Argus European LPG Markets 2013. LPG Shipping - Current Challenges and Future Opportunities A presentation prepared by ViaMar AS, Oslo All information provided by ViaMar AS, whether oral or written, is ViaMar s present opinion, and it is subject to change without notice. Clients cannot rely solely on the information provided by ViaMar AS. ViaMar AS shall not be liable for any damages or for the breach of any warranty, expressed or implied, or for any other obligation or liability on account of the services rendered, w hether due to negligence or otherw ise
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Shipping capacity; what to expect of fleet growth
World LPG Fleet Age Distribution and Orders VLGC
Expected Inflow of New Orders
Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Growth 1,9% 8,8% 11,1% 2,7% 0,9% 1,6% 4,7% 6,1% 4,3% 5,7%
World LPG Fleet Age Distribution and Orders Medium Size
Expected Inflow of New Orders
Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Growth 6,4% 3,6% -0,2% 1,2% 1,7% -0,3% 0,9% 2,7% 4,5% 5,1%
World LPG Fleet Age Distribution and Orders Small Size
Expected Inflow of New Orders
Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Growth 4,8% 7,1% 7,4% 5,7% 5,8% 4,9% 3,9% 4,3% 4,2% 4,4%
Demand growth; where will there be growth
LPG Outlook Supply growth from the Middle East stall 2013. Growth returns 2014-15 with new volumes ex UAE. Export growth from the US (shale gas and new terminal capacity), Africa and Europe (Russia ex. Baltic and ex. Black Sea). Asian refinery growth will produce more LPG. Demand drivers: Low priced LPG: attractive to the pet chemindustry Europe and Asia. PDH in China and Turkey. Residential demand in Asia, E-Med/N.Afr. and L.Am. Japans LPG consumption shifted to growth in 2013.
Seaborne LPG Supply Growth
LPG Demand Growth VLGC Segment Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Growth 3,3% -3,1% 2,6% 5,8% 0,0% 2,5% 2,5% 9,4% 12,2% 2,2% 4,8%
AmmoniaOutlook Severe US drought 2012 give rise to increased planting and fertilizer demand in the US in 2013. Attractively priced US natgas initiate investments in the US and Canada for new ammonia production capacity. Production problems in the ME sends BS cargoes east. Iranian export volumes affected by sanctions. SorfertAlgeria plant expected start up 2013 with 800kta capacity. Sharp dropin Euro Intratradein 2012 willcontinue.
Seaborne Demand Growth Medium Size Segment Total Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Growth 1,4 % 2,5 % -5,6 % -11,8 % 11,0 % 2,4 % 0,2 % 4,7 % 4,5 % 0,8 % 0,7 %
PetrochemicalGasesOutlook Middle East ethylene production growth eases off. Iranian export hindered by sanctions. New growth in 2014/15. Slow world economic growth affects manufacturing. Apparent demand growth in China stalls. US shale gas growth to spill into increased ethylene production volumes. Ethane shipments to start in 2015. Algeria and Mexico likely starting up new ethylene crackers. Ineosnew sea terminal in Antwerp likely to have impact. PDH units coming in China, Turkey and the US.
Seaborne Demand Growth Small Size Sector Annual growth Total Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Demand 11,6 % -1,5 % 5,5 % 8,4 % 6,4 % -0,6 % 5,4 % 9,4 % 7,7 % 3,0 %
Rates and earnings; what to expect
Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Supply Growth 1,9 % 8,8 % 11,1 % 2,7 % 0,9 % 1,6 % 4,7 % 6,1 % 4,3 % 5,7 % Demand Growth -4,2 % 2,6 % 4,7 % 1,0 % 1,4 % 2,5 % 9,4 % 12,2 % 2,2 % 4,8 % Inefficiencies 7,5 % 5,0 % 4,0 % 5,0 % 5,0 % 3,0 %
Earning Forecast Large Size(VLGC)
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Supply 6,4 % 3,6 % -0,2 % 1,2 % 1,7 % -0,3 % 0,9 % 2,7 % 4,5 % 5,1 % Demand 2,5 % -5,6 % -11,8 % 11,0 % 2,4 % 0,2 % 4,7 % 4,5 % 0,8 % 0,7 % Ineffiencies 1,0 % 2,0 % 3,0 % 3,0 % 6,0 % 5,0 % 4,0 % 3,0 % 3,0 %
Earning Forecast Mid Size
Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Supply Growth 4,8 % 7,1 % 7,4 % 5,7 % 5,8 % 4,9 % 3,9 % 4,3 % 4,2 % 4,4 % Demand Growth 11,6 % -2,1 % 5,5 % 8,5 % 5,9 % -0,1 % 5,7 % 9,8 % 7,7 % 3,2 % Inefficiencies 2 % 2 % 4,0 % 3,0 % 3,0 % 3,0 % 3,0 %
Earning Forecast Small Size
Ship values; is it time to invest?
The ViaMar Asset Market Model Shipyard Capacity Orderbooks SHIPYARD CGT SUPPLY BALANCE UTILIZATION Steel price, lead time NEWBUILDING PRICE MARKET ANALYSIS SHIPYARD CGT DEMAND ORDERING ACTIVITY SECONDHAND PRICES Tankers Others Dry Bulk EARNINGS Container Gas Tankers
Conclusions on Investments Gas SHV10 Time to Buy Time to do nothing Time to Sell VLGC 35k Gas 10-20k Gas 3,5k Gas
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