Tanker Market Outlook (based on VLCC]

Transcription

1 Tanker Market Outlook (based on VLCC] November 1, 212 HANBADA

2 Tanker Major Trade Lanes West-bound East-bound Crude oil loading zone N.SEA UKC USA MED AG AG F.EAST CARIB. WAF WAF SPORE INDO BRAZIL Crude oil: Utilization of VLCC/SUEZMAX/AFRAMAX - Long voyage: VLCC or SUEZMAX - Short voyage: SUEZMAX or AFRAMAX Refined product: Utilization of LR2/LR1/MR -1- HANBADA

3 WS Rates & Correlation by ship Historical Monthly World Scale Rates Table of Correlation Coefficient V LCC(AG/EAST) SUEZ(WAF/USG) AFRA(AG/SPORE) LR2(AG/JP) VLCC SUEZMAX AFRAMAX LR2 VLCC WS Jan-2 Jul-2 Jan-3 <Sources: Clarkson, Hanbada> Jul-3 Jan-4 Jul-4 Jan-5 Jul-5 Jan-6 Jul-6 Jan-7 Jul-7 Jan-8 Jul-8 Jan-9 Jul-9 Jan-1 Jul-1 Jan-11 Jul-11 Jan-12 Jul-12 SUEZMAX AFRAMAX LR Despite the difference of ship size, the market volatility was very similar over the past 1 years. Tankers have high correlation with each other. -2- HANBADA

4 Market Fluctuations & Seasonality $/ day 25, 225, 2, 175, 15, VLCC(AG/EAST) SUEZMAX(WAF/USG) Market Fluctuations by factors OPEC increases production Hurricane Katrina Hits southern U.S. Hebei Spirit s oil spill Speculative storage by soaring oil price $/day 8, 7, 6, 5, 4, 3, 2, Market Seasonality 125, 1, 75, 5, 25, -25, Jan- Aug- Mar-1 U.S. attack on Iraq IT bubble decay 911 terror <Sources: Baltic exchange, Hanbada> Oct-1 May-2 Dec-2 Jul-3 Feb-4 Sep-4 Apr- 5 Nov-5 Jun-6 Jan-7 Aug-7 Mar-8 Oct-8 May-9 Financial crisis Expectations for economic recovery & speculative storage Oversupply Dec-9 Jul-1 Feb-11 Sep-11 Apr-1 2 1, VLCC AFRAMAX SUEZMAX LR2 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec (unit: $/day) 1Q 2Q 3Q 4Q VLCC 6,117 43,489 37,35 57,655 SUEZMAX 42,58 33,73 26,525 43,363 AFRAMAX 26,55 22,229 22,23 29,462 LR2 26,213 21,992 28,163 28,85 Based on data over the past 1 years, Market Trends (due to seasonal factors) Summer-bear market, Winter-Bull market Similar to oil consumption patterns Refinery maintenance during summer Restocking for cold winter -3- HANBADA

5 VLCC Annual Spot Earnings Annual Spot TCE Earnings by trade lane (unit:$/day) AG/EAST AG/WEST WAF/USG 2 52,429 47,564 58, ,436 36,429 42, ,622 2,363 25, ,34 46,186 51, ,15 86,393 15, ,44 56,226 66, ,58 53,11 72,19 ($/day) 12, 11, 1, 9, 8, 7, 6, 5, 4, Since global financial crisis, Market has been made worse by oversupply problem. AG/EAST AG/WEST WAF/USG 27 62,79 45,347 56, ,2 74,41 1,691 3, 2, 1, B.E.P.: $3k/day level 29 31,634 19,83 43, ,219 26,676 45, (~Oct) ,364 3,38 25,79 29~211 Avg. 3,72 16,62 38,37 27~211 Avg. 5,986 33,849 54,175 22~211 Avg. 55,75 43,152 59, (~Oct) 21,66 1,826 32,174 <Sources: Clarkson, Hanbada> Correlation by lane Correlation coefficient AG/EAST- AG/WEST AG/EAST- WAF/USG AG/WEST- WAF/USG HANBADA

6 VLCC Spot Market Trends(1) TD3(AG/EAST) TCE Earnings $/day 9, 8, 7, 6, 5, 4, 3, 2, 1, Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec ex-ag Spot Fixtures Despite concerns of oversupply, Unexpectedly bull market developed in the first half of 212. Due to: - active spot fixtures(apr~jun stems, laycan basis) - increase in china s oil imports - increase in saudi s exports to U.S. Motiva refinery - new NOVA POOL in February (Maersk tanker/phoenix tanker/samco shipping/ocean tanker) - major importers efforts to restock prior to iran sanction - bullish west market by china and india - slow steaming etc. (unit: No. of fixtures) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Month avg. WEST CHINA KOREA OTHER TOTAL <Sources: Hanbada> * Laycan basis -5- HANBADA

7 VLCC Spot Market Trends(2) No. fixtures WS Fujairah 38 cst TD3 WS $/mt Spot Fixtures & WS Bunker Prices & WS Spot Fixtures (laycan basis) VLCC(AG/EAST) No.ships WS [Recently bearish factors] - Flat fixtures - Long tonnage-list - Fluctuations of bunker Available Tonnages & WS Available tonnages AG/EAST(WS) 11 WS Jan-9 Mar-9 May-9 Jul-9 Sep-9 Nov-9 Jan-1 Mar-1 May-1 Jul-1 Sep-1 Nov-1 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Jan-9 Mar-9 May-9 Jul-9 Sep-9 Nov-9 Jan-1 Mar-1 May-1 Jul-1 Sep-1 Nov-1 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 <Sources: Hanbada> * arriving in AG within 3 days Moving into winter -6- HANBADA

8 VLCC TC Rates & Spot TCE <Sources: Clarkson, Hanbada> Annual TC rates & Spot TCE earnings (unit:$/day) 1yr TC 3yr TC 5yr TC AG/EAST 2 43, , ,49 28,667-33, ,824 27,274-22, ,26 3,125-53, ,557 42,14-99, ,529 47,192-59, ,38 47,337-61, ,548 48,385-62, ,413 58,644 56,833 12, ,577 37,538 37,38 31, ,962 38,32 37,594 4, ,947 31,481 33,899 18,364 29~211 Avg. 34,162 35,774 36,267 3,72 27~211 Avg. 46,289 42,87 41,49 5,986 22~211 Avg. 46,393 4,838 41,49 55,75 212(~Oct) 22,298 27,113 3,786 21,66 ($/day) 12, 1, 8, 6, 4, 2, 2 21 AG/EAST TCE 3yr TC 1yr TC 5yr TC (~Oct) SPOT TCE 1yrs Avg. 1yr TC 1yrs Avg. [General Tendency] Spot Bullish: Short TC Rates > Long TC Rates Charterers prefer Long TC Spot Bearish: Short TC Rates < Long TC Rates Charterers prefer Spot or Short TC -7- HANBADA

9 VLCC Tonnages 19 VLCC Fleet Development 1 2 VLCC Scrap Trends VLCC Fleet % Growth VLCC Fleet Scrap Ratio VLCC Scrap Mil. dwt % Mil. dwt % YTD YTD VLCC Age Profile VLCC Orderbook 1~ 5yrs 6~ 1yrs 11~ 15yrs 16~ 2yrs >21yrs No.Ship Non D/H D/H Total % 4% 24% 24% 11% 1% 1% No. ships Mil. dwt Total % of Fleet % % <Sources: Clarkson, Hanbada> * Based on Oct HANBADA

10 VLCC Asset Values VLCC Prices of N/B-S/H-Resale N/B-related Activities AG/EAST TCE Resale prices N/B prices S/H prices(5yr) 3, 25, 12, 1, TD3 tce Contracts Orderbook Deliveries , 8, 2 $ mil , ($/day) $/day 6, 15 No. of ships 8 4, Jan-2 Aug-2 Mar-3 Oct-3 May-4 Dec-4 Jul-5 Feb-6 Sep-6 Apr-7 Nov-7 Jun-8 Jan-9 Aug-9 Mar-1 Oct-1 May-11 Dec-11 Jul-12 Downward pressures increase and are considerable. 1, 5, Lowest Highest Present Falling Rate (unit: $mil. $/day) 2, India basis($/ldt) Scrap prices YTD 5 Impact of spot doldrums & shrinking ship finance N/B prices % Resale prices % S/H prices (5yr) % $/ldt TCE (Month avg) 3,92 239,34 3, % <Sources: Clarkson, Poten, Hanbada> 1 Jan-5 Sep-5 May-6 Jan-7 Sep-7 May-8 Jan-9 <Sources: Clarkson, Hanbada> Sep-9 May-1 Jan-11 Sep-11 May HANBADA

11 AFRAMAX MR Tanker Asset-Value Trends 1, 1 14, 9, 8, 7, 6, 5, 4, 3, INDO/JAPAN TCE N/B prices Resale prices S/H prices(5yr) WAF/USG TCE N/B prices Resale prices S/H prices(5yr) 12, 1, ($/day) ($/day) $ mil. 8, 6, 4, $ mil. SUEZMAX 2, 1, 2 2 2, 1 Jul-12 Dec-11 May-11 Oct-1 Mar-1 Aug-9 Jan-9 Jun-8 Nov-7 Apr-7 Sep-6 Feb-6 Jul-5 Dec-4 May-4 Oct-3 Mar-3 Aug-2 Jan-2 Jul-12 Dec-11 May-11 Oct-1 Mar-1 Aug-9 Jan-9 Jun-8 Nov-7 Apr-7 Sep-6 Feb-6 Jul-5 Dec-4 May-4 Oct-3 Mar-3 Aug-2 Jan-2 8 7, 7 SPORE/JAPAN TCE N/B prices 45, ($/day) 4, 35, 3, 25, 2, 15, 1, Resale prices S/H prices(5yr) ($/day) $ mil. 6, 5, 4, 3, 2, AG/JAPAN TCE N/B prices 7 Resale prices S/H prices(5yr) $ mil. LR 1 1, 1 5, Jul-12 Jan-12 Jul-11 Jan-11 Jul-1 Jan-1 Jul-9 Jan-9 Jul-8 Jan-8 Jul-7 Jan-7 Jul-6 Jan-6 Jul-5 Jan-5 Jul-4 Jan-4 Jul-3 Jan-3 Jul-2 Jan-2 Jul-12 Jan-12 Jul-11 Jan-11 Jul-1 Jan-1 Jul-9 Jan-9 Jul-8 Jan-8 Jul-7 Jan-7 Jul-6 Jan-6 Jul-5 Jan-5 Jul-4 Jan-4 Jul-3 Jan-3 Jul-2 Jan-2-1- HANBADA

12 Global Oil Demand 1 Global Oil Demand 5 Consuming Countries (212 basis) mbd Non-OECD OECD % Growth <Sources: IEA, Hanbada> (P) 213(P) Over the past 1 years, Average growth rate : 1.4% OECD ratio reduced 22: 61.7% 212: 51.5% Non-OECD ratio enlarged : due to BRICs strong growth 22: 38.3% 212: 48.5% % Others 34% Canada 3% Saudi 3% Brazil Russia 3% 4% Non-OECD 37% OECD 21% EU(5) 9% India 4% USA 21% Japan 5% Korea 3% Producing countries (Sep. 212 basis) OPEC 42% China 11% * EU(5): FRA.GER,ITA,SPA,UK <Sources: IEA, Hanbada> -11- HANBADA

13 U.S. Crude oil Stocks & Imports k bbl 38, 36, 34, 32, 3, 28, 26, 24, 22, 2, U.S. Crude Oil Stocks (excluding SPR) Crude oil stocks WAF/USG AG/EAST After Jan.21, Lowest 28-Jan 28-May 28-Sep 29-Jan 29-May 29-Sep 21-Jan 21-May 21-Sep 211-Jan 211-May 211-Sep 212-Jan 212-May 212-Sep Recently crude oil stocks upturn. October stocks, up 33 mil. bbl from same month last year. WS mb/d Jan-8 Apr-8 U.S. Crude Oil Stocks (excl. SPR) & Imports U.S. Domestic Production (mbd) Crude Stocks(mil. Bbl) Jul-8 Oct-8 Jan-9 Apr-9 Jul-9 Crude Imports(mb/d) Expectations for recovery Oct-9 Jan-1 Apr-1 Jul-1 Oct-1 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 - U.S. domestic production of crude oil has been increasing <Sources: EIA, Hanbada> mil. bbl Jun-12 Jul-12 Aug-12 Sep-12 Oct % Growth.8%.9% - 3.4% 2.1% 6.4% 36 Due to high 32stocks & increase in domestic production After Jan.1999, Highest -12- HANBADA

14 U.S. Refinery Capacity Changes U.S. Refinery Capacity Changes BRENT-WTI Spread TD3 TCE 25, 2, Company Refinery Country Capacity (kbd) 211 Sunoco Marcus Hook USA ConocoPhillip's Trainer USA Hess Oil St. Croix Virgin Islands Sunoco Philadelphia USA Hess Oil St. Croix 212 Virgin Islands -35. Motiva Enterprises Port Arthur USA COP/Cenovus Wood River USA 5. Spread ($/bbl) Negative effect on west market 15, 1, 5, - -5, TCE ($/day) 212 Marathon Ashland Detroit USA Tesoro Mandan USA Valero Sunray USA 28.4 mil. bbl U.S. imports from WAF(Angola & Nigeria) Some refineries have been closed in PADD 1(U.S. east coast) due to equipment obsolescence & refining-margin deterioration The delay of Motiva s launching due to technical troubles 1 Jan-8 May-8 Sep-8 Jan-9 May-9 Sep-9 Jan-1 May-1 Sep-1 Jan-11 May-11 Sep-11 Jan-12 May-12 <Sources: EIA, KNOC, Hanbada> -13- HANBADA

15 China s imports & OPEC Production mil. ton 26 China s Crude oil Imports all-time high WS 25 mb/d 34 OPEC Production WS Crude oil imports TD3(AG/EAST) WS Sharply drop OPEC s effective spare capacity: 3.9mbd (Saudi 2.1mbd) OPEC production TD3(AG/EAST) WS 2 mi.ton Jan-8 4Q -9 1Q -9 2Q -9 3Q -9 Q ly imports trends May-8 1Q -1 2Q -1 3Q -1 Sep-8 4Q -1 1Q-11 Jan-9 2Q-11 3Q-11 May-9 4Q -11 1Q -12 Sep-9 2Q -12 3Q -12 Jan-1 May-1 Oct. Nat. Holida y Following the very strong oil import in May, China s import level has come off, in particular, in August. But still expect stockpiling of oil and stimulus packages. Sep-1 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep <Sources: China customs, IEA, Hanbada> Jan 28-Jun 28-Nov 2 9-Apr 29-Sep 21-Feb 21-July Impact of Libyan Revolution 21-Dec 211-May 211-Oct 212-Mar 212-Aug After April-peak, OPEC production showed a decreasing trend. Decrease in Saudi s production 1.mbd 9.5mbd HANBADA

16 China s SPR Expansion China s SPR Expansion Operator Location Capa. Completion Status Sinopec Zhenhai, Zhejiang Q6 Filled Sinochem Zhoushan, Zhejiang Q7 Filled Sinopec Huangdao, Shandong 2.1 4Q7 Filled CNPC Dalian, Liaoning Q8 Filled Phase CNPC Dushanzi, Xinjiang Q11 To be filled CNPC Lanzhou, Gansu Q11 To be filled CNPC Jinzhou, Liaoning Q12 Sinopec Tianjin 22. 1Q12 <Sources: IEA, Hanbada> * Phase 2 was estimated by IEA. Under construction Under construction Other(4 Storages) planed Phase Phase Total 5. (unit: mil. bbl) China has been continuing the construction of the second phase of its Strategic Petroleum Reserve (SPR). The filling is dependent on price and buying schedule. Cf. U.S. SPR: 695mil. bbl Japan SPR: 254mil. bbl $/bbl J an-11 F eb-1 1 Mar-11 Apr-1 1 May -11 Jun-11 <Sources: KNOC, Hanbada> BRENT-DUBAI SPREAD Jul-11 Aug-11 Sep-11 Oct-11 N ov-11 D ec-1 1 J an-12 F eb-1 2 Mar-12 Apr-1 2 Brent-Dubai spread contraction in 1 st Half of 212 M ay-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Brent is attractive for china s buyer. Positive effect on tonne-miles HANBADA

17 Floating Storage Demand WTI Spot-Futures Basis BRENT Spot-Futures Basis oil price($/bbl) nov/12-spot jan/13-spot mar/13-spot WTI(spot) nov/12 jan/13 mar/13 basis($/bbl) Weak Contango oil price($/bbl) nov/13-spot jan/13-spot mar/13-spot BRENT(spot) nov/12 jan/13 mar/13 basis($/bbl) weak Contango [Prerequisite for storage increase] Low WS Rate & Strong Contango Commercial Storage 8 Demand 7 Cold 6 Backwardation May Jun Jul Aug Sep Oct -4 5 May Jun Jul Aug Sep Oct NITC VLCC STORAGE U.N. sanctions against Iran. No.ships Iran storage decreasing - Due to increase in exports by NITC. - Aug basis, storage estimated to be 23 mil. bbl. 1-Jan 1-Mar 1-May 1-Jul 1-Sep 1-Nov 11-Jan 11-Mar 11-May 11-Jul 11-Sep 11-Nov 12-Jan 12-Mar 12-May 12-Jul cf. NITC fleet: VLCC 28, SUEZMAX 9, AFRAMAX 5 <Sources: IEA, KNOC, Gibson, Hanbada> -16- HANBADA

18 World Economic Outlook World Economic Outlook World Advanced eco. Emerging market U.S. Euro China India 8 6 Macro Variables Development 8 4 % % 2-2 Expect to approach to 3~ 7 avg. in medium-term. '3~'7 avg '8~'11 avg 212(p) <Sources: IMF, Hanbada> * Based on Oct (p) [World economy still downside risks] U.S. : High unemployment 217(p) & Fiscal Cliff Euro: Fiscal consolidation & Still-weak financial system Emerging market: Growth decrease Middle East: Geopolitical concerns High debt + Sluggish growth + Absence of global coordination ability + Protectionism floating etc. Black swan World economy % growth Global oil demand % growth Seaborne oil trades % growth <Sources: IMF, IEA, Clarkson, Hanbada> World economy -oil demand (p) 213(p) World economy -seaborne oil trades Oil demand -seaborne oil trades Correlation coefficient The above table implies the close correlation HANBADA

19 FFA Market Trends FFA TD5(SUEZMAX) Trends TD5 Q4-12 Q1-13 CAL-13 CAL WS Jan 17-Jan 31-Jan 14-Feb 28-Feb 13-Mar 27-Mar 12-Apr 26-Apr 11-May 25-May 12-Jun 26-Jun 1-Jul 24-Jul 8-Aug 22-Aug 6-S ep 2-S ep 4-O ct 18-O ct FFA TD3(VLCC) Trends 75 7 TD3 Q4-12 Q1-13 CAL-13 CAL Cal <Sources: ACM-GFI, Hanbada> Sep avg. Oct avg. MTD BITR(TD5) Q Q Cal Cal WS 3-Jan 17-Jan 31-Jan 14-Feb 28-Feb 13-Mar 27-Mar 12-Apr 26-Apr 11-May 25-May 12-Jun 26-Jun 1-Jul 24-Jul 8-Aug 22-Aug 6-S ep 2-S ep 4-O ct 18-O ct Sep avg. Oct avg. MTD BITR(TD3) Q Q Cal HANBADA

20 Fundamental Analysis % Oversupply of VLCC % Oversupply of SUEZMAX 12, 11, 1, VLCC TCE(TD3) % oversupply of VLCC , 7, suezmax tce(td5) % oversupply of suezmax 5 4 9, 8, 7, 15 6, 5, 3 2 $/day 6, 5, 4, 3, 1 5 % $/day 4, 3, 2, 1 % 2, 1, 1, (p) 215(p) <Sources: Clarkson, Hanbada> Correlation coefficient: -.7 [% oversupply estimations] % oversupply formula= (supply-demand)/supply*1 Over the past 1 yrs, Avg. demand growth rate: 2.8% 212~215 estimations: - supply: based on Orderbook and last scrap patterns - demand: avg. demand growth rate over the past 1 yrs is reflected (p) 215(p) <Sources: Clarkson, Hanbada> Correlation coefficient: -.78 [% oversupply estimations] % oversupply formula= (supply-demand)/supply*1 Over the past 1 yrs, Avg. demand growth rate:.3% 212~215 estimations: - supply: based on Orderbook and last scrap patterns - demand: avg. demand growth rate over the past 1 yrs is reflected HANBADA

21 Tanker Market Outlook The outlook appears still more uncertain in the medium to longer term. - Tanker market is made worse by oversupply of tonnages. - As a result, owners suffer from poor earnings and some still face default or bankruptcy risk. - For examples, GENMAR: filed for Chapter 11, OSG: potential Chapter 11(bankruptcy protection). - And a plan of massive vlcc orders (up to 5) in china remains the most obvious threat to the vlcc outlook. Hopefully, - We expect tanker market including vlcc to show signs of recovery in the 2 nd half of 214 or Not easy to return to the pre-crisis levels for a medium term. Asset values will be exposed to downward pressure over a considerable period of time. -2- HANBADA

22 Thanks for your Attention! -21- HANBADA