the Argentine Government may also have had an impact.

Meanwhile, China continues to rise up the table of top ten aerospace exporters by 2014 value (figure 2) having moved from ninth to eighth position.

Switzerland, which made up the last spot in the list of top ten aerospace exporters in 2012 has been replaced by the Seychelles. This is likely to because of its proximity to India and China as well as its growing science and technology experience and capabilities.

Trend two: US and Europe coasting at the top

Figure 4 Aerospace fast lane:

Top ten fastest growing aerospace trading nations

by CAGR* 2014-2019

* CAGR = annualised growth over five years

2014-2019

1 | Vietnam | 12.78%

2 | Hungary | 11.61%

3 | Iraq | 10.93%

4 | Germany | 9.20%

5 | Philippines | 9.17%

6 | Romania | 9.04%

7 | Poland | 8.77%

8 | Indonesia | 7.84%

9 | Russia | 7.81%

10 | Malaysia | 7.80%


Aerospace

Hungary is now the second fastest growing aerospace trading nation (figure 4) having been fourth in the previous forecast. It sits behind Vietnam in first place and ahead of Iraq in third. It is growing significantly with growth forecast to increase from 8.47% annually over the next five years to 11.61%.

Hungary has made a clear commitment to the aerospace industry since political changes in the 1990s, founding the

Hungarian Aviation Industry Foundation (HAIF) in 2003. However, it is also likely benefitting from the growth of its neighbour, Germany.

Elsewhere in the table, Malaysia has replaced Egypt as the tenth fastest growing aerospace trader (figure 4), suggesting further relocation of manufacturing of aviation components from China to other, cheaper locations.

Trend three: Emerging aerospace nations gaining altitude

1 | USTurbo-jets, turbo-pro-

pellers/other gas turbine engines

$50.16bn

2 | FranceAircraft, spacecraft,

satellites $43.07bn

3 | USAircraft, space-craft, satellites

$39.24bn

8 | UKTurbo-jets, turbo-

propellers/other gas turbine engines

$12.09bn

9 | GermanyTurbo-jets, turbo-


$10.03bn

7 | FranceTurbo-jets, turbo-


$12.93bn

4 | USParts of aircraft,

spacecraft $26.78bn

6 | UKParts of aircraft,

spacecraft $13.37bn

5 | GermanyAircraft, space-craft, satellites

$21.48bn

10 | GermanyParts of aircraft,

spacecraft $9.32bn

Figure 5 Producing the goods: Top ten aerospace export products by country by 2014 value


AerospaceAerospace

Figure 6 Bringing in growth: Top ten aerospace import products by country by 2014 value

2 | FranceAircraft, spacecraft, satellites

$18.50bn

1 | USTurbo-jets, turbo-propellers/

other gas turbine engines$26.61bn

6 | GermanyTurbo-jets, turbo-propellers/


8 | SingaporeTurbo-jets, turbo-propellers/


10 | ChinaTurbo-jets, turbo-propellers/


3 | GermanyAircraft, spacecraft, satellites

$17.51bn

7 | ChinaAircraft, spacecraft, satellites

$7.77bn

9 | USAircraft, spacecraft, satellites

$5.30bn

4 | USParts of aircraft, spacecraft

$16.41bn

5 | FranceParts of aircraft, spacecraft

$12.31bn


Aerospace

Overall picture: Aerospace trade growth

Since the last Aerospace Trade Barometer, forecast growth is predicted to double from 2% to 4.3% over the next five years.

Whilst the aerospace sector experienced significant and relatively stable growth after the financial crisis, with an increase in global value terms from $286 billion in 2001 to $577 billion in 2012, the barometer suggests net declines from 2013 forecast until 2016. The reason for this drop may be the weak global trade environment and its subsequent effects on airfreight.

The growth lag identified in the last CGTB will continue for the next three years with a pick up in 2017-2018. It certainly won’t be blue skies for many nations as annualised growth in France and the UK is forecast to decline – France by 8.31% between 2018-2019 and the UK by 4.85% over the same period.

As the largest aerospace trader, global patterns of trade roughly follow those of the US. Although US trade in aerospace is expected to decline over the next couple of years, the barometer predicts significant accelerations in growth for countries that are beginning to manufacture high-end products, such as Vietnam, Hungary and Iraq.

Castrol eye view: Germany flying high Germany’s increasing investment in the aerospace sector will help it to improve its global positioning over the next five years, cementing it as a top trading nation by both value and speed of growth. Several large aerospace companies are already based in the country including Airbus Deutschland, MTU Aero Engines, Rolls-Royce Deutschland and Liebherr-Aerospace Lindenberg. This gives the country a huge amount of influence on the wider industry.

As a large German employer, Rolls Royce in particular plays a leading role in engine partnerships with other German companies, as well as utilising an extensive supply chain across the nation. Through their strong ties with Cottbus, Dresden, Darmstadt and Karlsruhe universities, the company is also investing heavily in its skills base and technology training for German students.



Aerospace


The Aerospace Trade Barometer measures how trade and trade growth in goods has changed up to the end of the last quarter. It is also a forecast of how that barometer is expected to change over the next five years on a rolling basis, with the next four quarters forecast on a quarterly basis, and the subsequent four years forecast on an annual basis.


The Aerospace Trade Barometer covers all goods sectors and sub-sectors related to aerospace including turbo-jets, aircraft, spacecraft and satellites, aircraft parts, instrument panel clocks, and gliders.

The forecasts within the CGTB are based on investment grade data covering 200 countries and 10,000 sectors worldwide. The data is interpolated from UN Comtrade, IMF, ITC and country statistical office data. Forecasts for annual and annualised growth are based on twenty parameters that cover short, medium and long-term drivers of trade. Data for these parameters is taken from international sources including Haver Analytics, Bloomberg, UNCTAD, WTO, IMF, ILO and the World Bank. The barometer is independent of political and behavioural factors, except as priced in by markets.


Aerospace

1 | Automotive Trade Barometer

Automotive

Automotive Trade Barometer

2015



Automotive

The Automotive Trade Barometer is part of the Castrol Global Trade Barometer (CGTB), a composite measure of world trade, its growth and decline. In contrast to trade forecasts based on the drivers of GDP, the CGTB is based on the key drivers of global trade itself, giving us deep, accurate and actionable insight into the nuances of global trade in the near term. By taking into account trade trends, relevant macroeconomic and market influences, and the effect of the business environment on trade, we are able to give a pragmatic view providing market intelligence to support decision-making based on what is really happening on the ground.


Emerging nations switch up a gear

Emerging economies continue to make an impact in the Automotive Trade Barometer. Yet, the top three trading nations in the last forecast remain in pole position, with Germany in first place, the US in second, and Japan in third (figure 1).

Interestingly, Mexico’s automotive output has soared, assisted by a growth in investment from foreign carmakers including Honda, Mazda and Nissan. The country’s liberal free trade agreements with forty-four countries make it a crucial export base for automakers from Europe, China, Japan and the US.

Aside from Canada maintaining its position in seventh, the top ten trading nations have changed significantly. China and Mexico have both climbed the rankings, with China rising from fifth to fourth place, and Mexico jumping three places from ninth to sixth (figure 1).

Emerging nation South Korea has appeared in the rankings for the first time, placing ahead of Italy in ninth position (figure 1). Its strategic location and close proximity to automotive powerhouse China has helped it to compete with traditional trading nations.

Despite Germany’s strong performance, European countries are lagging in the Automotive Trade Barometer. Belgium and Spain, previously the ninth and tenth largest importers of automotive products no longer appear in the table of top ten importers (figure 2), whilst Italy, the UK and France have all dropped down the table. This is likely the result of the continued economic issues facing many European countries.

Despite Spain starting to see recovery in its automotive manufacturing, it does not appear in the top ten automotive trading nations (figure 1). However, the outlook in Belgium looks even less optimistic, with automotive plants closing and relocating to other trading nations.

Trend one: Engines of growth


Automotive

Figure 1 The automotive power list: Top ten automotive trading nations by 2014 value


2 | US $270.92bn

3 | Japan $181.13bn

4 | China $124.92bn

6 | Mexico $109.83bn

7 | Canada $95.36bn

8 | UK $90.63bn

9 | South Korea $73.22bn

10 | Italy $65.56bn



Automotive

Figure 2 Automotive consumption: Top ten automotive importers by 2014 value

1 | US$160.45bn

2 | Germany$108.38bn

3 | China$77.63bn

4 | France$71.69bn

5 | Canada$56.77bn

6 | Russia$52.80bn

7 | UK$49.13bn

8 | Australia$33.43bn

9 | Mexico$30.70bn

10 | Brazil$30.23bn


Automotive

Automotive powerhouse Germany remains the largest exporter in the automotive barometer, but China has emerged as the major global player. It has risen from eighth to sixth place in the table of top ten automotive exporters (figure 3) since the last forecast, and is nipping at the heels of established markets such as Germany, the US and Japan.

China has also risen from sixth to third in the table of top ten automotive importers (figure 2), reflecting the importance of exports of cars (in order to produce cars, car parts must be imported). Confidence in China as an emerging major player is demonstrated by Volvo’s commitment to being the first to export ‘Made in China’ cars to the US.

Imports of cars to China appear in fourth place in the list of top ten automotive import products by country (figure 4), moving from eighth position in the last forecast. However, the country’s strong import performance could be a result of worsening economic conditions within Europe. This would lead to lower demand and therefore slower automotive sector import growth, rather than acceleration in expected growth levels.

Trend two: China in the driving seat

10 | Canada $38.59bn

9 | Spain $40.89bn

8 | UK $41.50bn

7 | France $42.38bn

6 | China $47.29bn


4 | Mexico $79.13bn

3 | US $110.47bn

2 | Japan $164.11bn


Figure 3 Exporting success: Top ten automotive exporters by 2014 value


Automotive

Figure 4 Bringing in growth: Top ten automotive import products by country by 2014 value


Top ten automotive export products by country by 2014 value

$165.75bn - Motor vehicles for transport of persons (except buses) - Germany | 1

$97.85bn - Motor vehicles for transport of persons (except buses) - Japan | 2

$65.40bn - Parts and accessories for motos vehicles - Germany | 3

$51.97bn - Motor vehicles for transport of persons (except buses) - US | 4

$46.28bn - Parts and accessories for motos vehicles - Japan | 5

$38.67bn - Motor vehicles for transport of persons (except buses) - South Korea | 6

$34.46bn - Motor vehicles for transport of persons (except buses) - Mexico | 7

$32.76bn - Motor vehicles for transport of persons (except buses) - Canada | 8

$32.67bn - Motor vehicles for transport of persons (except buses) - UK | 9

$25.00bn - Parts and accessories for motos vehicles - US | 10

1 | US - Motor vehicles for transport of persons (except buses) - $96.03bn

2 | Germany - Motor vehicles for transport of persons (except buses) - $50.15bn

3 | US - Parts and accessories for motor vehicles - $49.56bn

4 | China - Motor vehicles for transport of persons (except buses) - $47.17bn

5 | France - Motor vehicles for transport of persons (except buses) - $44.05bn

6 | Germany - Parts and accessories for motor vehicles - $41.87bn

7 | Russia - Motor vehicles for transport of persons (except buses) - $29.26bn

8 | UK - Motor vehicles for transport of persons (except buses) - $28.70bn

9 | China - Parts and accessories for motor vehicles - $26.89bn

10 | Canada - Motor vehicles for transport of persons (except buses) - $24.75bn


Automotive

Whilst Germany remains the largest exporter of cars and car parts, Mexico has risen to become the seventh largest exporter of cars, supporting its emergence as a production hub for automotive manufacturing. Mexico is expected to experience strong growth in exports of cars over the next five years at an annualised rate of 7.11%.

The growth of Latin American production hubs is reflected in the appearance of Mexico and Brazil as the ninth and tenth largest automotive importers (figure 2). Growth in these Latin American countries will be consistently high over the next five years, forecast at 9.33% for Brazil. This reflects the continued improvement of the Latin American economy and significant total trade growth of 4.42% expected this year.

Similarly, Mexico is enjoying a manufacturing boom due to its proximity to the US, its lower costs of production, and its skilled workforce. By supplying established economies, the country continues to tap into Latin American regional supply chains, and raise its own status as an automotive manufacturing hub.

Whilst Spain, previously the seventh largest exporter of cars in the last forecast, has slipped out of the top automotive export products by country, the US has entered the rankings at number ten for its exports of car parts (figure 5).

Trend three: Regional pit stops


Automotive

Overall picture: Automotive trade growth

Since the last Automotive Trade Barometer, the forecast growth rate for the sector has improved and is predicted to increase from 2.2% to 4.7% over the next five years. The growth forecast for 2015 has also risen from -0.04% to 0.82%, as a result of a slight improvement in the trade environment.

Although automotive trade has more than doubled in value terms since 2001, it has been growing at a slower rate since the financial crisis. The Automotive Trade Barometer valued the sector at $2.4 trillion in 2013, yet this fell nearly $1 billion between 2013 and 2014.

The barometer forecasts net declines until 2016, when there will be a mild, but slow, pick up to 2019. This highlights the extent to which automotive trade is linked with the global health of the economy.

The growth rate for the industry is likely to remain slow as the increase in regional supply chains means that more cars are produced for domestic markets than abroad.

Castrol eye view: Chinese demand revving up China’s increasing economic prosperity, and developing middle class, is driving an appetite for premium brands and high quality vehicles.

Volvo, owned by China’s Zhejiang Geely Holding Group Co., has made a significant investment in the nation, and aims to begin shipping Chinese-made cars to American consumers in 2015. The automotive giant is set to open three new factories in China, suggesting that it certainly believes in the country’s automotive potential.



Automotive


The Automotive Trade Barometer measures how trade and trade growth in goods has changed up to the end of the last quarter. It is also a forecast of how that barometer is expected to change over the next five years on a rolling basis, with the next four quarters forecast on a quarterly basis, and the subsequent four years forecast on an annual basis.


The Automotive Trade Barometer is a “final goods” index and does not include sub-components and power trains. It includes goods relevant to end production including motor vehicles, road haulage vehicles, automotive parts and accessories, motorcycles, tractors and special purpose motor vehicles (for example ambulances and fire engines).



1 | Industrial Trade Barometer

Industrial

Industrial Trade Barometer

2015



Industrial

The Industrial Trade Barometer is part of the Castrol Global Trade Barometer (CGTB), a composite measure of world trade, its growth and decline. In contrast to trade forecasts based on the drivers of GDP, the CGTB is based on the key drivers of global trade itself, giving us deep, accurate and actionable insight into the nuances of global trade in the near term.

By taking into account trade trends, relevant macroeconomic and market influences, and the effect of the business environment on trade, we are able to give a pragmatic view providing market intelligence to support decision-making based on what is really happening on the ground.


Levers of power

Europe and Asia dominate the Industrial Trade Barometer. In the last forecast we noted how expertise in consumer electronics had allowed Asia to become more integrated into global manufacturing supply chains. As a consequence the US and Europe were being out-performed.

However, this forecast shows stronger rates of growth for every western nation. This growth indicates that the US and Europe have “upped their game” in order to keep pace with Asia. Better trade performance generally has been driving this, particularly in the US. However, re-shoring also has a large part to play. Europe and the US have pulled back some of their manufacturing capacity in response to tightening operating conditions by long-term offshoring partners such as China.

The top industrial exporters by value (figure 3) are established industrial nations, China (first), Germany (second) and US (third). This is testament to the infrastructure, skills base and competitive nature of these countries. The top three industrial exporters are also the top three importers by value (figure 4). However, the US ranks first and is expected to experience 5.38% growth compared to 3.24% in the last forecast.

Germany also appears in the table of top ten export products by country (figure 5) in this year’s forecast at the expense of Japan. However, the forecast rates of growth in the short term are expected to be flat or negative. Higher growth in medicaments is only likely to be seen in the medium term.

Only three countries feature in the rankings for top import products by country (figure 2): China, Hong Kong and the US. This reflects the enormous levels of demand for high-end manufactured products in these nations. Their forecast annualised growth rates to 2019 indicate that this demand will remain high for the foreseeable future.

Trend one: Western industrial machines


Industrial

Figure 1 Industrial machines: Top ten industrial trading nations by 2014 value

1 | China $2,313.51bn2 | US $1,500.83bn 3 | Germany $1,202.93bn 4 | Japan $693.01bn 5 | South Korea $502.39bn 6 | France $495.04bn 7 | Hong Kong $430.55bn8 | Netherlands $405.60bn9 | Italy $391.72bn 10 | UK $366.29bn


Industrial

Figure 2 Leading parts: Top ten industrial import products by country by CAGR* 2014-2019

1 | Hong KongRadio and TV transmitters, television cameras

10.22%

4 | ChinaElectric apparatus for line telephony, telegraphy

8.46%

5 | Hong KongElectric apparatus for line telephony, telegraphy

8.11%

7 | USElectric apparatus for line

telephony, telegraphy

7.49%

6 | Hong KongAutomatic data processing

machines (computers)

7.61%

8 | USAutomatic data processing

machines (computers)

6.67%

10 | USMedicaments, therapeutic,

prophylactic use, in dosage

4.47%

3 | Hong KongElectronic integrated circuits and microassemblies

8.98%

9 | ChinaElectronic integrated circuits

and microassemblies

6.60%

2 | ChinaLiquid crystal devices, lasersoptical applicances

9.72%

Industrial



Industrial

The table of top ten fastest growing industrial nations (figure 6) highlights the continued diversification in industrial sectors. The fact that none of the top ten countries is in Europe or North America is indicative of how competitive the industry has become.

Asian growth comes from high-tech manufacturing of cars, electronics and textiles. Meanwhile, in the Middle East, the UAE is one of the more industrially diverse countries producing significant aluminium and steel as well as oil.

Since the last forecast, both Romania and Slovakia have fallen out of the table of fastest growing industrial nations (figure 6) while Chile and Brazil continue to show strong signs of growth. They have risen from fourth and seventh to third and sixth, respectively. Although Argentina has slipped to tenth, its annualised growth is forecast to remain strong at 7.22% compared with 6.22% in the last forecast.

Trend two: Industrial evolution

Figure 3 Exporting success: Top ten industrial exporters by 2014 value

Figure 4 Importing success:

Top ten industrial importers by 2014 value

1 | China $1,594.64bn


3 | US $686.41bn

4 | Japan $478.37bn



7 | Italy $230.19bn

8 | Mexico $182.30bn


10 | UK $169.23bn

$814.42bn US | 1

$718.88bn China | 2

$475.12bn Germany | 3

$405.15bn Hong Kong | 4

$249.74bn France | 5

$223.81bn Netherlands | 6

$214.64bn Japan | 7

$197.06bn UK | 8

$172.98bn South Korea | 9

$169.19bn Canada | 10


Industrial

Figure 5 Producing the goods:

Top ten industrial export products by country by 2014 value

$246.74bn China | 1

$145.38bn China | 2

$144.07bn China | 3

$87.80bn South Korea | 4

$77.16bn China | 5


$59.59bn Malaysia | 7

$55.27bn China | 8

$54.04bn China | 9

$51.16bn China | 10

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Industrial

The challenge of keeping the balance in world growth is transferring to emerging economies, particularly China. Given China’s strong forecast growth rate, it is no surprise that it tops the ranking of top ten exporters by value (figure 3). Its strength in the industrial sector is almost exclusively due to its exports of electronics.

Mexico has moved up two places to eighth in the table of top ten exporters by value (figure 3).

Asian nations are showing the strongest levels of growth amongst the top ten importers by value (figure 4). The majority of these imports are in pharmaceuticals and biopharmaceuticals. As the economies of Asia continue to develop and living standards improve, so the demand for higher-end healthcare increases. Europe specialises in pharmaceutical products and therefore increasing demand from Asia accounts for the increase in exports in this sector in Europe.

Asia, with China in particular, also dominates the table of top ten export products by country (figure 5). China features seven times, with strong growth forecast in the majority of sectors. This is illustrative of how China is moving up the value chain. However, a slightly lower annualised growth rate for China’s exports of computers, at 8.77% compared with 10.19% last forecast, is to be expected. As China puts more focus into domestic consumption, rather than exports, we can expect to see lower rates of growth in the short and medium term.

Trend three: China manufacturing growth


Industrial

Figure 6 Industrial fast lane: Top ten fastest growing industrial trading nations by CAGR* 2014-2019

1 | Vietnam 11.56%

2 | Iraq 9.40%

3 | Chile 8.10%

4 | Indonesia 7.99%


6 | Brazil 7.72%

7 | China 7.72%

8 | India 7.56%

9 | UAE 7.32%

10 | Argentina 7.22%

Vietnam



Industrial

Overall picture: Industrial trade growth

The outlook for the industrial sector has improved in the Industrial Trade Barometer as a result of more positive trade conditions. The annualised forecast growth rate has increased from 4.3% in the last report to a predicted 5.7% over the next five years.

Despite a contraction after the 2008 financial crisis, industrial sectors have achieved sustained growth, with values almost tripling between 2001 and 2014 from $4 trillion to over $13 trillion. Growth is expected to increase at a steady pace over the next five years, with an annualised rate of 5.68% in contrast to the lackluster global trade environment.

Growth will be driven by the largest trading nations such as China, the US and Germany, each of which have long-established presences in industrial trade. Additionally, growth will come from countries keen to be recognised as trade hubs for industrial sectors such as Vietnam, Chile, Brazil and India.

Castrol eye view: Building blocks of growth Something of an unsung hero, South Korea has experienced rapid growth and significant development over the last half century. As part of this, automobiles, electronics and heavy-industrial products make a significant contribution to its exports market and Chinese factories now rely on South Korean machinery for their operation.

Indeed, during the past two decades, South Korea and China have significantly advanced diplomatic, political, cultural and economic relations, which have been driven by expanding bilateral economic cooperation. The China–South Korea Free Trade Agreement aims to remove most barriers to trade between the countries. With China and South Korea two of the world’s largest exporters, a trade link will be key for the region’s economic growth.


Industrial


Industrial


The Industrial Trade Barometer measures how trade and trade growth in goods has changed up to the end of the last quarter. It is also a forecast of how that barometer is expected to change over the next five years on a rolling basis, with the next four quarters forecast on a quarterly basis, and the subsequent four years forecast on an annual basis.


The Industrial Trade Barometer measures trade flows in general manufactured goods such as pharmaceuticals, electronics and machinery. Remaining finished goods are included within the other sub-barometers. For example, automotive parts and accessories sit within the Automotive Trade Barometer, while wind turbines (represented by ‘electrical energy’) are included in the Energy Barometer.



1 | Marine Trade Barometer

Marine

Marine Trade Barometer

2015



MarineMarine

The Marine Trade Barometer gives us a unique insight into the performance and outlook of shipbuilding and can be considered a strong indicator of general manufacturing and the wider health of the world economy.

The barometer examines the relative performance of different nations in the shipbuilding industry by tracking the manufacture of goods and components used in shipbuilding.

The Marine Trade Barometer and the Castrol Global Port Report are part of the Castrol Global Trade Barometer (CGTB). By taking into account trade trends, relevant macroeconomic and market influences, and the effect of the business environment on trade, we are able to give a pragmatic view providing market intelligence to support decision-making based on what is really happening on the ground.


China: Tides of change

The Marine Trade Barometer reflects the continued importance of the Asia-Pacific region in shipbuilding. Hong Kong has climbed the table of ship parts trading nations by 2014 value (figure 1), moving from fourth to second and pushing South Korea and China to third and fourth respectively. This movement is likely a reflection of Hong Kong’s maritime service expansion and reputation as a highly efficient port.

In many ways, there has been very little change in the rankings of top ten exporters of ship parts (figure 2) since the last forecast. The biggest shift has been China’s move to replace South Korea at the top of the table. However, this is unsurprising given that eight of the world’s ten largest ports are in China.

This hints at a conflict within China, as it struggles to balance its extrovert status and its introvert goals. China’s pivot away from export-led growth towards domestic consumption may have resulted in a dip in this year’s forecast to 8.08% from 10.05% in the last report. This ‘rebalancing’ emerged as a key government policy in the mid-2000s and has led to a wide set of reforms aimed at creating sustainable growth for China as well as social and political stability for its people.

Yet, the entire Asia-Pacific region continues to dominate the table of top ten export products by country (figure 4) with seven of the top ten coming from the region. This is indicative of Asia-Pacific’s booming shipping industry and growing expertise in high-end manufacturing. In order to maintain these growth levels, the region will need to focus on building and strengthening relationships and partnerships.

Trend one: Drifting priorities for China


Marine

Figure 1 The shipbuilding power list: Top ten ship parts trading nations by 2014 value




4 | China $16.36bn

5 | US $11.29bn


7 | Norway $8.86bn

8 | UK $6.47bn

9 | Italy $4.93bn



Marine

Figure 2 Exporting success: Top ten exporters of ship parts by 2014 value

Figure 3 Bringing in the goods: Top ten importers of ship parts by 2014 value

1 | China $15.64bn



4 | US $3.52bn

5 | Japan $2.88bn

6 | Germany $2.56bn

7 | Norway $1.79bn

8 | Italy $1.67bn


10 | UK $1.57bn



3 | Germany $7.94bn

4 | US $7.78bn

5 | Norway $7.07bn

6 | UK $4.91bn


8 | Brazil $3.40bn

9 | Italy $3.26bn


Marine


Marine

Figure 4 Bringing in growth: Top ten export products by country by 2014 value

1 | China $12.73bn




5 | US $1.84bn

6 | Germany $1.76bn

7 | Japan $1.46bn


9 | China $1.13bn

10 | US $1.13bn

Passenger and goods transport ships, boats


Special purpose ships, vessels





Tugs and pusher craft


Yachts, pleasure, sports vessels, rowing boats, canoes


Marine

Perhaps most interestingly, Algeria has risen from outside of the top ten fastest growing ship parts trading nations (figure 5) to top the table. This is likely to be the result of heavy investment in the country’s port capacity as well as wider infrastructure and skills development. Its close proximity to the EU, soaring energy trade and diplomatic ties with China are also likely to have played a part in its success.

Despite slipping to second place in the list of fastest growing trading nations (figure 5), Israel is also showing stronger rates of growth than the last forecast this is likely the result of greater efficiency and competition as a consequence of privatization and lower levels of government participation. The fastest growing ship parts trading nations are nations with strongly developing ports. However, Brazil’s rate of growth has slowed slightly since

the last forecast as a result of a stalling economy. As a consequence, it has fallen to third in our rankings.

Interestingly, the US has risen from seventh to fifth place in the top 10 ship parts trading nations (figure 1). This is based on the country’s success in honing specialist skills as evidenced by the US’s move into the top 10 export products by country (figure 3) for its production of ‘special purpose ships’. Yet, continuing labour disputes in west coast ports could be a potential threat to these rates of growth.

Singapore ranks first and fourth in the list of top ten import products by country (figure 5), specifically for its imports of ‘passenger, goods and special purpose ships’. This is indicative of its efforts to ramp up port capacities to fuel exports.

Trend two: Buoyed by innovation

Figure 5 Shipbuilding fast lane: Top ten fastest growing ship parts trading nations by CAGR* 2014-2019

1 | Algeria 17.45%

2 | Israel 15.86%

3 | Brazil 13.63%

4 | Mexico 12.51%

5 | Iran 11.89%

6 | Hong Kong 11.78%

7 | Venezuela 11.09%

8 | Indonesia 11.00%

9 | Iraq 10.74%

10 | Thailand 10.60%



Marine

Trend three: Choppy waters ahead for Europe

Figure 6 Bringing in growth: Top ten import products by country by 2014 value

Singapore looks set to retain its place at the head of the top ten import products by country (figure 6). However, European nations have suffered in the forecast. This downward movement is a reflection of the broader economic climate within Europe and weaker demand for ships due to Europe’s current surplus of shipping goods.

Although Germany still ranks third, its forecast growth has dropped dramatically to 4.24% from 3.95% last time. If this trend continues, Germany will fall to sixth in the rankings by 2019. Italy is also falling behind, possibly

based on the lack of sophistication of its ports and a perception that it is uncompetitive and inefficient. If the current trend continues it would fall out of the top ten exporters by value in the near future.

Similarly, European nations have slipped in the rankings of top ten import products by country (figure 6). Germany’s annualised growth rate is reduced at -4.73%, Norway is down to fifth from fourth place, and the UK has slipped from fifth to seventh position.

1 | SingaporePassenger and goods transport ships, boats

$18.90bn

9 | ItalyPassenger and goods transport ships, boats

$2.72bn

7 | UKPassenger and goods transport ships, boats

$3.92bn

6 | USPassenger and goods transport ships, boats

$4.16bn

5 | NorwayPassenger and goods transport ships, boats

$4.20bn

2 | Hong KongPassenger and goods transport ships, boats

$17.93bn

3 | GermanyPassenger and goods transport ships, boats

$7.31bn

4 | SingaporeSpecial purpose ships, vessels

$5.21bn

10 | USSpecial purpose ships, vessels

$2.45bn

8 | BrazilSpecial purpose ships, vessels

$2.97bn


Marine

Overall picture: Marine trade growth

The outlook for growth in the Marine Trade Barometer has deteriorated marginally in the period since the previous CGTB, with annualised growth forecast to fall from 7% to 6.6% over the next five years.

This, coupled with a drop in expected year-on-year growth, demonstrates the effects of dampened global trade on the marine sector. In practical terms, this means a slowdown in production for shipbuilders. However, the shipbuilding industry is often one step behind the world economy due to long lead times which create an ‘order to delivery lag’.

Despite this decline, growth is still expected at a reasonable rate of 3 to 5% annually, before picking up substantially after 2017. Although growing from a low base, fast growing Latin American countries such as Brazil, Mexico and Venezuala are set to play an increasing role in shipbuilding over the next five years.

Castrol eye view: Over supply Almost 90% of export goods are transported via ships, rather than by land or air. Despite this, the industry is still struggling as it experiences the effects of over supply and excess capacity created in a rush to build ships pre-recession. For example, over ordering seems to be an issue for Germany, Italy and the UK.


Marine


Marine

Castrol Global Port Report

2015


2 | Castrol Global Port Report

The Castrol Global Port Report is a regular series looking at the performance of ports around the world; identifying the winners and losers, and revealing the crucial story ports have to tell about the changing pattern of global trade.

The report examines the largest 50 ports in the world by value, focusing on size of trade and trade flows through these ports today and forecast over the next 5 years.

The Castrol Global Port Report is part of The Castrol Global Trade Barometer. In contrast to trade forecasts based on the drivers of GDP, the CGTB is based on the key drivers of global trade itself, giving us deep, accurate and actionable insight into the nuances of global trade in the near term. By taking into account trade trends, relevant macroeconomic and market influences, and the effect of the business environment on trade, we are able to give a pragmatic view providing market intelligence to support decision-making based on what is really happening on the ground.

In this report, ports are ranked by volume. Ranking by 2014 value, as in other areas of the CGTB, would be a less useful measure as some ports may trade low value produce in large volumes while others will trade a smaller amount of high value products.


The place race

Marine

Ports reflect the overall story of global trade. However, not all port nations are created equal and those that are geographically well placed, and make the most of this natural advantage, are more likely to perform strongly.

The Port Report rankings highlight the importance of emerging markets in the performance of ports. In fact, all of the top 10 ports are based in Asia.

A combination of geography and a commitment to innovation and development has seen Dubai enter the table of top twenty ports by volume at number nine (figure 1). The UAE’s emergence as a trade hub is based on the Government’s commitment to capitalise on its location near the Middle East and North Africa by enabling business and promoting trade, most significantly by developing its infrastructure. As a result, in 2012, it appeared fifth in the World Bank Doing Business Report for ease of Trading Across Borders.

Trend one: Safe harbours

The Port Report, like many other areas of the CGTB, highlights the importance of the Asia-Pacific region and China as a dominant trading power.

China features heavily in the table of top twenty ports by volume (figure 1) which includes nine of the country’s ports, an increase from seven in the last forecast. Importantly, China is regionalising meaning that the benefits are spreading to other nearby regions.

South Korea, for example, is also growing at a rapid rate, although from a low base. It is an Asian trade hub, geographically well placed to China and at the centre of key trade routes including the North American route, the Southeast Asian route, and the European route. The Korean Government is keen to promote the country as the key logistics hub for the region. However, in order to remain competitive, its ports will need to evolve a flexible infrastructure.

In comparison, European countries are growing at a slower rate, likely because they transport many of their exports via road and rail and possibly as a result of congestion. Traditional European port nations do not perform strongly in the list of top twenty ports by volume (figure 1). For example, Rotterdam has dropped out of the top 10, moving from fourth to eleventh.

North European ports like Rotterdam are currently experiencing heavy traffic, largely due to poor carrier schedule reliability. Work to improve infrastructure is also affecting terminal capacity as is the strain of accommodating larger volumes of container ships.

Trend two: Emerging markets have wind in their sails

Marine



Figure 1 The port superpowers: Top 20 ports by volume

Marine

13 | Port Klang (Malaysia) $273.07bn

12 | Dalian (China)

$287.31bn

9 | Dubai (UAE)

$350.62bn

6 | Ningbo (China)

$459.04bn

7 | Qingdao (China)

$410.60bn

4 | Hong Kong (China)

$591.34bn

5 | Busan (South Korea)

$465.05bn

3 | Shenzhen (China)

$615.84bn

2 | Singapore (Singapore)

$841.40bn

1 | Shanghai (China)

$889.37bn

8 | Guangzhou (China)

$405.01bn

10 | Tianjin (China)

$344.19bn

16 | Antwerp (Belgium) $223.22bn

17 | Xiamen (China)

$211.91bn

15 | Hamburg (Germany) $239.47bn

18 | Los Angeles (US)

$202.38bn

19 | Tanjung Pelepas (Malaysia) $201.24bn

20 | Long Beach (US)

$173.11bn

14 | Kaohsiung (Taiwan)

N/A*

11 | Rotterdam(Netherlands)

$304.60bn

* Missing values are because the UN

does not collect data for these countries.

Kaohsiung ranks in its respective

place because it is included on other

trade indices.

There are dramatic changes in the table of fastest growing ports (figure 2). In stark contrast from the last forecast, Brazilian, Indian and Australian ports no longer dominate.

Instead, Canadian ports, Vancouver and Montreal, appear for the first time, reflecting faster growing trade in the North American Free Trade Area generally. Trade in commodities is particularly strong with new trade routes opening up with Norway and the Baltics.

Durban in South Africa is also a new entrant, topping the table of fastest growing ports (figure 2), largely due to its exports of automotive parts and commodities. The area is currently recovering after recent industrial action in its mining industry and its rise in status suggests that this may be coming to a close.

The dominance of Middle Eastern and Turkish ports, none of which appeared in the last forecast, highlights the emergence of fast growing trade routes, particularly focused on the logistics and infrastructure industries. Turkey’s location makes it an ideal hub for trade between Europe, the Middle East and central Asia. It is also benefitting from government investment in infrastructure and its growing middle class.

Trend three: New moorings


Marine


Figure 2 Full steam ahead: Top 20 fastest growing ports by CAGR* 2014 - 2019

1 | Durban (South Africa) 2.63%

2 | Vancouver (Canada) 2.15%

3 | Montreal (Canada) 2.15%

4 | Salalah (Oman) 2.03%

5 | Ambarli (Turkey) 1.88%

6 | Mersin (Turkey) 1.88%

7 | Singapore (Singapore) 1.84%

8 | Jeddah (Saudi Arabia) 1.79%

9 | Dammam (Saudi Arabia) 1.79%

10 | Tokyo (Japan) 1.68%

11 | Yokohama (Japan) 1.68%

12 | Nagoya (Japan) 1.68%

13 | Kobe (Japan) 1.68%

14 | Osaka (Japan) 1.68%

15 | Sharjah/Khor Fakkan (UAE) 1.68%

16 | Dubai (UAE) 1.68%

17 | Los Angeles (US) 1.66%

18 | Long Beach (US) 1.66%

19 | New York/New Jersey (US) 1.66%

20 | Savannah (US) 1.66%

Marine



Castrol eye view:

Operating in remote ports As global communication and trade increases, shipping companies are increasingly operating in ports that are remote or difficult to access.

These locations can be high-risk as they are problematic to navigate, including bottlenecks and challenging underwater obstacles. They may also be sensitive areas including protected natural resources. Generally speaking, they are all characterised by a lack of basic infrastructure found in more established regions.

However, perhaps as a response to consumer demand, global companies with international networks are attempting to navigate these issues while many countries are keen to promote trade from remote ports. Australia’s Northern Territory Government, for example, is keen to establish a buffalo trade with Vietnam. They believe that indigenous people can profit from selling some of the 100,000 feral buffalo native to that part of Australia, which they say overrun the land and damage the environment.


Marine


Marine


The Marine Trade Barometer measures how trade and trade growth in ship parts has changed up to the end of the last quarter. It is also a forecast of how that barometer is expected to change over the next five years on a rolling basis, with the next four quarters forecast on a quarterly basis, and the subsequent four years forecast on an annual basis.

In contrast to trade forecasts based on the drivers of GDP, the CGTB is built upon the key drivers of global trade itself, including trade trends, relevant macroeconomic and market influences (such as GDP, oil prices, inflation and foreign direct investment), and the effect of the business environment on trade (such as regulation, demographics, access to capital and finance). This gives us deep, accurate and actionable insight into the nuances of global trade in the near term. By taking into account the drivers of global trade we are able to give a pragmatic view providing market intelligence to support decision-making based on what is really happening on the ground.

The Marine Trade Barometer covers all goods sectors and sub-sectors related to shipbuilding including: passenger and goods transport ships, boats, fishing vessels, warships and lifeboats.



Marine


1 | Natural Products Trade Barometer

Natural Products

Natural Products Trade Barometer

2015



The Natural Products Trade Barometer is a crucial measure of trade in global commodities. It is a key indicator of the core strength of an economy and gives an insight into consumer demand, as it comprises products needed for feeding, clothing and building for a population. The barometer comprises all agricultural trade, such as plants, vegetables, animal products, textiles, rubber and ceramics.

The barometer is part of the Castrol Global Trade Barometer (CGTB). In contrast to trade forecasts based on the drivers of GDP, the CGTB is based on the key drivers of global trade itself, giving us deep, accurate and actionable insight into the nuances of global trade in the near term. By taking into account trade trends, relevant macroeconomic and market influences, and the effect of the business environment on trade, we are able to give a pragmatic view providing market intelligence to support decision-making based on what is really happening on the ground.

As it is based on agriculture, which requires fertile climates, the Natural Products Trade Barometer gives us insights into many emerging and under-developed markets that may not be large-scale manufacturers and could be less dominant in other areas of the CGTB. The barometer shows how these economies are working to scale the value chain and become producers and exporters.

The nations in this barometer have a huge amount of influence over global food supply, are strong in natural resources and the necessary techniques, and have a comparative advantage over many established countries.

The results suggest that demand in developing economies is rapidly increasing, due to high rates of population and income growth as well as increased urbanisation and an expanding middle class.

To find out more, please download the full report at www.castrol.com/minedmademoved

Ambitious nations reaping rewards

China remains top of the table of natural products trading nations (figure 1) with a strong forecast rate of growth, 6.79% compared with 5.59% in our last five year forecast.

Brazil has made its way into the top ten natural products trading nations (figure 1) at the expense of Belgium. However, this is not indicative of the overall performance of European nations. Germany sits in third place while France is fourth.

The Netherlands, Spain and the UK also perform well. The Netherlands continues to climb the rankings. In 2001 it was ninth, by 2012 it ranked sixth and this forecast it appears fifth in the top ten natural products trading nations (figure 1). The forecast indicates the Netherlands is set to fortify its position as a key distributor of natural products across the globe.

Trend one: Cultivating growth

Natural Products


Natural Products

1 | China $528.73bn

2 | US $394.97bn



6 | Italy $160.64bn

7 | Japan $132.93bn

8 | Spain $122.40bn

9 | UK $121.35bn

10 | Brazil $105.31bn


Figure 1 Reaping rewards: Top ten fastest growing exporters by 2014 value


Natural Products

The top three exporters by value – China (first), US (second), Germany (third) – have significantly higher values than other nations, highlighting the extent of their dominance in this sector.

However, the fastest rates of growth in the Natural Products Trade Barometer are predominantly emerging economies, albeit from a low base. This reflects their growing capacity to produce and export food, clothing, natural products and construction as well as a growing demand for these products across the globe.

Brazil, Indonesia and Thailand have the fastest annualised growth rate of the top ten natural products exporters by 2014 value. If these rates of growth are realised, it is likely that they will become major players by 2019. Brazil, for example, would displace the Netherlands and begin to challenge Germany.

Vietnam and Iraq have switched positions (figure 2) since the last forecast which, given the size of the market in Vietnam, is particularly impressive. However, its geographic position, access to cheap labour, and ongoing refinement of trade conditions are all helping strengthen Vietnam’s competitive advantage.

The Asia-Pacific region in general is beginning to show its potential future dominance in the natural products sectors. This is demonstrated by India and South Korea displacing South Africa and Egypt.

There is also significant movement at the bottom of the table of fastest growing natural products trading nations (figure 2). Only Thailand remains from the last forecast due to its strengthening of skills, infrastructure and its close relationship with China.

Trend two: Emerging economies branching out

Figure 2 Growing at speed:

Top ten fastest growing natural products trading nations

by CAGR* 2014 - 2019

1 | Vietnam9.48%

3 | Iraq9.05%

5 | Malaysia8.45%

7 | South Korea8.18%

9 | Australia8.12%

2 | Nigeria9.06%

4 | Indonesia8.85%

6 | Algeria8.25%

8 | Thailand8.16%

10 | India8.10%


* CAGR = annualised growth over five years

2014-2019


Natural Products

France appeared third in the rankings of top ten natural products importers by 2014 value in the last CGTB. In this latest forecast, China has taken the top spot, displacing France to fourth place (figure 5). This is likely to be the result of China’s ever increasing demand for food and clothing for its large population.

Six of the G7, plus China, the Netherlands, Russia and Spain, appear in the table of top 10 natural products importers (figure 5) demonstrating that they are not self-sufficient in food and clothing and must rely on imports from other countries.

Clothing continues to be a key driver in the table of top ten natural products exports by country, accounting for five of the top ten (figure 3).

China’s role in global natural products trade is crucial here: it features six times. It features six times in the top ten exports by country rankings (figure 3). Although China is increasingly influential in high-end manufacturing, this shows that demand for its cheaper produce is still very high.

The US and China dominate the rankings for top ten natural products imports by country (figure 6) comprising eight of the top ten. This is likely to be the result of their high demand populations.

Germany also occupies a central place for its imports of tyres (crucial for its booming automotive exports) and is the only European nation to feature.

Trend three: Hungry populations

Natural Products



Natural Products

Figure 3 Producing the goods: Top ten natural products exports by country by 2014 value

7 | Indonesia$19.38bn

10 | China$15.89bn

4 | China$23.88bn

5 | Brazil$22.95bn

1 | China$32.85bn

2 | China$28.07bn

3 | US$27.13bn

9 | China$16.30bn

8 | Malaysia$19.08bn

6 | China$21.33bn

1 | Jerseys, pullovers, cardigans, knit or crochet 2 | Womens, girls suits, jacket, dress, skirt, woven 3 | Soya beans 4 | Footwear, with outer sole, upper rubber or plastic 5 | Soya beans 6 | Footwear with uppers of leather

7 | Palm oil and its fractions, not chemically modified 8 | Palm oil and its fractions, not chemically modified 9 | New pneumatic tyres, of rubber 10 | Mens or boys suits, jackets, trousers not knit


Natural Products

Figure 4 Exporting success: Top ten natural products exporters by 2014 value

Figure 5 Consuming natural products:

Top ten natural products importers

by 2014 value

1 | China $401.15bn

2 | US $160.89bn



5 | Brazil $83.05bn

6 | France $78.60bn

7 | Italy $74.04bn

8 | Indonesia £68.90bn

9 | Spain $57.65bn

10 | Thailand $57.57bn

$234.08bn US | 1


$127.57bn China | 3

$105.99bn France | 4

$104.12bn Japan | 5

$92.07bn UK | 6

$86.61bn Italy | 7

$85.78bn Netherlands | 8

$67.49bn Russia | 9

$64.75bn Spain | 10

Natural Products


Natural Products

Soya beans $36.62bn China | 1

New pneumatic tyres, of rubber $15.26bn US | 2

Jerseys, pullovers, cardigans, knit or crochet $11.53bn US | 3

Natural rubber and gums, in primary form, plates $11.35bn China | 4

Footwear with uppers of leather $9.65bn US | 5

New pneumatic tyres, of rubber $9.43bn Germany | 6

Palm oil and its fractions, not chemically modified $9.12bn India | 7

T-shirts, singlets and other vests, knit or crochet $7.65bn US | 8

Womens, girls suit, dress, skirt, knit or crochet $7.48bn US | 9

Palm oil and its fractions, not chemically modified $7.45bn China | 10


Top ten natural products imports by country by 2014 value



Natural Products

Overall picture: Natural products trade growth

The outlook has improved since the last Natural Products Trade Barometer, with annualised growth forecast to improve from 4.9% to 6.3% over the next five years.

In growth terms, natural product sectors demonstrate the most stability in the short and medium term, with year-on-year growth rates of over 3% from 2014-2017, and significantly higher rates in the following years. This stability is largely a result of assured demand for imports from the world’s more developed nations which benefit from lower costs of production in developing economies.

The demand for natural products is predominantly met by Asian nations, which are showing remarkably strong rates of growth. Infrastructure in Asia’s emerging economies will be a priority if they are to cope with burgeoning import and export demand. However, strong forecasts in this crucial sector reflect the already rapidly improving infrastructural capabilities of developing nations.

Castrol eye view: Growing relationships Agriculture plays a key role in Brazil’s economy and the country is a leading producer of agricultural commodities. In particular, Brazil is now one of the world’s top soybean exporters, with forecast growth for soya beans at almost 9% annually for the next five years.

China is currently the largest importer of Brazil’s agricultural products, and the Chinese market is vital for for Brazilian commodity exporters.

China’s reduction of croplands and a growing population have also resulted in a rising demand for soybeans, and it now imports around half the world’s exported soy. This significant global bilateral trade link is expected to continue to grow in coming years and may even surpass the historic soy trade link between the US and Japan.



The Natural Products Trade Barometer measures how trade and trade growth in goods has changed up to the end of the last quarter. It is also a forecast of how that barometer is expected to change over the next five years on a rolling basis, with the next four quarters forecast on a quarterly basis, and the subsequent four years forecast on an annual basis.


The Natural Products Trade Barometer is a crucial measure of trade in global commodities. It comprises all agricultural trade, such as plants, vegetables, animal products, textiles, rubber and ceramics.

The forecasts within the CGTB are based on investment grade data covering 200 countries and 10,000 sectors worldwide. The data is interpolated from UN Comtrade, IMF, ITC and country statistical office data. Forecasts for annual and annualised growth are based on 20 parameters that cover short, medium and long-term drivers of trade. Data for these parameters is taken from international sources including Haver Analytics, Bloomberg, UNCTAD, WTO, IMF, ILO and the World Bank. The barometer is independent of political and behavioural factors, except as priced in by markets.


Natural Products

Overall

The Castrol Global Trade Barometer is based on methodology and data provided by our specialist trade economist partner. This report should therefore be considered independent from, and not necessarily consistent with, the BP Energy Outlook.

Legal NoticeWhilst this report has been prepared in good faith, no warranty or representation, express or implied, is made as to its accuracy or completeness.The information given in this report is of a general nature. It is not intended to amount to, and should not be relied on as being, commercial, economic or professional advice for any specific purpose, issue or transaction. No liability is accepted for any such reliance. This report contains forward-looking statements. Forward-looking statements involve risks and uncertainties because they relate to events, and depend on circumstances, that will or may occur in the future. Actual results may differ depending on a variety of factors, including trade and shipping patterns, product supply, demand and pricing, political stability, general economic conditions, legal and regulatory developments, availability of new technologies, natural disasters and adverse weather conditions, wars and acts of terrorism or sabotage, and many other factors. Any forward-looking statement speaks only as of the date on which such statement is made and we undertake no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise.

Castrol, the Castrol logo and related marks are trademarks of Castrol Limited.Produced by Castrol Limited. Registered in England & Wales, no 149435. Registered office: Wakefield House, Pipers Way, Swindon, Wiltshire, SN3 1RE, United Kingdom.© 2015 Castrol Limited. All rights reserved.

Media enquiries The Castrol Global Trade Barometer is designed to increase the understanding of global trade and its impacts on your industry. If you have any questions about the ideas presented in the report and would like to meet with a Castrol representative, please contact: [email protected] (0203 683 4379).

Questions on data Castrol regrets it is unable to deal with enquiries about the data in the Castrol Global Trade Barometer.

Acknowledgements Report content Man Bites Dog – www.manbitesdog.com Design Pixeldot – www.pixeldotcreative.com

More information The Castrol Global Trade Barometer is designed to increase the understanding of global trade and its impacts on your industry. If you have any questions about the ideas presented in the report and would like to meet with a Castrol representative, please contact [email protected] (0203 683 4379).This report is one of a series, which tracks the performance of global trade and provide a regular five-year forecast of future trade patterns. Further details can be found at www.castrol.com/minedmademoved

Quoting from the barometer Publishers are welcome to quote from this barometer provided that they attribute the source to the Castrol Global Trade Barometer. However, where extensive reproduction of tables and/or charts is planned, permission must first be obtained.

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Overall - Country Selector | Castrol Global · Vietnam’s location, and improving trade conditions have also helped it climb the rankings of fastest growing natural products trading