The Future LPG Shipping Market

Transcription

1 The International LP Gas Conference Tokyo 2016 The Future LPG Shipping Market LPG Shipping Market and Freight Rates

2 My mandate 2

3 The Future LPG Shipping Market 3

4 How to get to know the LPG market 4

5 One should be careful predicting the future 5

6 Outlook for 2006 /

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8 June 1967 The «Six Day War» resulted in a closure of the Suez canal for more than 8 years. Costly for the cargo owners! A bonanza for ship owners! 8

9 September 2008 How many foresaw the US Bank Collapse? 9

10 Shale Oil and Gas What export volumes did we expect in 2008? What export volumes did we expect in 2010? What export volumes did we see in 2015? 10

11 Learn from history! 11

12 The First Shipping Nation The Phoenician civilization flourished from about 2500 B.C. to 1200 B.C. - The Bronze age. They didn t invent BRONZE but they took complete control of copper and pewter The Phoenicians turned to the sea and became the Worlds greatest traders, shipbuilders, navigators, and colonizers. 12

13 The First Shipping Boom Copper and pewter were know. But both metals are soft and is not fit for tools and weapons. By alloying copper and pewter (and some lead) you got BRONZE About 85 % pewter 10 % copper 5 % led To get control over copper and pewter the Phoenicians colonized and established mines at Cyprus, in Spain and even Brittan. They built a massive fleet of gaulois, or round ships, and took complete control of the exploration and more important, trade of bronze. They built up a shipping and trading empire and ruled Europe for almost 1000 years. 13

14 The First Shipping Crisis Iron is one of the most frequent metals in the world. Among the oldest discovered item of iron was found in an Egyptian tomb, years old. Iron came in to common use about 1200 B.C. The demand for bronze disappeared almost overnight. The Phoenician fleet serving the bronze trade went into lay-up 14

15 Shipping Outlook? To forecast freight rates you need to forecast the shipping routes, hence you need to know where the vessels will sail; -also in the future!

16 What happened on Crude could happen in Gas 16

17 What happened in India? In March 2008 Reliance gave a presentation here at the Tokyo LP Gas Conference In 2008 India imported 3,439,000 tons of LPG. They advised that India would become a net exporter of LPG within Not that there were no demand, but there would not be possible to build infrastructure to support a consumption increase equal to the additional volumes of LPG from the rapid increasing Indian refinery sector In 2012 India imported 6,593,000 tons of LPG 17

18 Where will the additional LPG go? Kg/Cap/Yr Ecuador 70 Mexico 0 Japan 70 Egypt 55 Chile 55 Morocco 53 USA 50 Malaysia 45 Argentina 30 Brazil 25 Thailand 25 Peru 20 Indonesia 10 Colombia 7,5 India 7 China 6 Vietnam 5 Philipines 4,5 Kenya 3 Tanzania 2 Mozambique 2 Pakistan 1 Population A 20 % increase in Brazil represent 24 additional VLGC cargos A 20% increase in China represent 38 additional VLGC cargoes Domestic consumption per capita, not including industrial and auto

19 WORLD MAP OF THE HUMAN DEVELOPMENT INDEX DARK GREEN FOR MOST HIGHLY DEVELOPED HUMAN BEINGS; DARK RED FOR LEAST DEVELOPED) Lorentzen & Stemoco

20 What will 2016 Look Like Lorentzen & Stemoco

21 What will 2016 bring? 1. Crude oil ends 2016 below $30 per barrel. 2. U.S. natural gas production declines. 3. Several approved U.S. liquefied natural gas (LNG) export projects are postponed or abandoned. 4. Bipartisan support for climate change measures emerges in the U.S. Congress. 5. World oil production declines. By Kurt Cobb Posted on Mon, 28 December : GM 21

22 So, What Do We Do Now? 22

23 Trust your gut! The best thing in business is to follow your gut. If the decision is not sitting well with you, don t just make it. If it does, - do it! 23

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25 What will the future bring? Confidence comes not from always being right, but from not fearing to be wrong

26 Lorentzen & Stemoco AS Established 1919 and still kicking! A leading provider of ship broking, consulting, and financial services to the shipping and offshore industry Service on a 24 hour basis Offices in Oslo London Geneva Athens Singapore Shanghai Hong Kong New York

27 LORENTZEN & STEMOCO AS March 16 Lorentzen & Stemoco 27

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