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Presentation to SAMI (Security Association for the Maritime Industry) London 2nd October 2013
Steve Gordon, Managing Director Clarkson Research Services Limited
Agenda
1. Market Position 2. Seaborne Trade 3. World Fleet & Shipbuilding 4. Ownership 5. Summary
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1. Market Position
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Index avg value 00s: $21,690/day Index avg value 2012: $9,957/day
40
30
2000 c.$24,000/day
20
27th September 2013 - $12,298 / day highest level this year, driven by improved Capesize market.
10
0
1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
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Crude still struggling but Products & Chemicals better Some signs of improvement but rates still low by historical standards Earnings remain close to historic lows
This chart shows average earnings for each ship type as at September 2013 compared to the average 1 year timecharter earnings during the last 10 years.
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Shipping Downturn
$000/day 50 45 40 35 30 25 20 15 10 5
1. Huge Cash Pressures & Cost Focus 2. Surplus in the Volume Markets 3. Cash is King
September over $12,000 / day but fell as low as $7,920 / day in February
27th
4. Wide Spread Of Trading Regions & Demand OK 5. Some Sectors Better Position Small & Niche 6. Ships Still Trading & Slow Steaming but Not Laid Up 7. Big Change in Ship Economics Fuel & Regulations
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2. Seaborne Trade
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-6%
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4.1% average
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Chinese imported around 20% of world total imports in 2012, more than N. America or Japan. In term of tonnage imports behind only the rest of Asia combined and Europe. Asia-M.East region imports 52% of world seaborne trade, exports account for 38%.
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According to approximate projections Chinese import growth could account for 46% of the growth in tonnes in global seaborne imports, with other Indian imports accounting for 11% and other Asian economies 19%.
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M. tonnes
We expect trade to grow by 4-5% in 2013 but risks remain given economic developments / uncertainty and there is a lag on trade data. China accounts for over 40% of the growth in imports in the past decade. For planning purposes, 4% per annum growth in trade over the next decade does not seem unreasonable, backed by continued development of the globalised world economy. Our long-term sector-by-sector assumptions support this level of growth projection.
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Structural Patterns
US energy balance China and India Containers : Asia and Panama Offshore energy contribution Africa : energy and minerals Unlocking the Arctic Wildcards
Wildcards?
Globalisation vs Protectionism; Reshoring Political instability Fuel prices Infrastructure and supply Global economic growth story
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London, September 2013 | OFC Club Shipping Market Overview | Clarkson Research
Explosion in exploration activity since Q1 2010 following Anadarkos Windjammer gas discovery in Area 1 offshore Mozambique: 46 successful exploration and appraisal wells
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Merchant Fleet August 2013: 1. 87,071 vessels over 100 GT 2. 1,120 million GT 3. $850 billion value
Numb ers Tankers Bulkers Containerships MPP Ro Ro Other Dry Parcel and Specialised LPG LNG PCC Reefer Offshore Dredgers Tugs Cruise Ferries Other 11,611 9,527 5,106 3,169 1,346 16,740 1,905 1,250 373 748 1,450 9,960 2,158 15,287 358 5,985 618
Tonna ge (GT) 273.3 378.2 180.4 21.0 16.1 30.3 14.8 13.4 37.2 34.5 5.0 48.3 4.4 4.2 17.3 15.9 1.0
Growth 2009-12 (GT) 13% 47% 24% 6% -2% -2% 3% 7% 12% 20% -21% 25% 20% 14% 15% -2% 1%
O/B as % Fleet 11% 18% 20% 8% 10% 4% 5% 13% 24% 7% 0% 22% 6% 1% 16% 2% 0%
Merchant Fleet 1. 87,590 vessels over 100 GT 2. 1,098 million GT 3. $807 billion value
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50%
26%
16%
0% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
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Gas 14.5%
Contship s 21.4%
Construction 11%
Support Vessel fleet 0 500 1,000 1,500 2,000 2,500 3,000 3,500
September 2013 www.clarksons.com
500 400
60 300 200 100 0 <=1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 45 30 15 0
$/day
25,000
20,000
15,000
10,000
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
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Fleet
90
Orderbook
Contracting
Demolition
70
50
30
10 1971* 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016+
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-10
10% 9%
By 2023 our forecasts suggest the fleet will top 1.5 billion GT
1,000
800
7% 6%
600
5% 4%
400 3%
200
2% 1% 0%
0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
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Greece China
Japan Germany
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Offshore Flag Tonnage Nudges 1 Billion GT 72% of the merchant fleet is now registered offshore - up from 42% 23 years ago The UN based system is facing complex technical challenges. Surge of piracy raises many issues about global maritime regulation.
800
Top 5 Flags: Panama, Liberia, Marshal Is., HK, Singapore. First national flag is China in 8th position.
Piracy Incidents
Region/Ship Type No Incidents 2010 E.Africa-Aden-MG South & East Asia West Africa Other Oil Tankers Bulk Carriers General Cargo Specialised Non-Cargo TOTAL 82 27 12 4 38 31 33 14 9 125 2011 145 64 32 11 77 63 54 30 28 252 2012 63 107 51 25 80 62 48 29 27 246 Vessels Captured 2010 26 1 0 0 8 6 9 3 1 27 2011 22 1 6 0 10 10 3 5 1 29 2012 6 1 2 0 5 2 2 0 0 9
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Piracy Incidents
5. Summary
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Summary
In 2013, we have been at the bottom of the cycle and market conditions are still very challenging. Some of the niche sectors have been better positioned Offshore, Gas, Chemicals, Products. Following the demand shock in 2009, trade has recovered well and we expect 4% growth in 2013. In 2014 we forecast trade will top 10 billion tonnes for the first time. 4% is a good base case for the future assuming globalisation. Fleet growth is slowing, from 8% in 2011 to 5% in 2012. We expect growth to drop to 4% in 2013 but watch out for further ordering. Despite the poor spot market conditions, we have seen newbuild interest from investors in 2013 but the relative product mix has changed with offshore and gas prominent. Regulatory Economics & Fuel Economics are driving current investment. Financing remains difficult and has limited investment but there are new sources. Asian owners growing market share with double the fleet growth of Europeans in 2013. Greeks and Japanese the largest owners but China has surged past Germany. Norwegians, Greeks and Chinese have topped the investment charts in recent years.
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Stephen Gordon Managing Director Tel: +44 (0) 207 334 3439 Email: stephen.gordon@clarksons.com
Anna Trznadel Sales and Marketing Tel: +44 (0) 207 334 5460 Email: anna.trznadel@clarksons.com
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The information supplied herewith is believed to be correct but the accuracy thereof is not guaranteed and the Company and its employees cannot accept liability for loss suffered in consequence of reliance on the information provided. Provision of this data does not obviate the need to make further appropriate enquiries and inspections. The information is for the use of the recipient only and is not to be used in any document for the purposes of raising finance without the written permission of Clarkson Research Services Limited. The statistical and graphical information contained herein is drawn from the Clarkson Research Services Limited ("CRSL") database and other sources. CRSL has advised that: (i) some information in CRSL's database is derived from estimates or subjective judgments; and (ii) the information in the databases of other maritime data collection agencies may differ from the information in CRSL's database; and (iii) whilst CRSL has taken reasonable care in the compilation of the statistical and graphical information and believes it to be accurate and correct, data compilation is subject to limited audit and validation procedures and may accordingly contain errors; and (iv) CRSL, its agents, officers and employees do not accept liability for any loss suffered in consequence of reliance on such information or in any other manner; and (v) the provision of such information does not obviate any need to make appropriate further enquiries; (vi) the provision of such information is not an endorsement of any commercial policies and/or any conclusions by CRSL; and (vii) shipping is a variable and cyclical business and any forecasting concerning it cannot be very accurate.
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