Thursday, 21 May 215 Mövenpick Hotel WORLDWIDE ECONOMIC & SHIPPING OUTLOOK 1Q 215 Presented By: Maria Bertzeletou, Senior Shipping Analyst 1
SECTION 1 SECTION 2 Macroeconomics Review-Projections Shipping Market Review - Projections Global Economy Advanced / Emerging Global Trade Dry / Wet / Container Freight Market Fleet Growth Investment Trends Threats & Opportunities 2
SECTION 1 MACRO ECONOMICS 3
An Uneven Global Recovery continues Advanced Emerging Firmer Growth from 213 US emerging the strongest Euro delayed recovery Low inflation ratio Weaker Growth from 213 for the first time since 1999 IND emerging the strongest China loosing its supremacy GDP Growth 215 US 3.1% - Euro 1.3% GDP Growth 215 India 7.5% - China 6.8% US appreciation Euro depreciation Recession in Japan Negative growth: Brazil /Russia 4
Global Economy: GDP Growth Rates Slower Recovery World Output - GDP Growth % 21-215 Annual Growth Rate 3.7% 215-216 3.7 5.2 5.3 2.7 5.2 3.9 3.2 3 3.4 3.5 3.8 +.7% from 213 1996-25 26 27 -.4 28 29 21 211 212 213 214 215 216 UPSIDE RISKS LOWER OIL PRICE DOWNSIDE RISKS LOWER INVESTMENT STAGNATION IN EURO JAPAN GEOPOLITICAL RISKS Statistics Figures based on IMF APR. 215 5
2.8 1996-25 Advanced Economies: Stronger GDP Growth 3 26 2.7.1 27 28 GDP Growth % 29-3.4 3 21 1.7 1.4 1.3 211 212 213 1.8 2.4 2.4 214 215 219 Annual Growth Rate 2.4% 215-216 +1.1% from 213 5.2 Emerging Economies: GDP Growth % 8.2 8.7 7.5 5.9 3.1 6.3 5 4.7 4.6 4.3 4.7 Weaker GDP Growth Annual Growth Rate 4.5% 215-216 -.2% from 213 1996-25 26 27 28 29 21 211 212 Statistics Figures based on IMF APR. 215 213 214 215 219 6
World Trade Modest recovery after 3yrs of Slowdown Growth % Annual Growth Rate 3.7% 215-216 5.4 2.2 2.4 2.8 3.3 4 +1.3% from 213 211 212 213 214 215E 216E DOWNSIDE RISKS Imports of Emerging < Advanced Weaker Growth of Asia Shipping Demand in Threat Emerging Merchandise Imports- Growth % Annual Growth Rate 5.1% 215-216 6.5 3.6 4.8 3.6 5.1 5.1 +.3% from 213 211 212 Asia 213 214 215E 216E UPSIDE RISKS Exports of Emerging > Advanced Statistics Figures based on WTO APR. 215 7
SECTION 2 SHIPPING MARKET 8
FREIGHT MARKET OVERVIEW Dry-Negative Trend : BDI at the lowest since 1986 (fleet growth 89% from 2 - >1, vessels) Wet- Positive Trend: Upside performance of VLCC is closely related to the sharp drop in brent (fleet growth 76% from 2 ->5,9 vessels) EIA estimates brent crude average price $59/barrel in 215 and $75/barrel in 216 Container: SCFI<1 Asia /Europe recession-lowest levels since 29 (fleet growth 92% from 2 ->5, vessels) 9
Baltic Exchange Indices Modern Tonnage (DRY / WET) 1 year TC -$/day Dry - Indices % y-o-y Dry /Wet- Large Size Categories % y-o-y % -1% -2% -3% -4% -5% -6% -7% -8% BDI BCI BPI BSI BHSI -45% -34% -31% -45% -71% 8% 5% 2% -1% -4% -7% -1% Capesize Panamax VLCC Suezmax -53% -35% 6% 43% Wet- Indices % y-o-y Dry /Wet- Small Size Categories % y-o-y 15% 1% 5% % 1% BDTI 13% BCTI 4% 3% 2% 1% % -1% -2% -3% 31% Handymax Handy Aframax MR -28% -14% -1% 1
1 year TC -$/day Modern Tonnage (DRY / WET) Dry - Large Size Categories Dry - Small Size Categories 25, 21,7 12, 11,4 8,8 2, 1, 12, 15, 215 8, 8,2 7,6 214 6, 1, 1,3 7,8 4, 5, 2, Capesize-17, dwt Panamax-75, dwt Handymax-52, dwt Handy-34, dwt 215 214 Wet - Large Size Categories Wet - Small Size Categories 5, 4, 3, 2, 45, 28,1 33, 23, 215 214 25, 2, 15, 1, 23, 17,5 15,2 15,4 215 214 1, 5, VLCC-31, dwt Suezmax-15, dwt Aframax-11, dwt MR-47, dwt 11
1 year TC -$/day Modern Tonnage (CONTAINERS) Firm growth against the fall in spot rates Container - Large Size Categories Container - Small Size Categories 15, 1, 5, 15, 1,25 8,8 7,7 215 214 1, 8, 6, 4, 2, 9,25 8, 7,4 7, 215 214 4,4 TEU 3,5 TEU 2,75 TEU 1,7 TEU Container- Large Size Categories % y-o-y Container- Small Size Categories % y-o-y 8% 6% 4% 2% % 7% 33% 4,4 TEU 3,5 TEU 25% 2% 15% 1% 5% % 25% 14% 2,75 TEU 1,7 TEU 12
GROWTH OF SHIPPING INVESTMENTS AFTER 29 ASSET PRICES / INVESTMENT TRENDS 13
SECONDHAND/NEWBUILDING MARKET (INVESTMENTS) 14
SECONDHAND MARKET (BULKERS/TANKERS) BULKER INVESTMENTS 212-215 DECREASING TREND TO VESSEL DWT BULKER INVESTMENTS 212-215 DECREASING TREND TO VESSEL AGE 1-15 YRS 8, 6, 74,69 67,332 81,111 57,511 6 5 4 215 214 1 13 4, 2, 38 48 457 14 212 213 214 215 Count of Vessel Purchases Average of Vessel DWT 3 2 1 213 212 Average of Vessel Age 12 14 8, 6, TANKER INVESTMENTS 212-215 INCREASING TREND TO VESSEL DWT 52,552 67,318 91,45 8,31 5 4 3 215 214 TANKER INVESTMENTS 212-215 DECREASING TREND TO VESSEL AGE 5-1 YRS 9 9 4, 2 213 1 2, 212 213 214 215 Count of Vessel Purchases Average of Vessel DWT 1 212 Average of Vessel Age 11 15
Asset Prices Trends BULKER SEGMENT (HANDY / HANDYMAX) 1,-29,999 DWT Handy Vessel Age Shiftting trend >15yrs Asset Price Sharp Decreasing Trend 3,-39,999 DWT Handysize Vessel Age Shiftting trend 6-1yrs Asset Price Sharp Decreasing Trend 4,-49,999 DWT Handymax Vessel Age Flat 15-2yrs Asset Price Sharp Decreasing Trend 16
Asset Prices Trends BULKER SEGMENT (SUPRA/PANAMX/CAPE) 5,-59,999 DWT Supramax Vessel Age 6-1 yrs Asset Price Sharp Decreasing Trend 6,-79,999 DWT Panamax Vessel Age 1-15 yrs Asset Price Sharp Decreasing Trend Capesize Vessel Age 1-15 yrs Asset Price Sharp Decreasing Trend 17
Asset Prices Trends TANKER SEGMENT (SMALL/HANDY/MR) Small Vessel Age Shiftting trend < 1yrs Asset Price Increasing trend ST ST Handy Vessel Age Increasing trend > 1yrs Asset Price Sharp Declining Trend MR Vessel Age Declining trend < 1yrs Asset Price Soft Increasing Trend 18
Asset Prices Trends TANKER SEGMENT (CRUDE SIZES) Aframax Vessel Age Declining trend < 1yrs Asset Price Sharp Increasing Trend Suezmax Vessel Age Declining trend < 1yrs Asset Price Sharp Increasing Trend VLCC Vessel Age Declining trend < 15yrs Asset Price Sharp Increasing Trend 19
NEWBUILDING MARKET (BULKERS/TANKER) 1, 8, 6, 4, 2, BULKER NB INVESTMENTS 212-215 DECREASING TREND TO VESSEL DWT: SUPRAMAX 72,462 92,827 86,79 54,493 212 213 214 215 BULKER ORDERING PER VESSEL SIZE Ultramax Handysize Capesize Kamsarmax Supramax Handymax Panamax Handy (1,-29,999) 5% 2% 2% 2% 16% 16% 21% 3% % 5% 1% 15% 2% 25% 3% 35% 14, 12, 1, 8, 6, 4, 2, TANKER NB INVESTMENTS 212-215 INCREASING TREND TO VESSEL DWT: CRUDE 9,155 89,92 96,798 127,745 212 213 214 215 TANKER ORDERING PER VESSEL SIZE MR-Handymax 39% Handysize 16% Aframax 14% VLCC 13% SMALL 8% SUEZMAX 7% Panamax 3% % 1% 2% 3% 4% 5% 2
BULKER SEGMENT (HANDY /MEDIUM SIZES) Handysize Country Built China- Major share Asset Price Flat-Upward trend Supramax Country Built Japan- Major share Asset Price Flat trend Ultramax Country Built China- Major share Asset Price Downward trend 21
BULKER SEGMENT (LARGE SIZES) Panamax Country Built Japan- Major share Asset Price Flat- trend Kamsarmax Country Built China- Major share Asset Price Flat-Upward trend Capesize Country Built China- Major share Asset Price Increasing trend 22
TANKER SEGMENT (HANDY /MEDIUM SIZES) MR Country Built SKR Major share Asset Price Upward trend Handysize Country Built Japan Major share Asset Price Upward trend Small Country Built China Major share Asset Price Upward trend 23
TANKER SEGMENT (LARGE SIZES) VLCC Country Built China- Major share Asset Price Increasing trend Suemax Country Built SKR- Major share Asset Price Flat - Downward trend Aframax Country Built China Major share Asset Price Flat - Upward trend 24
FLEET GROWTH - ORDERBOOK 25
Declining Fleet Growth But Excessive Fleet 12, 1, 8, 6, 4, 2, BULKERS 12% 1,315 4% 3,861 2,82 1 2 3 4 5 6 7 8 9 1 11 12 13 14 15E 14% 12% 1% 8% 6% 4% 2% % -2% 7, 6, 5, 4, 3, 2, 1, TANKERS 5917 4% 1% 1,92 841 1 2 3 4 5 6 7 8 9 1 11 12 13 14 15E 1% 8% 6% 4% 2% % -2% Orderbook Current Fleet Fleet Growth Orderbook Current Fleet Fleet Growth Baltic Dry Index (2-215 ) Baltic Dirty / Clean Index (2-215 ) 8, 7, 6, 5, 4, 3, 2, 1, 1 2 3 4 5 6 7 8 9 1 11 12 13 14 15 2, 1,8 1,6 1,4 1,2 1, 8 6 4 2 Baltic Exchange Dirty Tanker Index Baltic Exchange Clean Tanker Index 1 2 3 4 5 6 7 8 9 1 11 12 13 14 15 26
Orderbook Growth (2-215) BULKERS Declining Trend TANKERS Upward Trend 4,4 4, 3,6 3,2 2,8 2,4 2, 1,6 1,2 8 4 2,9 2,156 1,829 2,82 1 2 3 4 5 6 7 8 9 1 11 12 13 14 15 2,4 2,2 2, 1,8 1,6 1,4 1,2 1, 8 6 4 2 1,39 2,76 1,92 1,779 1,441 1,143 775 841 1 2 3 4 5 6 7 8 9 1 11 12 13 14 15E 15.% % Growth (2-215 ) 6.% % Growth (2-215 ) 1.% 4.% 5.% 2.%.% -5.% 1 2 3 4 5 6 7 8 9 1 11 12 13 14 15.% -2.% 1 2 3 4 5 6 7 8 9 1 11 12 13 14 15E 6 5 4 3 2 1 Demolitions (2-215) 591 398 431 125 199 277 311 144 15 18 14 23 48 18 15 182 1 2 3 4 5 6 7 8 9 1 11 12 13 14 15-4.% Demolitions (2-215) 3 25 2 213 15 1 148 152 195 127 133 12 121 138 11 5 71 73 84 74 95 22 1 2 3 4 5 6 7 8 9 1 11 12 13 14 15 27
EXISTING FLEET -BULKERS (ORDERBOOK) VLOC 218 VLOC 61 Cape 12,-29,999 1294 Cape 12,-29,999 268 Kamsmx-Mini Cape 1176 Kamsmx-Mini Cape 358 Ultramax-Panamax 6,- 171 Ultramax-Panamax 6,- 68 Supramax 5,-59,999 28 Supramax 5,-59,999 17 Handymax 4,-49,999 868 Handymax 4,-49,999 73 Handysize 2,-39,999 266 Handysize 2,-39,999 465 Handy 1,-19,999 514 Handy 1,-19,999 23 1 2 3 15 3 45 6 75 9 LARGE SIZES : 85% of Cape fleet is -15 yrs old scrapping potentials in the age of 16-24 yrs 6% of fleet 7% of Ultra/Panamax fleet is -15 yrs old scrapping potentials in the age of 21-34 yrs 11% of fleet 4% of Handymax fleet is -15 yrs old scrapping potentials in the age of 21-34 yrs 25% of fleet HANDY SIZES: 2,-35, Dwt : 68% of fleet is -15 yrs old scrapping potentials in the age of 21-34 yrs 14% of fleet 1,-19,999 Dwt: 6% of fleet is -15 yrs old scrapping potentials in the age of 21-34 yrs 28% of fleet DELY SCHEDULE VLOC 19 Cape 12,-29,999 125 Kamsmx-Mini Cape 176 Ultramax-Panamax 6,- 362 Supramax 5,-59,999 72 Handymax 4,-49,999 51 Handysize 2,-39,999 256 Handy 1,-19,999 21 5 1 15 2 25 3 35 4 218 217 216 215 28
EXISTING FLEET -TANKERS (ORDERBOOK) Small<1,dwt Handysize Panamax Aframax Suezmax VLCC 1792 354 48 98 498 636 1 2 3 4 Small<1,d 67 Handysize 528 Panamax 44 Aframax 138 Suezmax 86 VLCC 17 15 3 45 6 75 9 CRUDE : 91% of VLCC fleet is -15 yrs old scrapping potentials in the age of 16-2 yrs 7% of fleet 86% of Suezmax fleet is -15 yrs old scrapping potentials in the age of 16-2 yrs 1% of fleet 86% of Aframax fleet is -15 yrs old scrapping potentials in the age of 16-2 yrs 8% of fleet PRODUCT: 96% of Panamax fleet is -15 yrs old scrapping potentials in the age of 16-2 yrs 2% of fleet 1,-59,999 Dwt Handy /MR: 9% of fleet is -15 yrs old scrapping potentials in the age of 16-2 yrs 8% of fleet 21-34 yrs 5% of fleet 66% of Small fleet is -15 yrs old scrapping potentials in the age of 2-34 yrs 2% of fleet Small<1,dwt Handysize Panamax Aframax Suezmax VLCC DELY SCHEDULE 61 243 5 51 12 28 5 1 15 2 25 217 216 215 29
CONCLUSION : OVERCAPACITY PREVAILS 215-22 : WILL BE CHALLENGING PERIOD 3
VESSEL TYPE SIZE-AGE : KEY ELEMENTS VESSEL TYPE : PREFERENCE ON VESSELS WITH THE LEAST RISK OF FLEET GROWTH AND THE UPSIDE RISK OF FIRM DEMAND GROWTH VESSEL SIZE: PREFERENCE ON VESSELS FEXIBLE FOR VESSEL EMPLOYMENT AND MORE SPECIALIZED SIZES (SMALL BULKERS CHEMICAL TANKERS) BULKERS: AVG DWT 52, TANKERS: AVG DWT 8, SOLD THIS YEAR SOLD THIS YEAR VESSEL AGE: MODERN TONNAGE UP TO 1 YRS OLD AVERAGE AGE OF VESSEL SOLD FOR THIS YEAR IS ABOUT 13 YRS SECONDHND OR NEWBUILDING? PREFER GROWTH SECONDHAND: TO LOWER THE THREAT OF FLEET GROWTH AND CONTRIBUTE IN FIRMER BE MORE SCEPTICAL NEWBUILDING: SELECT VESSEL SIZES THAT HAVE AMPLE UNITS OF SCRAP CANDIDATES DEMOLITION ACTIVITY: WILLING TO SCRAP VINTAGE TONNAGE BETWEEN 15-2YRS OLD TO ALLEVIATE OVERSUPPLY IN DRY & WET 31
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