RS Platou Monthly February 2015

Transcription

1 RS Platou Monthly February 15 Monthly year on year growth, tanker fleet (1, dwt +) 1 1 Analytical topic of the month: Dry Bulk market any light at the end of the tunnel? Page Percent Analyses and comments.. World economy and world shipping.. 3 Monthly year on year growth, dry bulk fleet (1, dwt +) Percent 1 Newbuilding. Tankers Freight market.. 5 Tankers Sale and purchase.. Bulk carriers Freight market 7 Bulk carriers Sale and purchase.. Cellular container ships 9 LNG carriers 1 Representative newbuilding contracts 11 Representative second hand sales Contact list.. 13 P.O. Box 1 Vika Tel.: ecr@platou.com Shipbroking Oslo Haakon VII's gate 1 Fax: N 119 Oslo, Norway

2 RS Platou Monthly February 15 Analyses and comments Dry Bulk market any light at the end of the tunnel? Even though the start of this year was expected to be weak for dry bulk shipping, most market participants had probably not anticipated such a collapse in earnings witnessed over the last two months. Freight rates for all sizes have dropped to the $ 5, per day, hardly cover operating costs. Import data for January show a 55 percent decline in Chinese coal imports and 1 percent lower iron ore imports compared with the same period last year. In addition, we also noticed 1 percent lower fertilizer imports to Brazil, a 13 percent plunge Turkish scrap import in this period. Export data for the first weeks of February suggest activity has remained subdued in many commodities. We believe the recent slump in dry bulk trade is more a result of inventory adjustments and other seasonal factors rather than a serious economic setback. Chinese steel production is expected to increase at a moderate rate this year resulting from subdued activity in domestic demand and slower growth than last year in steel exports. One key factor for dry bulk demand will be China s import requirement for iron ore. Last year s substantial increase in iron ore imports, combined with increased domestic production, raised Chinese iron ore inventories to an all time high at year end. A continued strong increase in iron ore imports will require a significant reduction in domestic iron ore production. With lower production costs in Australia and Brazil, falling production in China and other high cost producer countries seems likely. The downside risk to this scenario will be any Governmental support to domestic miners which might delay the expected reduction in Chinese domestic iron ore output. Another vital element will be China s coal import requirement. Stronger focus on environmental issues will most likely reduce the growth in coal consumption over the coming years at the expense of other energy sources. Utilization of growing hydro power capacity will greatly depend on rainfall. Other key elements for future coal import to China will be the underlying growth in energy demand, how quickly the energy mix changes, and not least Chinese policy related to support of domestic coal mining. The strongest upside potential in coal trade is in higher Indian imports. Expanding steel production and coal burning power plant capacities are expected to generate stronger growth in coal demand than domestic production can satisfy in the shortto medium term. There are also a couple of new coal fired power plants under construction in other Asian countries, driving coal imports. Coal transportation is therefore likely to escalate going forward, but the underlying growth rate is likely to be lower than in previous years. Among other dry bulk commodities, we foresee a moderate recovery in bauxite trade with increasing supplies available in Malaysia and Australia. Fertilizer trade to Brazil should increase further and shipments of agri products are expected to remain stable In forest products, wood pellet transportation is anticipated to escalate further, especially from North America to Europe, but also from Vietnam, China and Canada to South Korea. We also foresee a further increase in woodchip and log transportation to China. Based on the above, we expect a 3 percent increase in global dry bulk transportation this year to be realistic. The slump in earnings has contributed to elevated scrapping over the last few months. Preliminary figures show around 5 mill dwt of dry bulk tonnage sold for recycling so far this year. For the whole year, we estimate in the region of mill dwt will be removed from the fleet. Slippage and/or cancellations of scheduled deliveries are expected to escalate and we assume actual deliveries to be in the region of 5 55 mill dwt. The net fleet increase will on this basis be about.5 percent. Based on the above, the growth in supply and demand is not expected to deviate dramatically this year resulting in relatively small changes in the average fleet utilization compared with last year. The very weak start of this year is most likely influenced by inventory adjustments and other seasonal factors, and it should therefore be realistic to expect a pick up in seaborne dry trade during the course of the year which also should result in some improvements in freight rates and higher volatility. The major downside risk to the above scenario is significantly lower iron ore and coal imports to China resulting from lower economic growth than expected and/or political support to the domestic mining industry reducing the need for overseas supplies. Bjorn Bodding RS Platou Economic Research a.s Shipbroking Oslo

3 RS Platou Monthly February 15 World economy and world shipping While there were no big changes on the macroeconomic scene during February, the data does show a positive development, at the margin. Most importantly, Chinese economic figures have taken on a more robust tone with exports, industrial production and the purchasing managers index all improving and beating expectations. Given the increased pessimism on the Chinese economy over the past year, a break in the recent pattern was very welcome. In addition, both Europe and Japan reported stronger GDP growth in Q, although the levels can by no means be called robust. A rise in leading indicators for Europe and a sharp jump in Japanese industrial production for January indicates that the momentum has carried into the Q1. US data, on the other hand, has been somewhat disappointing. However, analysts estimates for the country s GDP growth in 15 rose for the third straight month, to 3.3%. World economy YoY change in % Forecasts for world GDP, monthly revisions YoY change in % GDP growth US. 3.3 (3.).9 (.) Euro area. 1. (1.1) 1. China Japan India World (1.1) (.) (1.5) World trade Various sources ( ) previous month, if changed World merchant fleet YoY change in % Jan 1 Jul 1 Jan 15 Jul F 1F Tonnage demand Fleet growth Utilization rate Seaborne trade YoY change in % Market indicators YoY change in % Seaborne trade* Dry bulk 3Q/1.9 Q/ m 3.7 Oil Oil. Dec Jan m 3 1 Oil consumption World 1... US... China. n.a n.a 1 Crude imports US China Dry bulk Dec 1 Jan m China imports.5 na na Dry bulk Oil 1 15 Iron ore Steel production China Exchange rate USD/EUR US Container Dec 1 Jan m 1. US imports Commodity prices, end of month Feb 1 Jan 15 Brent oil spot USD/bbl HFO Singapore USD/t. 79. Indian iron ore USD/t Steam coal USD/t Steel HRC B. Sea USD/t Feb * For details on sources and methods, visit Shipbroking Oslo 3 1.

4 RS Platou Monthly February 15 Newbuilding Even though a number of tanker deals have been concluded in February, the newbuilding market has been relatively quiet. Continuous discussions for container, LNG and tanker projects, together with the lack of new bulk carrier orders sums up the newbuilding market so far in 15. Newbuilding prices in mill USD Dec 13 Jan 15 Feb 15 VLCC 9/95 9/97 9/97 Suezmax 5 5 Aframax 51/5 53/5 53/5 MR Clean 35/3 3 3 Capesize Kamsarmax 9/3 9 Ultramax (from Jan 13) 7/ 7 Tank* Bulk* *Tankers from Korean yards, bulk carriers from Chinese yards Order book in no. / mill dwt Rest VLCC Suezmax Aframax Smaller Capesize Post Panamax Pan./Kamsarmax Handy/Supramax Handysize Tank * Bulk * New orders in no. / mill dwt YTD Feb 15 VLCC Suezmax Aframax Smaller Capesize Post Panamax... Pan./Kamsarmax Handy/Supramax Handysize Tank * Bulk * Building prices for tankers Mill USD VLCC Suezmax Aframax MR Clean Building prices for bulk carriers Mill USD Capesize Kamsarmax/Panamax Supramax Exchange rates Left: CNY/USD Right: JPY/USD *For tonnage definitions, visit CNY/USD JPY/USD Shipbroking Oslo

5 RS Platou Monthly February 15 Tankers Freight market The positive trends seen in the freight market in recent months took a slight pause in February, as the onset of Chinese New Year brought about the usual slowdown in activity. Overall levels remained strong and well ahead of last year, however. VLCCs were hit hardest by reduced activity to China and in addition suffered from a drop in Iraq exports due to bad weather and logistical challenges in the MEG. The sharp increase in Russian crude oil exports since the start of the year continued to benefit Suez and Aframax tankers in the Med. Aframaxes also benefited from high activity in the Caribs. The clean market saw marked turnaround in the second half of the months after a relatively slow start. The combination of a severe cold spell on the US East Coast and a refinery strike drove up demand for imports sharply and MRs rates rates in the Atlantic rebounded sharply, finishing near the highs seen in early January. Average freight rates in 1, USD/day Weekly spot rates for crude carriers # 1, USD/day 1 YTD 15 YTD Jan 15 Feb 15 VLCC Suezmax Aframax LR Clean LR1 Clean MR Clean VLCC Suezmax Aframax LR Clean Jan LR1 Clean Jan 3 Jan 13 Feb 7 Feb MR Clean VLCC Suezmax Aframax # World wide averages For weekly freight rates, visit Weekly spot rates for clean carriers # 1, USD/day Spot 1m T/C Tanker fleet development in mill dwt * Deliveries Removals Fleet end YoY 15 YTD 15 YTD Feb 15 in % VLCC Suezmax Aframax Smaller tanker fleet *For tonnage definitions, visit Oil market in mill bpd Demand Supply OECD Non OECD World demand Middle East Africa Latin America North America Western Europe Asia FSU Others World supply World seaborne oil trade 1 Jan 1 Jan 3 Jan 13 Feb 7 Feb 1 1m 15 1m YoY in % E MR Clean LR1 LR Middle East oil production (monthly) Mill bpd 3 1 # World wide averages Shipbroking Oslo 5

6 RS Platou Monthly February 15 Tankers Sale and purchase Tanker values moved sideways despite continued healthy spot earnings in all markets. Although the underlying price trend remains positive, there may be a couple of possible aspects that currently hold back further strengthening in prices; lack of liquidity in the medium term (3 year) TC market, abundant yard capacity, and a very selective behavior towards new players in public money markets. Estimated values in mill USD Feb 1 31, dwt resale 9. 35, dwt 5 years 73. 3, dwt 1 years. 1, dwt resale 5. 1, dwt 5 years 5. 1, dwt 1 years , dwt resale , dwt 5 years , dwt 1 years. C 75, dwt resale. C 75, dwt 5 years 3. C 5, dwt resale 37. C 7, dwt 5 years. C 7, dwt 1 years 1. C 37, dwt 5 years 5. Baltic Sale & Purchase Assessments in mill USD Average Baltic panel assessments 1 Feb VLCC 5 years old 35, dwt 7. Aframax 5 years old 15, dwt 3. MR Prod. 5 years old 51, dwt.5 Demolition prices in USD/ldt Feb 1 Far East 35 Sub continent * 5 * India/Bangladesh/Pakistan Dec 1 Jan 15 Feb Dec Feb Jan 15 Feb 15 5 n.a Still, a public markets backed transactions saw the day of light in February; a couple of acquisition in the MR and LR1 sector, in addition to the widely reported merger of Genmar and Navig s crude fleet. Further consolidating activity should be expected across all tanker segments, as investors with increasing strength demand size/ liquidity to their positions. Second hand values, 5 years old Mill USD VLCC Suezmax Aframax Second hand values for clean carriers, /5, dwt Mill USD years DH 5 years Sold for scrapping and other removals* in no. / mill dwt 1 YTD 15 YTD Feb 15 VLCC double hull Suezmax double hull Aframax double hull Smaller double hull double hull Single hull years second hand values in percent of newbuilding prices * Including total loss/conversion/reclass 5 For tonnage definitions, visit VLCC Suezmax Aframax Shipbroking Oslo

7 RS Platou Monthly February 15 Bulk carriers Freight market The freight market continued to soften through February for all sizes. Subdued spot market activity in iron ore and coal gave limited impetus to tonnage demand for the Panamax and Capesize sectors, while the smaller sizes were negatively affected by moderate activity in minor bulk and grain trades. The recent slump in seaborne trade is probably driven by inventory adjustments and other seasonal factors and it should therefore be realistic to expect somewhat higher activity during the course of the year. Average freight rates in 1, USD/day 1 YTD 15 YTD Capesize 1.3. Panamax Supramax 11.. Handysize Capesize Panamax Supramax Handysize 9.5. Spot 1m T/C Jan Feb Weekly spot rates 1, USD/day For weekly freight rates, visit Jan 1 Jan 3 Jan 13 Feb 7 Feb 1 5 Dry bulk fleet development in mill dwt Deliveries* Removals Fleet end 15 YTD 15 YTD Feb 15 Capesize Post Panamax.. 5. Panamax/Kamsarmax Handymax/Supramax Handysize dry bulk fleet * Including conversions Industrial production, YoY in % USA Euro area Japan China Other Asia Steel production in mill tons USA Japan EU7 China Other Asia world F m 15 1m YoY in % F YoY in % months T/C rates 1, USD/day Capesize Panamax Supramax Handysize World steel production Mill tons/month Capesize Panamax Supramax Handysize world China Rest of the world Shipbroking Oslo 7

8 RS Platou Monthly February 15 Bulk carriers Sale and purchase Whereas the number of reported sales remained low also in February there is definitely more interest, especially from Greek buyers and for the more modern vintages. The values have softened further during the cause of the month, and have in some cases/segments now reached a historical low level not seen since around 3. Estimated values in mill USD Feb 1 1, dwt resale , dwt 5 years 9. 17, dwt 1 years 35., dwt resale 3. 7, dwt 5 years 9. 7, dwt 1 years., dwt resale 3. 5, dwt 5 years 7. 5, dwt 1 years 1.5 3, dwt resale. 3, dwt 5 years 1., dwt 1 years 1. Dec Jan Feb This seem to have triggered a certain number of buyers to position themselves to pick up the most serious sales candidates and we are seeing increased competition. The outlook for the freight market going forward does not offer much comfort for immediate positive cash flow, but the present price levels seem to become interesting for those with pure asset play in mind. Second hand values, 5 years old Mill USD Capesize Panamax Handymax Baltic Sale & Purchase Assessments in mill USD Average Baltic panel assessments 1 Feb Capesize 5 years old 17, dwt 3. Panamax 5 years old 7, dwt 19. Super Handy 5 years old 5, dwt Feb Second hand values, 1 years old Mill USD 15 1 Demolition prices in USD/ldt Feb 1 Far East 315 Sub continent* 35 * India/Bangladesh/Pakistan Dec Jan Feb 15 n.a Sold for scrapping in no. / mill dwt 1 YTD Capesize 5 1. Post Panamax. Panamax/Kamsarmax.1 Handymax/Supramax 11. Handysize YTD Feb Capesize Panamax Handymax 5 years second hand values in percent of newbuilding prices Capesize Panamax Handymax Shipbroking Oslo

9 RS Platou Monthly February 15 Cellular container ships Box rates increased somewhat on major trades over the last month resulting from healthy growth in container movements, both to Europe, US and West Africa. Extra tonnage demand resulting from the recent conflict on the US West coast also had positive impact on freight rates. The conflict seems now to have been sorted out, but it will probably take many weeks to clear the backlog of containers. Charter rates have also been positively influenced by extra tonnage demand to US waters, especially for Panamax sizes. Average charter rates in 1, USD/day 1 YTD 15 YTD 1, TEU.. 1,7 TEU 7. 7.,5 TEU TEU Jan Feb month T/C rates 1, USD/day Container fleet development in mill TEU Deliveries Removals Fleet end YoY 1 15 YTD 15 YTD Feb 15 in % Below 1, TEU.... 1, 1,999 TEU , 3,999 TEU , 5,999 TEU , TEU,5 TEU 1,7 TEU 1, TEU, 7,999 TEU, 9,999 TEU Building prices Mill USD 1,+ TEU container fleet Order book in no. / mill TEU TEU Rest Below 1, 1, 1,999, 3,999, 5,999, 7,999, 9,999 1, , TEU, TEU,5 TEU 1,7 TEU* * Geared New orders in no. / mill TEU 1 15 YTD Feb 15 Below 1, TEU 1, 1,999 TEU, 3,999 TEU, 5,999 TEU, 7,999 TEU, 9,999 TEU 1,+ TEU China Containerized Freight Index (CCFI) USD/TEU China to N. Europe China to S. Europe China to USWC China to USEC Shipbroking Oslo 9

10 RS Platou Monthly February 15 LNG carriers Spot LNG prices in Asia for April delivery ticked up towards the end of the month, but continued to trade below the levels seen in Europe. Due to lack in buyers elsewhere cargoes are being diverted into the European gas market and some cargoes have also been sold to the USA as cold weather increased prices at some hubs. This has forced some market participants to purchase replacement cargoes in Asia to cover commitments and thus pushing up LNG prices in the region. Shipping rates continued to be under pressure. Average charter rates in 1, USD/day 1 YTD 15 YTD 13 15k cbm ST Spot k cbm DFDE T/C 77 9 Jan 15 5 Feb LNG carrier fleet development in no. / mill cbm Deliveries Removals Fleet end YoY 1, cbm 15 YTD 15 YTD Feb 15 in % Freight rates 1, USD/day Spot, 15k steam 1m T/C, 1k DFDE Order book in no. / mill cbm 1, cbm Rest New orders in no. / mill cbm 1, cbm 1 15 YTD Feb LNG imports in mill mt Japan Korea China 1 1m m..1.1 YoY in % Building prices for LNG carriers Mill USD k cbm 173k cbm Natural gas prices USD/mmbtu Henry Hub NBP LNG spot Asia Shipbroking Oslo 1

11 RS Platou Monthly February 15 Representative reported newbuilding contracts Tank Capacity Shipyard Owner Reported price/unit Delivery x 7, dwt S T X Shipbuilding Oman Shipping Co 17 1 x 7, dwt S T X Shipbuilding Valles Steamship mill USD 1 x 15, dwt Hyundai H.I. Sun Enterprises 5/ mill USD 1 3 x 15, dwt Sungdong Shipbuilding Kyklades 17 1 x 3, dwt Japan Marine United Meiji Shipping Group 97 mill USD 17 x 3, dwt Dalian Shipyard (Facility ) C S D C 93.9 mill USD 17 / 1 x 3, dwt Hyundai H.I. Metrostar 9/97 mill USD 1 Bulk Capacity Shipyard Owner Reported price/unit Delivery x 9, dwt Sanoyas Unknown 17 3 x, dwt Imabari Saijo Mitsui O.S.K. 1 Container Capacity Shipyard Owner Reported price/unit Delivery x 1, teu Dae Sun Shipbuilding Cosmoship 7 mill USD 17 x,7 teu Jiangsu New Yangzijiang Lomar 17 / 1 LNG Capacity Shipyard Owner Reported price/unit Delivery 1 x 17, liq Daewoo Shipbuilding Teekay 1 1 x 1, liq Daewoo Shipbuilding Mitsui O.S.K. 1 LPG Capacity Shipyard Owner Reported price/unit Delivery x 7, liq Jiangsu New Yangzijiang Evergas 7.5 mill USD 17 Shipbroking Oslo 11

12 RS Platou Monthly February 15 Representative second hand sales Tank Name Capacity Built Price Buyers Comments Gc Haikou 99 dwt /Japan 31 mill USD Greece Sark 113 dwt 9/China mill USD Malaysia Chemical/Product Name Capacity Built Price Buyers Comments Arctic Char 75 dwt 1/Croatia " " Karei 75 dwt 1/Korea " mill USD " Maguro 7 dwt 1/Korea " mill USD " Kihada 75 dwt 1/Korea Region 15 mill USD Denmark Enbloc Champion Spirit dwt 1991/Spain Undisclosed Nigeria Midnight Sun 5 dwt 1997/Japan Low mill USD Far East Mauranger 1 dwt 1995/ " mill USD " Moldanger 1 dwt 1997/Japan 1.5 mill USD Indonesia Enbloc Hf Pioneer dwt 1/Japan 5.5 mill USD Korea Fs Philippine 19 dwt 5/Portugal Excess 1 mill USD Undisclosed Ocean Moray 1 dwt 199/Japan.5 mill USD China Bulk Name Capacity Built Price Buyers Comments A Max dwt 11/Korea 1.55 mill USD Greece Flora Island 1 dwt 1/Korea 1. mill USD Greece Thalia 75 dwt 1/Japan 9.7 mill USD Greece Copper Queen 7 dwt 1/Japan 7.3 mill USD Greece Valopoula 5 dwt /Phillippine. mill USD Greece Sea Grace 3 dwt 1991/Japan Undisclosed Undisclosed Ken Koku dwt 199/Japan mill USD Undisclosed Container Name Capacity Built Price Buyers Comments Charles Dickens 99 TEU 5/Korea 1 mill USD Germany Cma Cgm Auckland 9 TEU /Germany Undisclosed Greece Convent 1 TEU /Germany " " " Clipper 1 7 TEU /Germany 1 " Greece Enbloc Jessica B TEU /Germany mill USD Turkey Shipbroking Oslo 1

13 RS Platou Monthly February 15 Contact list Oslo RS Platou ASA RS Platou Shipbrokers Haakon VII's gate 1 Sale and Purchase snp@platou.com N 119 Oslo Newbuilding new@platou.com Norway Tank tankers.oslo@platou.com Tel: Dry Cargo dry@platou.com Fax: Car car@platou.com office@platou.com Economic Research ecr@platou.com RS Platou Offshore RS Platou Markets AS RS Platou Project Finance AS Tel: Tel: Tel: Fax: Fax: Fax: off@platou.com office@platoumarkets.com finans@platou.com Geneva Houston Moscow RS Platou Geneve SA RS Platou Houston, Inc. RS Platou ASA, Moscow 19, Rue de la Corraterie 11 McKinney St. Bronnaya Plaza, Bldg. 1, Floor 7 CH 1 Geneva Suite 375 3, Sadova Kudrinskaya St. Switzerland Houston, Texas 771 Moscow 131, Russia Tel: USA Tel: Fax: Tel: Fax: dry@platou.ch Fax: moscow@platou.com tankers.houston@platou.com Piraeus Shanghai Singapore RS Platou Hellas Ltd. RS Platou ASA Shanghai Repr. Office RS Platou (Asia) Pte. Ltd. 1 3 Filellinon Str. Lippo Plaza, Unit Temasek Avenue 15 3 Piraeus Huai Hai Zhong Road # 1 Centennial Tower Greece Shanghai 1, China Singapore 3919 Tel: Tel: Tel: Fax: Fax: Fax: snp@platou.gr pshang@platou.com snp@platou.com.sg dry@platou.gr new.shanghai@platou.com dry@platou.com.sg snp.shanghai@platou.com offshore@platou.com.sg While care has been taken to ensure the information in this report is accurate, it is a general guide and not intended to be relied upon for any specific purpose. RS Platou ASA, its affiliates, directors and employees are not responsible or liable for any losses or consequences, whatsoever, arising from any errors, lack of correctness, inaccuracy or incompleteness of the information contained herein. Reproducing any materials from this report without prior approval from RS Platou ASA is strictly forbidden. All matters relating to this report shall be governed by the laws of Norway, and any dispute arising in respect of this presentation is subject to the exclusive jurisdiction of Norwegian courts with Oslo as legal venue. Shipbroking Oslo 13