Shipping Market Outlook

Transcription

1 Shipping Market Outlook Hamburg, 19 November 15 Slide 1

2 Market Environment Structural Trends of Global Dry Market North America Lower energy prices and higher consumer confidence will bode well for container trade Latin America Expansion of low cost mines in Brazil to support iron ore trade Western Europe Slow growth in EZ and weak Euro will suppress EZ imports from Asia Africa Lower commodity prices negatively affects end consumer demand and thus pressure on seaborne container trade India Increasing coal imports to support electricity generation. Largest importer of coal. North East Asia China s transition to a consumption driven economy leads to slower growth in demand for seaborne dry bulk trade China remains the most important demand driver for seaborne dry bulk trade South East Asia & Australia Continuing expansion of low cost mines leads to increased trades out of Australia Source: DVB Shipping and Offshore Research, September 15 Shipping and Offshore Research Slide 2

3 Market Environment Structural Trends of Global Energy Market North America Shale Gas & Oil Development Leads to Excess Supply of Crude Oil, Oil Products, Chemical Products, LPG and LNG Western Europe Petrochemical Capacity Rationalization is Delaying West Africa Oil exports to be squeezed by Middle East exports towards Far East FSU Decline of oil production OECD Europe remains the main market Middle East Lifting sanction of Iran will add more oil into the market Increased long-haul trade of products from new Middle East refineries Petrochemical Industry to Expand to Downstream Sectors North East Asia China s Slow Down and China s Plan to Increase Self-Sufficiency of Chemical Products China remains to be the largest buyer for Crude oil Latin America Petrochemical projects may get reassessed, delayed or curtailed South East Asia & Australia New Liquefaction Plants Come on Stream and Start to Supply LNG Source: DVB Shipping and Offshore Research, September 15 Shipping and Offshore Research Slide 3

4 The shipping market cycle All shipping sectors are highly cyclical but different sectors have different cycles Excess of shipbuilding capacity Ship prices drop Over ordering by speculators / bargain hunters Yards reopened or new yards created Over tonnaging Demand for newbuildings increases Freight rates drop Freight rates recover Demand for newbuildings drops Fleets shrink Demolition increases Shipping & Offshore Research Slide 4

5 Flying Geese Paradigm Slide 5

6 (f) 16 (f) Shipbuilding Capacity Development 6 mn CGT 5 4 China 3 1 Korea Japan Nominal Capacity - Japan Nominal Capacity - China Nominal Capacity - South Korea Delivery o The global ship building capacity has reduced from its peak in 12 due to the adverse shipping market condition however the drop is smaller than we expected. Slide 6

7 (f) 16 (f) Global Offshore and Ship Building Capacity 8 mn CGT Global - Ship Building Global - Offshore Building o Global offshore building capacity, on the contrary, has increased constantly. Source: DVB Shipping and Offshore Research, November 15 Slide 7

8 Million CGT Some of which coming from unused Shipping capacity Global Offshore Delivery by Yard Type Ship Building Transfer Offshore Building Source: IHS, Marinebase, Clarksons, LMIU, DVB Shipping and Offshore Research Slide 8

9 Annual Offshore Vessel & Rig Orders [Number of vessels] * 15* - YTD ordering Rig orders Offshore vessel orders Source: Clarksons & RigLogix, November 15 Slide 9

10 Contracting Activities from the Shipping Market [Number of vessels] 5,315 4,42 2,822 3,319 2,772 3,4 1,3 1,252 1, ,338 1,18 1,239 2,141 2,34 1,34 1,819 1,5 2, * 15* - YTD ordering Source: Clarksons, November 15 Slide 1

11 Newbuilding Prices and Orderbook Coverage Orderbook Coverage (in Years) NB Price Index (12=1) Weighted Cost Base Weighted Cost Base Steel Price (1/3): Japan Steel Plate Price (Source: The TEX Report) Equipment Price (1/3): Producer Price Index (Source: OECD) Labor Cost (1/3): Asia Wage Index (Source: International Labor Organization) Source: DVB Shipping and Offshore Research, November 15 Slide 11

12 Who are making money? Is this trend sustainable? (This is NOT a traffic light for investment recommendation, but ONLY a traffic light focusing on the supply side risk of over contracting ie. not taking into consideration changes in the demand side) TC Rates ($/day) Operating Operating 16 Del Vs. 17 Del Vs. OPEX* Ship Type Oct-15 Cash** 14 Cash** 15 YoY% No. of Yards with OB Yard Capacity Yard Capacity VLCC 19,837 28,115 5, 11,79 16,325 38,21 134% 12 71% 27% Suezmax Tanker 16,14 22,712 39, 1,8 12,632 28,9 129% 14 74% 28% LR2 Product Tanker 16,89 17,356 3, 8,37 8,986 21,63 141% 11 82% 28% LR1 Product Tanker 14,981 15,88 26, 8,16 7,7 17,84 131% 6 71% 13% MR Product Tanker 14,351 14,63 19,5 7,87 6,76 11,63 72% 25 63% 12% 6,8 teu Containership 27,542 24,667 18, 8,98 15,687 9, -43% 3 64% 14% Capesize Bulkcarrier 15,76 21,751 1,125 7,25 14,51 2,875-8% 27 73% 21% 17 teu grd Containership 7,96 7,313 7,5 5,18 2,133 2,3 9% 18 6% 19% 275 teu g'less Containership 6,829 7,425 7,8 6,18 1,245 1,6 3% 16 6% 13% Supramax Bulkcarrier 1,34 11,385 7, 5,7 5,685 1,3-77% 48 67% 23% Panamax Bulkcarrier 1,99 12,35 7,275 6,11 5,925 1,165-8% 72 67% 25% TC Rates ($/day) Ship Type Jul-15 OPEX* Operating Cash** 14 with OB Yard Capacity 82K CBM FR LPG 31,43 51,81 55,234 9,5 42,31 45,734 8% 7 66% 23% 35K CBM FR LPG 26,492 31,452 38,631 7,73 23,722 3,91 3% 2 55% 18%.5K CBM SR LPG 3,162 33,361 3,412 6,5 26,861 23,912-11% 4 56% 17% K SS Chemical Tanker 13,438 14,42 16, 6,98 7,62 9, 28% 8 77% 37% Source: Clarksons, Maersk Broker, Drewry, DVB Shipping and Offshore Research, Oct 15 * OPEX includes DD/SS provisions ** Operating Cash is TC Rates minus OPEX Operating Cash** 15 YoY% No. of Yards 16 Del Vs. 17 Del Vs. Yard Capacity Slide 12

13 No. of Vessels No. of Vessels No. of Vessels No. of Vessels Market Environment Shipping average time to delivery at contracting Containership Contracting Ave. Months to Delivery Ave. Months to Delivery Crude Tanker Ave. Months to Delivery Ave. Months to Delivery Bulk Carrier Contracting Ave. Months to Delivery Ave. Months to Delivery Products Tanker Ave. Months to Delivery Ave. Months to Delivery Shipping and Offshore Research Slide 13

14 Fundamentals of the Container Market SCFI Index more than halved since start 15 Demand 1, ,5 1,25 1, SCFI Yearly avg. Asia Europe North America Other Sources: IHS, Clarksons, Alphaliner, MSI and DVB Shipping & Offshore Research Title of presentation Slide 14

15 Fundamentals of the Container Market Supply Shrinking GDP multiplier [mn tonnes] 25 18% 16% 14% 15 12% 1% 1 5 8% 6% 4% 2% Manufacturing cost index - % Hx & Smaller SPx Px PPx SPPx VLCS Fleet Growth Sources: IHS, Clarksons, Alphaliner, MSI and DVB Shipping & Offshore Research Title of presentation Slide 15

16 Fundamentals of the Dry Bulk Market BDI heading towards all-time low (again in 15) Import volumes 2-17 [Index] 4, [mn tonnes] , 2, 1, BDI Yearly Avg Asia Europe North America Other Sources: IHS, IMF, Clarksons, Alphaliner, MSI and DVB Shipping & Offshore Research Title of presentation Slide 16

17 Fundamentals of the Dry Bulk Market China rebalancing its economy Utilization expected to remain low [Investment share of GDP] 6% [mn dwt] 1 [Utilization rate] 92% 5% 8 9% 88% 4% 86% 3% 4 84% 82% % 8% 78% 1% % China Emerging Markets Advanced Economies Sources: IHS, IMF, Clarksons, Alphaliner, MSI and DVB Shipping & Offshore Research Title of presentation Slide 17

18 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Fundamentals of the Crude Tanker Market Billion Tonne Mile Demand TonneMile Demand vs. Yearly TC USD / Day 75, 8 65, 75 55, 7 45, 65 35, 6 25, 55 15, 5 5, 45-5, Global tonne mile demand - VLCC & Suezmax 1 Year Timecharter Rate 31, dwt D/H Modern Tanker (RHS) 1 Year Timecharter Rate 15, dwt D/H Modern Tanker (RHS) Slide 18

19 Fundamentals of the Crude Tanker Market No. of Vessels Crude Tanker Fleet Development Growth rate % 25 Forecast 7.% 6.% % 4.% 3.% 2.% 1.% -5.% % Scrapping Delivery Scrapping Forecast Delivery Forecast Slippage Supply Growth Rate% Slide 19

20 Disclaimer This presentation has been prepared by DVB Bank SE. It may not contain all relevant information in respect of the topics covered. This presentation is therefore not a sufficient basis for any investment decision. Information and opinions contained in this presentation have been compiled or derived from sources believed by DVB Bank SE to be reliable. Any statements about DVB Bank SE s market position are based on DVB Bank SE s own estimates, unless explicitly stated otherwise herein. Although DVB has checked the information contained in this presentation carefully it makes no warranty or representation as to the correctness, completeness and accuracy of the information or the assessments made. No consideration has been made of the interests and concerns of any third party and DVB Bank SE denies any responsibility howsoever arising to any third party relying on any information contained in this presentation. This summary represents the opinion of DVB Bank SE, and is intended to be for information purposes only and DVB Bank SE assumes no responsibility or legal liability for any expense, loss, damages or any action with regard to its contents. Slide