Malaysia Shipping Report

Saturday, May 14, 2011- I am browsing the net looking for some shipping data. I came across below articles and would like to share with my blog reader.

PRLog (Press Release) – Nov 08, 2010 – At the end of August 2010, it was reported that Singaporean shipping company Marco Polo Marine (MPM) was further expanding its coal shipping role in South East Asia having signed a US$15.5mn deal to transport Indonesian coal to Malaysia. South East Asian nations are diversifying their power sectors, with many increasing their use of coal, which is fuelling demand for the shipment of this commodity. The contract would see the company shipping coal from Indonesia to West Malaysia from September 2010 for a two-year period. The new contract further highlights MPM's role in the South East Asia dry bulk sector, with the company building up its fleet of tugs and barges in order to ship coal throughout the region. We believe that MPM's latest contract, to transport coal between Indonesia and Malaysia, is part of Malaysia's strategy to diversify its power sector. According to BMI power data, gas dominates Malaysia's power sector. Our forecasts for 2010 suggest that gas will account for 59% of the country's electricity generation. Malaysia, however, has been decreasing its reliance on gas for its electricity supply -- in 2000, gas was contributing 76.2% to the country's electricity generation, and coal has been filling the gap. In 2010 we forecast that coal will contribute 28.1% to the nation's electricity generation, up from 9.1% in 2000. BMI expects coal shipments to continue to play a major role in South East Asia's dry bulk shipping sector as nations try to diversify their power sectors away from a reliance on one form of energy.

Going into 2011, BMI took the view that the Malaysian business cycle -- and consequently its effects on the local ports and shipping sector -- will be more pronounced than we had originally expected. On the upside, and based on a strong export performance, we have consistently raised our estimate for GDP growth in 2010, to 6.4% (was 4.9%). On the downside, however, on the back of concerns about a 'double dip' global recession in 2011, and specifically a slowdown in China, we have reduced the forecast for Malaysia in that year to 3.4%. Looking forward across a four-year forecast horizon, we still expect GDP to grow by a respectable annual average of 4.7%. Political factors may affect this outlook, however. Throughout 2010, the opposition Democratic Action party (DAP) has shown growing strength in a series of by-elections and appears to be mounting a serious challenge to the ruling Barisan Nasional (BN). In BMI's view BN may lose its two thirds congressional majority in the next general elections, which are due to be held by 2013 at the latest. Therefore political risk could be on the rise.

After a very vigorous recovery in 2010, with throughput rising by 24.7%, for 2011 we expect a slowdown in cargo volume growth at Port of Klang (POK). We are projecting much more moderate growth of 5.4% to 180.99mn tonnes. These two years of expansion will have comfortably wiped out the losses of globalrecession dominated 2009, when POK volume dropped by 9.6%. At the Port of Tanjung Pelepas (POTP), we see 2011's volume gaining by 5.8% to 118.6mn tonnes, a slowdown on 2010's 17.9% gain.

The Port of Klang is expected to see 5.8% container handling growth to 9.709mn TEUs in 2011, a marked slowdown on the 25.5% growth experienced in 2009. The Port of Tanjung Pelepas will see growth of 6.2% to 6.891mn TEUs in 2011.

In real terms, we expect Malaysia's total trade (imports + exports) to grow by 3.0% in 2011, a slowdown on the 12.5% leap forward achieved in 2010. During the recession of 2009 total trade had contracted by 11.3% in real terms. In nominal terms, in 2011, we predict that imports will edge forward by 4.3% to US$239.6bn, while exports will gain slightly less, by 4.0% to US$262.7bn. Malaysia will therefore register a moderately-sized trade surplus: we expect it to continue doing so over the next five years, although it will narrow in size given the faster relative growth of imports.