ICS DRY BULK CONFERENCE NOVEMBER 20 TH. PB Vancouver 1

Transcription

1 ICS DRY BULK CONFERENCE NOVEMBER 20 TH PB Vancouver 1

2 Overview The dry bulk market has disappointed after Q We have had the unusual situation where the Pacific is out performing the Atlantic. Supply side has developed as expected and net fleet growth is at 10 year lows. Reduced congestion in the Atlantic has negatively affected the Atlantic market. Iron ores trades are showing good growth in 2014, helping the capes. Coal trades have disappointed especially to China due to increased rainfall and greater hydro-electric output in Minor bulks have performed reasonably well but remain weighed down by the Indonesian export ban for nickel ore and bauxite trades. The growth rate for the Chinese economy has disappointed of late but with low level of inflation could be positioned for stimulus efforts. Dry bulk confidence has been hit and the traditional Q4 rally has failed to materialise except for capesize. PB Vancouver 2

3 A long term view on dry bulk freight rates Given that we are here now, how much do you need to worry about downside for future freight rates? PB Vancouver 3

4 BHSI (Handysize index) Higher start to the year Steep recovery and then ooopps Lower bottom PB Vancouver 4

5 Handysize - where are we today? Pacific out performing Atlantic. Coming off the high and now falling off again. Has Q1 dip come early? Atlantic has struggled all year. False upswing commenced August, ended mid October! Where has the Q4 uptick gone? PB Vancouver 5

6 Handysize and handymax TCE in 2014 by quarter PB Vancouver 6

7 Pacific outperforming Atlantic??? PB Vancouver 7

8 THE DEMAND SIDE PB Vancouver 8

9 The latest demand forecast from Platou has been revised down Total Demand growth including tonne miles, slow steaming, China coastal, congestion etc. PB Vancouver 9

10 YOY growth in Chinese drybulk demand imports 2013 /2014 Change in million tonnes from previous year PB Vancouver 10

11 Minor bulks weighed down by Indonesian export ban of nickel ore PB Vancouver 11

12 Chinese steel export is growing strongly Chinese steel export is increasing strongly but China is still punching below its weight as a World steel giant Chinese steel trade Million tonnes annualised 45% 40% 35% 30% 25% % World steel trade as % of world steel production World Steel trade 2013 by area (mill tonnes) % Total imports from all countries Imports from China Chinese steel imports are flat PB Vancouver 12

13 A broad overview of drybulk demand the last 10 years 160 Minor bulks suffered the most in the financial crisis but has since 2009 come back strongly I ore Coal Grains Minor Tonne-mile index basis 2009 = 100 The winner in 2014 is iron ore whereas the others have a more mixed picture affected by unusual events such as lower prices (coal), Indonesian ore export ban (minors), reduced port congestion in South America (grain) (e) PB Vancouver 13

14 Chinese log imports PB Vancouver 14

15 A long term view on BC Columbia logs exports British Columbia Logs Exports By destination Mill cu.m. per annum Others S Korea China Japan USA China has had a major impact on BC Columbia exports since e PB Vancouver 15

16 Increasing trend for Chinese imports of logs from NZ/Australia and USA/Canada Chinese log imports Mill cu.m / month 2mos rolling avg Russia -1% Annualised growth rate Chinese total imports of logs are up 27% in the year to date PB Vancouver 16

17 THE SUPPLY SIDE PB Vancouver 17

18 A long term view on dry bulk fleet growth PB Vancouver 18

19 Fleet growth by drybulk sector DWAT PB Vancouver 19

20 Proforma order book as of Oct 10 th 2014 This is proforma and actual deliveries will be different. Still early days for PB Vancouver 20

21 In % of fleet The past orderbook vs deliveries and a view on the future 30% 25% 20% 26% 24% 21% Delivery years 2015 & 2016 are more or less fully booked but there will be some adjustments as delayed deliveries are moved forward, hidden orders are added and dead ones are removed 15% 10% 5% 0% 16% 17% 15% Scheduled deliveries at the start of each year 14% 9% Shortfall reducing in the foreseeable future 10% 9% 7% 7% 7% Current o'book % 1% Two scenarios for 2017: If we have a strong market for the next 18 months, the orderbook could increase significantly If we have a weak market the orderbook will stay low 2017 is still very much open book PB Vancouver 21

22 In % of fleet 20% 15% Annual growth in shipping supply 14% We are guessing steady supply growth for the period % 14% IMPORTANT: Line does not match the bars because it is measured as growth in average size of the fleet per year. Net fleet change is also affected by tanker conversions and other fleet changes Handysize is more benign in terms of greater portion of older vessels (scrapping pool) than the rest of drybulk 10% 25% 5% Deliveries 8% 5% Growth range 20% 21% 0% 16% 17% 15% 9% 7% 7% 7% -2% -5% -6% -4% -2% 15% 10% -5% 5% 8% Scrapping -10% % % of fleet 1over 20 years of age PB Vancouver 22

23 World shipyard output (for all vessel types) is evil for shipping but has reduced significantly World Shipyard Output Mill dwt per year Output in 2014 has halved since peak Peaking in 2011 Some of this reduction is due to yard closures but it is mostly caused by yards slow steaming production to improve their bottom line. They can speed up but this requires an improved shipping market e 12% 11% 10% Bear in mind that the world fleet has doubled in the last 12 years 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% World Shipyard Output in % of World Fleet Dwt basis World shipyard output should be seen in light of the size of the World fleet e PB Vancouver 23

24 Handysize deliveries & scrapping Handysize deliveries and scrapping Mill dwt / month Heavy scrapping last year Healthy delivery and scrapping ratio PB Vancouver 24

25 Compared to handy/supra/ultra max s Handymax deliveries and scrapping Mill dwt / month PB Vancouver 25