04 Martin Stopford Marine Money 21st Feb 2013 PDF

Marine Money 21st Feb 2013
20/2/2013
President,
Clarkson Research
What to
Expect
From the shipping
markets
Future vision of maritime Industry
Martin Stopford
Ship Finance at the Crossroads

Marine Money Hamburg
21st February 2013
So Many
challenges, so
many
expectations
1.
2.
3.
4.
5.
Long Cold Winter

Costly Bunkers, Cheap Ships
Geopolitical Change
Evolving Offshore Era?
New Container Business Model
What makes the business climate so difficult today is that shipping investors must deal
with several major changes taking place simultaneously. What are the challenges, how
will they interact and where they might lead?
Martin Stopford, President, Clarkson Research
W
H
E
R
E
20/2/2013
Increasing
investments is
not the plan"
We build
ships.. so
please ORDER
SOME!
What shall I
buy now?
A
R
E
W
E
T
O
D
A
Y
?
2. Shipbuilders...??!!
1. Ship owners are restless

Shall we say
30 cents in
the $, Sir?
3. Shippers happy
Shippings
Wild West is
being tamed
What about
our $1.2
billion loan?
4. Financiers are VERY fragile
5. Governments intervening
Expectation 1: Long, Cold Winter?

The immediate challenge is to get through the recession in one piece.
It's gonna be
cold, it's gonna
be grey, and it's
gonna last
It is the 22nd trough

since 1741 and could
drag on
Take it seriously
20/2/2013
Shipping Cycle 1965-2013

50
2004
$39,000/day
45
Clarksea Index $000/day
2008
$50,000/day
40
35
2000
$24,000/day
Wow
30
25
2013
$7,910
20
15
10
5
$14,000/day
$9,938/day
New low of $7,900 per day in Feb 2013

$8,500/day
$12,000/day
$22,800/day
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
Clarksea Index : weighted average earnings by tankers, bulkers, containerships & gas
Not Much Laid Up Tonnage

100.0
90.0
80.0
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0.0
Bulkers
Tankers
% Tanker TC
% on T/C
In the
1970s the
spot
market
was smallmost of the
fleet on
Laid up tonnage (not
charter really tracked) is still low.
Surplus absorbed by
slow steaming, waiting
etc
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
M dwt
Shows tonnage of ships laid up on a monthly basis
Copenhagen BLUE Business & Shipping

Conference
25/01/2013

50
45
2008
$50,000/day
(Clarksea Index is a weighted average of earnings by

tankers, bulkers, containerships & gas.)
2004
$39,000/day
40
35
2000
$24,000/day
Extraordinarily
prosperous
30
25
20
15
10
5
$14,000/day
$9,938/day
$8,500/day
$12,000/day
$22,800/day
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

50
45
2008
$50,000/day
(Clarksea Index is a weighted average of earnings by

tankers, bulkers, containerships & gas.)
2004
$39,000/day
40
35
2000
$24,000/day
Wow
30
25
20
15
10
5
Here
$14,000/day
$9,938/day
$8,500/day
$12,000/day
$22,800/day
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
20/2/2013
Three Speed Trade

Container cargo still growing very fast
% growth
Major Bulks
Container
15%
Crude Oil Imports

Linear (Container)
Containers
10%
5%
0%
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
-5%
The Merchant Shipbuilding Cycle

Shipyards expand to replace the ships built in the 1970s boom
Million Dwt
Deliveries
160
Deliveries
162.8 m dwt
in 2012 (est)
140
120
100
80
Scrapping
Deliveries
61 m dwt in
1976
60
FORECAST
Last phase
of 1970s
scrapping!
40
20
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
2014
2016
2018

Conference
25/01/2013
World Shipping Supply/Demand

World Cargo Fleet 1963-2013
M. Dwt
1800
Surplus shipping
capacity (% right axis)
1600
1400
% Surplus
From 2009 world fleet (mid

year) surges ahead of
demand
Demand for sea
transport runs
ahead of supply
1200
45%
40%
35%
30%
25%
20%
1000
15%
800
10%
600
5%
0%
400
-5%
200
-10%
-15%
1965
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
Change 2: The Cost Of Energy

THE SHIP USED TO COST MUCH MORE THAN BUNKERS BUT. TODAY BUNKERS COST MORE THAN THE SHIP.
40,000
$/day cost
35,000
30,000
2005
Ship costs
3x fuel
2012
Ship costs
half fuel
25,000
20,000
15,000
10,000
Bunker cost
1 Year TC Rate
5,000
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Based on Aframax tanker, 1 year TC rate and Rotterdam bunker price

Conference
25/01/2013
Shipbuilding Deliveries Now 10% fleet

% per
annum
growth
Compares the % growth of trade with shipyard deliveries % fleet
11%
Trade growth (5 yr average)
9%
Deliveries % Fleet
7%
5%
3%
1%
-1%
-3%
2011
2009
2007
2005
2003
2001
1999
1997
1995
1993
1991
1989
1987
1985
1981
1983
1979
1977
1975
-5%
Three Speed Trade

% growth
15%
Container cargo still growing very fast
Major Bulks
Container
Crude Oil Imports

Linear (Container)
Containers
10%
5%
0%
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
-5%

Conference
25/01/2013
The Merchant Shipbuilding Cycle

Shipyards expand to replace the ships built in the 1970s boom
Million Dwt
Deliveries
Deliveries
Scrapping
169.3 m
dwt in
2012 (est)
160
140
120
FORECAST
Deliveries 61
m dwt in 1976
100
80
Last phase
of 1970s
scrapping!
60
40
20
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
2014
2016
2018
Sea Trade Growing About 3% a Year

% per
annum
growth
Graph shows 5 year moving average of % growth of sea trade
11%
9%
Note surge to 5% pa in 2000s
7%
5%
Trend about 3% pa
3%
1%
-1%
-3%
2011
2009
2007
2005
2003
2001
1999
1997
1995
1993
1991
1989
1987
1985
1983
1981
1979
1977
1975
-5%
20/2/2013
50%
45%
40%
35%
30%
25%
20%
15%
China overtakes Korea

China
Korea
Japan
10%
5%
0%
Europe
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
% CGT Deliveries
World Shipbuilding Shares
Orderbook in 2013 Nearly the 1990s

Orderbook % Fleet (Dwt)
60%
51%
% fleet (Dwt)
50%
47%
41%
40%
33%
30%
24% 25%
20%
20%
10%
36%
10% 10% 11% 11% 11%
14% 14% 14%
16%
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
0%
20/2/2013
The Expansion Demand For New Ships

170
150
M. Dwt ship
demand
This chart suggests that the need for new ships to expand
the fleet did not grow all that fast in the last decade,
especially when troughs are taken into account
130
110
90
1967-1973 trade
grew at 203 m
tonnes a year
70
50
2002-2008 trade
grew at 267 m
tonnes a year
30
10
-10
Expansion demand
Chart shows Trade expansion each year converted into dwt demand
1950
1952
1954
1956
1958
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
-30
Expansion demand
Now Add Replacement Demand

M. Dwt
170
150
130
110
Now add the tonnage of ships replaced each

year to give the total requirement for new
ships. The average 2003-2012 was 56m dwt
90
Average 56 m dwt pa
70
50
30
10
Expansion demand
Expansion demand
-10
1950
1952
1954
1956
1958
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
-30
20/2/2013
Now Compare Demand With deliveries

DELIVERIES
DWARF DEMAND
SO IT WILL TAKE
A WHILE TO CLEAR THE
BACKLOG
Expansion demand
Expansion demand
Expectation 2: Cheap Ships, Costly Energy

THE SHIP COST MORE BUNKERS BUT TODAY BUNKERS COST MORE
40,000
$/day cost
35,000
2005
Ship costs
3x fuel
30,000
2012
Ship costs
half fuel
25,000
20,000
15,000
10,000
Bunker cost
1 Year TC Rate
5,000
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Based on Aframax tanker, 1 year TC rate and Rotterdam bunker price
20/2/2013
Fuel Consumption Ships

Index of fuel consumption in MPG
(higher is better)
150
Panamax bulker
140
Panamax containership
130
120
110
100
90
2011
2009
2007
2005
2003
2001
80
1999
Fuel consumption of
ships has not improved
much in the last 13
years
The containership
consumption was about
140 tpd at 24.5 knots
(latest 136 tpd)
The bulker was about
35 tpd at 14.5 knots
(latest 33 tpd)
Fuel Consumption Cars

Index of Miles Per Gallon
150
Ford Focus
Panamax bulker
140
130
120
110
100
90
2011
2009
2007
2005
2003
2001
80
1999
Fuel consumption of
cars did not improve
much until last year
The Ford Focus 1.6
Zedtec averaged about
39 mpg.
The 2011 models
pushed that up to 47
mpg and the 2012
model to 56 mpg
20/2/2013
Fuel Consumption Cars

Index of Miles Per Gallon
Fuel consumption of
cars did not improve
much until last year
The Ford Focus 1.6
Zedtec averaged about
39 mpg.
The 2011 models
pushed that up to 47
mpg and the 2012
model to 56 mpg
150
Ford Focus
Panamax bulker
140
130
120
110
100
90
slower
2011
2009
2007
2005
2003
2001
1999
80
Less Horsepower, Less Losses

Index covers tankers, bulkers, LPG and containers
50
Number
of
months
45
slower
40
35
need flexi-speed?
SLUMP
30
today we are here, the

lowest since 1990
25
23
10
10
5
10 10
BOOM
33
24
20
20
15
NORMAL
faster
19
12
14
11
18
13
20
13
Months since 1990 that Clarksea Index fell

in each earnings band shown below
7
3 3
under 8.5
8.5-9
9-9.5
9.5-10
10-10.5
10.5-11
11-11.5
11.5-12
12-12.5
12.5-13
13-13.5
13.5-14
14.14.5
14.5-15
15-20
20-25
25-30
30-35
35-40
40-45
45-50
Clarksea Index earnings band $000/day
More Horsepower, More Profits
faster
20/2/2013
My Expectation For the Future is Flexible

77,000 Dwt Panamax Bulk Carrier
1. De-rate engine
for improved
grams/kWh
3. Cut out one

turbo charger &
slide injectors
5. Tune Engine
with electronic
control system
7. Improved trim
management
Crane
Side rolling
hydraulic
hatch covers
Steering gear
room
7 cargo holds, each with capacity for 1213,000 m3 or 1011,000

tons depending
on density of cargo being carried
Hatch
No 4 hold floodable for extra
coaming water ballast in heavy weather
Anchor
Water line
No 7 hold
12,200 m3
Prop shaft
No 6 hold
13,000 m3
Main engine
12,670 HP at 89rpm
2. New propeller
tuned to revised
engine spec
No 5 hold
13,000 m3
No 4 hold
12,300 m3
floodable
No 3 hold
13,000 m3
No 2 hold
13,300m3
No 1 hold
12,600m3
Double bottom used for water ballastCorrugated bulkhead
4. Waste heat
recovery system
6. Improved low
load cylinder
lubrication
14.2
metres
draft
8. Hull coatings,
less ballast, air
resistance etc.
225 m LOA, 77,000 dwt
Expectation 3: Changing Geopolitical Scene

THE OECD COUNTRIES NO LONGER DOMINATE SEA TRADE
07/03/2013
Martin Stopford
20
10
20/2/2013
The World is Changing 1990

S America
5%
Africa
5%
M. East Oceania
1%
3%
China
2%
W Europe
36%
SE Asia
14%
OECD 70%
Japan
18%
N America
16%
The World is Changing 2012

M. East Oceania
Africa
1%
3%
5%
S America
5%
China
22%
W Europe
21%
N America
11%
Japan
9%
SE Asia
23%
OECD 41%
11
20/2/2013
Expectation 4: Dominant Offshore Flag Era

72% OF THE WORLD FLEET FLAGGED ABROAD & GROWING
1,000.0
National & Foreign Flag Fleets M GT

, , 0%
995
900.0
852
National
flag 396 m
dwt, 28%
800.0
700.0
800
748
699
649
Foreign
Flag 995m
dwt, 72%
600.0
500.0
603
552
441 451
400.0
294
300.0
237
335
311 323
359
383
486 501
468 480
407 407
National flag fleet
255
200.0
Foreign flag fleet
100.0
-
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
Flag State Regulation Will Get More

Technical (like airlines?)
Requirement that new ships must
comply with the EEDI, attempts
to drive efficiency improvements
The focus on
air emissions
ballast water;
recycling;
energy efficiency and
the carbon footprint.
The dilemma of gas oil versus

scrubbers and the uncertainty
over of which ballast water
system technology do not help
Many shipyards, after a decade
when they were able to sell
standard ships, are struggling to
respond.
12
20/2/2013
Expectation 5: New Container Business Model?

The Container Business Model is Tired
Billion tons
Over the centuries technical

developments in liner shipping
has been not so much a
continuous process as an
occasional leap forward
precipitated by a compelling
call for change.
1.8
1.6
Will the exponential

trend of 8.8% trend
continue?
1.4
1.2
1.0
0.8
In between there have been

long periods of conservatism".
0.6
Ronnie Swayne, Chairman OCL 1973
0.2
0.4
This chart shows container

cargo growing to 1.5 billion
tonnes today. In 2009 the
trade had its first serious
wobble.
y = 6.5684e 0.0888x
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
0.0
General Cargo Transport

In the 1950s, the ocean-going freighter was dying. The
general forecast was that it would be replaced by air freight,
except for bulk commodities.
Costs were rising and it took longer to get merchandise
delivered by freighter as one port after another became badly
congested.
This, in turn, increased pilferage at the docks.
In response the industry built faster ships, and ships that
required less fuel and a smaller crew. It concentrated on the
economics of the ship while at sea and in transit from one
port to another costs that were already low
The solution was to uncouple loading from stowing. Do the
loading on land, where there is ample space and where it can
be performed before the ship is in port, so that all that has to
be done is to put on and take off pre-loaded freight.
13
20/2/2013
Container Fleet By Ownership

9,000
8,000
Billion tonnes of cargo
7,000
Charter
Owner
50%
Serive
Operator
Owned
50%
6,000
5,000
Container Fleet Oct 2012
4,000
3,000
2,000
1,000
OWNED BY SERVICE OPERATORS
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
Jan-04
Jan-05
Jan-06
Jan-98
Jan-99
Jan-00
Jan-01
Jan-02
Jan-03
Jan-96
Jan-97
Conclusions on Managing Change

1. Key strands in strategy are:2. Manage through the supply
overhang: Lower earnings in coming
decade will make cost control key,
so play the margins.
3. Adjust to bunker cost regime: its
changing the balance of maritime
economics
4. Adapt to Change: The world is
changing - remember that
recessions are there to drive
shipping to respond to these
changes
Amarillo Slim, was four

times the World Poker
champion. His tips are:-
14

Conference
25/01/2013
The Ship Speed & Consumption Matrix
Shows effect on fuel cost (green lines) & the cost of shipping capacity (brown line) of changing
ship operating speed in 1 knot increments on a 5000 mile voyage)
S h ip c o s t c h a n g e $ 0 0 0 a s s h ip s lo w s
120
100
80
4
60
3
40
20
0
15
14
13
12
11
10
Speed of ship (knots)
Future of Fuel will be Frugal

Higher cost is changing the economic balance
and behaviour will change
Things that did not work will now work, but it
will take time and committment
Charterers will become more fuel conscious.
Look for the pressure points: Direct consumption v indirect consumption
Measurement of efficiency
Marketing and public image

Conference
25/01/2013
Change 3: Geography & Political Hegemony
25/01/2013
Martin Stopford
19
The Changing World

7.50
Japan
6.30
Europe
3.80
N. America
China
S America
Africa
1950-2000
OECDs 1.3 billion
population
0.8
0.6
0.20
2000-2050
6 billion Non-OECD
population want to
consume at OECD levels
0 1 2 3 4 5 6 7 8 9 10 11 12
Tonnes of sea imports per person a year
10

Conference
25/01/2013
The Changing World of Trade

Sea Trade in 2011
W Europe
OECD
42%
N America
Africa
5%
S America
5%
Japan
SE Asia
M. East Oceania
1%
3%
W Europe
21%
China
Non
OECD
58%
S America
Africa
China
22%
N America
11%
M. East
Japan
9%
SE Asia
23%
2,500
2,000
1,500
1,000
500
Oceania
Million tons imports
World Sea Trade Scenario
Will Sea Trade will grow from 10 billion tons to 27 billion tons?
30
27
Total Trade
Sea Trade Scenario
Billion tons trade
24
27 billion tons of trade

in 2057 looks extreme.
If it happens, will it put
pressure on resources
21
18
15
12
9
6
3
2055
2050
2045
2040
2035
2030
2025
2020
2015
2010
2005
2000
1995
1990
1985
1980
1975
1970
1965
1960
1955
1950
11

Conference
25/01/2013
The Future Geopolitical Landscape

The USA Hegemony was a
major driver of
globalization.
It has been fading since the
1970s and this will weaken
future trade
China is different less
dominant, more imperialist
The future has less low
hanging fruit, more conflicts
of interest, more active
trading partners.
Change 4: Flag State Regulation Escalating
Requirement that new ships must

comply with the EEDI, a clear
attempt to drive efficiency
improvements
The focus on
air emissions
ballast water;
recycling;
energy efficiency and
the carbon footprint.
The dilemma of gas oil versus

scrubbers and the uncertainty
over of which ballast water
system technology do not help
Many shipyards, after a decade
when they were able to sell
standard ships, are struggling to
respond.
12

Conference
25/01/2013
Merchant Shipping Offshore Trend Continues

National & Foreign Flag Fleets M GT
900.0
Foreign Flag
800.0
700.0
National Flag
600.0
500.0
400.0
300.0
200.0
100.0
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
Offshore Flag Tonnage

Nudges 1 Billion GT
72% of the merchant
fleet is now registered
offshore
Up from 42% 23 years
ago
We are evolving into a
truly stateless industry
1,000.0
W orld fle e t
Owne rship
N a tiona l
Fore ign
T ota l
1989
334.3
237.2
571.5
1997
295.0
407.3
702.4
2009
347.0
748.0
1,105.0
M dwt
2012
396.5
995.3
1,391.8
N a tiona l
Fore ign
T ota l
58%
42%
100%
42%
58%
100%
31%
68%
100%
28%
72%
100%
Top Shipowning Nations 2012

M GT
Japan
Greece
Germany
China
USA
S Korea
Chinese
Bermuda
Norway
Denmark
Canada
Taiwan
Singapore
UK
Russia
Flag of Registration
National
Foreign
Total
Foreign %
20.5
197.2
217.7
91%
64.9
159.1
224.1
71%
17.3
108.3
125.6
86%
51.7
72.3
124.0
58%
7.2
47.5
54.6
87%
17.1
39.1
56.2
70%
4.1
35.0
39.0
90%
2.3
27.7
30.0
92%
15.8
27.3
43.1
63%
13.5
26.5
40.0
66%
2.5
19.4
21.8
89%
28.9
16.6
45.5
36%
22.1
16.5
38.6
43%
2.0
16.4
18.4
89%
5.4
15.0
20.4
73%
13

Conference
25/01/2013
Top FLAG STATES IN 2012

Top 10 Flag States
Status
Panama
Open
Liberia
Open
Marshall Is Open
Hong Kong Open
Singapore Open
Bahamas
Open
Malta
Open
China
National
Greece
National
Cyprus
Open
2008 2012 % Increase

182.9 227.5
24%
81 128.5
59%
44.1
84.6
92%
39.3
77.2
96%
40.3
58.2
44%
47.5
54.7
15%
29.2
44.1
51%
27.2
43.6
60%
36.7
43.1
17%
20.4
20.5
0%
548.6 782.0
43%
The Future of Regulation

The UN based system is
fragile and struggling
with complex technical
challenges
The Port state regime is
impulsive, proactive and
politically motivated
Surge of piracy has raised
many issues about the
policing of trade lanes
14

Conference
25/01/2013
Change 5: Information & Communications

Gordon
Moore
Invented Moores Law
Fibre optic cable network
Conclusions on Strategy
1. Key strands in strategy are:2. Manage through the supply
overhang: Lower earnings in coming
decade will make cost control key,
so play the margins.
3. Adjust to bunker cost regime: its
changing the balance of maritime
economics
4. Adapt to Change: Ship designs
changing due to regulations. Make
sure todays eco-ship isnt
tomorrows White Elephant.
Amarillo Slim, was four

times the World Poker
champion. His tips are:-
15

Conference
25/01/2013
1. Play the players, not the cards.

2. Watch them from the minute
you sit down.
3. Play fast in a slow game , slow in
a fast game.
4. Never get out when you are
winning.
5. Look for the sucker and, if you
dont see one , get up and leave
because the sucker is you
Amarillo Slims Advice
16

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Marine Money 21st Feb 2013

Future vision of maritime Industry

Ship Finance at the Crossroads

Long Cold Winter

Martin Stopford, President, Clarkson Research

Marine Money 21st Feb 2013

1. Ship owners are restless

4. Financiers are VERY fragile

Expectation 1: Long, Cold Winter?

It is the 22nd trough

Martin Stopford, President, Clarkson Research

Marine Money 21st Feb 2013

Shipping Cycle 1965-2013

New low of $7,900 per day in Feb 2013

Not Much Laid Up Tonnage

Shows tonnage of ships laid up on a monthly basis

Martin Stopford, President, Clarkson Research

Copenhagen BLUE Business & Shipping

Shipping Cycle 1965-2013

(Clarksea Index is a weighted average of earnings by

Clarksea Index $000/day

Shipping Cycle 1965-2012

(Clarksea Index is a weighted average of earnings by

Clarksea Index $000/day

Martin Stopford, President, Clarkson Research

Marine Money 21st Feb 2013

Three Speed Trade

Crude Oil Imports

The Merchant Shipbuilding Cycle

Martin Stopford, President, Clarkson Research

Copenhagen BLUE Business & Shipping

World Shipping Supply/Demand

From 2009 world fleet (mid

Change 2: The Cost Of Energy

Based on Aframax tanker, 1 year TC rate and Rotterdam bunker price

Martin Stopford, President, Clarkson Research

Copenhagen BLUE Business & Shipping

Shipbuilding Deliveries Now 10% fleet

Compares the % growth of trade with shipyard deliveries % fleet

Three Speed Trade

Container cargo still growing very fast

Crude Oil Imports

Martin Stopford, President, Clarkson Research

Copenhagen BLUE Business & Shipping

The Merchant Shipbuilding Cycle

Sea Trade Growing About 3% a Year

Graph shows 5 year moving average of % growth of sea trade

Note surge to 5% pa in 2000s

Martin Stopford, President, Clarkson Research

Marine Money 21st Feb 2013

China overtakes Korea

World Shipbuilding Shares

Orderbook in 2013 Nearly the 1990s

10% 10% 11% 11% 11%

14% 14% 14%

Martin Stopford, President, Clarkson Research

Marine Money 21st Feb 2013

The Expansion Demand For New Ships

Now Add Replacement Demand

Now add the tonnage of ships replaced each

Martin Stopford, President, Clarkson Research

Marine Money 21st Feb 2013