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Charlie Huckerby - Braemar Seascope - Australian base metal shipping

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Charlie Huckerby delivered the presentation at the 2014 Mining NSW Conference. …

Charlie Huckerby delivered the presentation at the 2014 Mining NSW Conference.

Mining NSW Conference is the premier event focused on base metals exploration, building regional skill, and promoting economic development.

For more information about the event, please visit: http://bit.ly/miningnsw14

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  • 1. Australian Base Metal Shipping www.braemaracm.com Informa Mining NSW Charlie Huckerby – Braemar ACM August 2014
  • 2. Disclaimer The informa,on contained within this report is given in good faith based on the current market situa,on at the ,me of preparing this report and as such is specific to that point only. While all reasonable care has been taken in the prepara,on and colla,on of informa,on in this report Braemar Shipping Services Plc (and all associated and affiliated companies) does not accept any liability whatsoever for any errors of fact or opinion based on such facts. Some industry informa,on rela,ng to the shipping industry can be difficult to find or establish. Some data may not be available and may need to be es,mated or assessed and where such data may be limited or unavailable subjec,ve assessment may have to be used. No market analysis can guarantee accuracy. The usual fundamentals may not always govern the markets, for example psychology, market cycles and external events (such as acts of god or developments in future technologies) could cause markets to depart from their natural/usual course. Such external events have not been considered as part of this analysis. Historical market behaviour does not predict future market behaviour and shipping is an inherently high risk business. You should therefore consider a variety of informa,on and poten,al outcomes when making decisions based on the informa,on contained in this report. All informa,on provided by Braemar Shipping Services Plc is without any guarantee whatsoever. Braemar Shipping Services Plc or any of its subsidiaries or affiliates will not be liable for any consequences thereof. This report is intended solely for the informa,on of the email recipient account and must not be passed or divulged to any third par,es whatsoever without the wriLen permission of Braemar Shipping Services Plc. Braemar Shipping Services Plc accepts no liability to any third par,es whatsoever. If permission is granted, you must disclose the full report including all disclaimers, and not selected excerpts which may be taken out of context. For more informa+on, contact Research on +61 (08) 9388 0536 or email research@braemar.com www.braemaracm.com
  • 3. www.braemaracm.com Braemar ACM Shipbroking Braemar ACM Shipbroking is a wholly owned subsidiary of Braemar Shipping Services PLC a UK-­‐based LSE company comprised of four divisions with shipbroking at its core. Braemar Shipping is one of the largest shipping services companies in the world with headquarters in London and regional offices in Aberdeen, Dubai, Shanghai, Beijing, Singapore, Mumbai, New Delhi, Melbourne, Sydney and Perth. The Australian offices have 50 employees, whilst the Group employs over 1,000 people worldwide. Braemar has no principal acOviOes in ship owning or operaOng.
  • 4. www.braemaracm.com Base Metal Ports
  • 5. Newcastle CBH Glencore TriXon www.braemaracm.com Base Metal Export Ports Geraldton Sandfire MMG Adelaide IMX OZ Minerals Hillgrove Townsville Chinova BHP Glencore Port Kembla Newcrest CMOC (Northparkes) Port Pirie Perilya (Lead) Karumba MMG Sydney (Containers) KBL Peak Burnie CMT Port Hedland Sandfire Newcrest Birla Telfer Bunbury Boddington
  • 6. Loading Methods of Base Metals www.braemaracm.com
  • 7. Fig 1: Mobile loader Fig 2: Fixed loaders www.braemaracm.com Shore Side loaders Miners using this system • Newcrest – Port Kembla • CBH – Newcastle • Telfer – Port Hedland
  • 8. RotaJng Systems – Storage at the port Fig Fig 3: Rotainer Boxes in Stacks 4: Straddle Carrier www.braemaracm.com
  • 9. www.braemaracm.com RotaJng System -­‐ Loading Fig 5: QUBE Unit Tipping Minimal Dust Fig 6: Ships Crane Loading in Geraldton Miners using this system • Sandfire – Geraldton • IMX – Adelaide • Oz Minerals – Adelaide • Chinova – Townsville
  • 10. Skips – Philippines and South East Asia Fig 7: Skip loading from quayside Fig 8: Skip discharging into ships hold Previously done by Newcrest out of Port Kembla, but superseded by rotating containers www.braemaracm.com
  • 11. www.braemaracm.com ConvenJonal Bulker Fleet
  • 12. 01/08/2014 www.braemaracm.com Bulker Fleet & Orderbook 698 2,024 709 1,894 180 1,985 395 119 1,296 197 17 420 52 83 583 355 31 7 298 53 2,200 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 Small Handysize Large Handysize Handymax Supramax Ultramax Panamax Post-­‐ Panamax Mini Capesize Capesize VLOC Number of Vessels Fleet Orderbook Total % of fleet on order =20% (Up 0.18% M-­‐o-­‐M) Source: Braemar ACM Research
  • 13. www.braemaracm.com Ultramax (60-­‐69,999 DWT) 14 24 44 53 77 45 267 194 44 1 300 250 200 150 100 50 0 Number of Vessels Ultramax (modern Supramax) sector includes 60-­‐69.99k dwt geared vessels built aGer 2009 Fleet Orderbook 01/08/2014 Source: Braemar ACM Research
  • 14. www.braemaracm.com Supramax (50-­‐59,999 DWT) Supramax includes 50-­‐59.99k Dwt sector 2 2 1 2 1 5 3 8 7 6 12 66 66 54 64 97 86 84 105 168 283 323 268 135 22 46 37 21 3 350 300 250 200 150 100 50 0 Number of Vessels Fleet Orderbook including old vessels of 50-­‐58k Dwt, and all post-­‐1998 geared Supramaxes 01/08/2014 Source: Braemar ACM Research
  • 15. www.braemaracm.com Large Handysize (25-­‐39,999 DWT) 74 89 262 253 226 47 34 54 55 38 46 39 57 30 30 32 34 14 6 15 9 12 13 42 73 124 227 163 218 96 32 0 50 100 150 200 250 300 Number of Vessels Fleet Orderbook 01/08/2014 Source: Braemar ACM Research
  • 16. Freight Market: Free Market www.braemaracm.com
  • 17. Global Financial Crisis www.braemaracm.com Record Spot Rates An historical perspecJve 250,000 200,000 150,000 100,000 50,000 0 US $/ Day Chinese Credit Crunch Commencement of Chinese Rapid Development Record Chinese Iron Ore imports Cooling Chinese Steel Demand & Reducing Congestion Capesize Panamax Supramax Handysize Handymax 22/08/2014 Source: The Bal,c Exchange
  • 18. www.braemaracm.com Parcel Rates Comparison Cargo Loaded Load/Discharge Port Freight Rate USD/T 5,500 T Darwin to Qingdao 48 11,000 T Darwin to Qingdao 32 5,500 T Adelaide to Qingdao 55 11,000 T Adelaide to Qingdao 40 5,500 T Newcastle to Qingdao 50 11,000 T Newcastle to Qingdao 35 5,500 T Port Kembla to Qingdao 50 11,000 T Newcastle to Qingdao 35 Calculations based upon US$600/tonne fuel oil Load Rate 5,000 T/Day Standard smelter discharge rates Source: Braemar ACM Research
  • 19. www.braemaracm.com Conclusions
  • 20. 25/08/2014 www.braemaracm.com OpportuniJes and consideraJons for base metal shippers • Number of ports that can be chosen, based upon mine locaOon – Newcastle, Port Kembla, Port Pirie, Sydney (containers) and Adelaide are the major ports applicable for NSW. • Range of loading methods for base metals. • Factors impacOng choice of loading method include: – Mine locaOon – Port infrastructure – Storage and environmental concerns at load port – Expected mine output • Very liXle fluctuaOon in freight rates between the various ports, thus selecOon of one port over another is unlikely to disadvantage you. • We foresee freight rates to remain weak over the next two to three years, as an oversupply of vessels that has hit the water in the last few years, will mean compeOOon will remain high between shipowners.