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Shipbrokers. Presentation to INTERTANKO’S CHEMICAL TANKER SEMINAR April 8, 2008 Panama City, RP Soren Wolmar Quincannon Associates, Inc. The Chemical Tanker Market. Development Trends which will influence the market Outlook. Developments Leading to Present Market.

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Shipbrokers

Shipbrokers

Presentation to

INTERTANKO’S CHEMICAL TANKER SEMINAR

April 8, 2008

Panama City, RP

Soren Wolmar

Quincannon Associates, Inc.


The chemical tanker market
The Chemical Tanker Market

  • Development

  • Trends which will influence the market

  • Outlook


Developments leading to present market
Developments Leading to Present Market

  • Increase in cargo volumes, in particular to China

  • New Regulations: IMO/Marpol, upgrading cargoes

  • Phasing out single hull vessels

  • Charterers’ vetting systems

  • High CPP markets


Developments leading to present market1
Developments Leading to Present Market

  • Consolidation of Owners/Charterers

  • Anti-trust issues

  • Undersupply of tonnage in late 1980’s/early 1990’s

  • Major Owners’ newbuilding programs at or below replacement in 2000’s

  • Longest lasting high market


Top 12 products by volume 2006 upgraded in 2007 by new imo rules
TOP 12 PRODUCTS BY VOLUME 2006Upgraded in 2007 by New IMO Rules

Palmoil 29.0 Million Tons, upgraded to IMO 2

Methanol 15.0 Million Tons, upgraded to IMO 3

Soybeanoil 10.0 Million Tons, upgraded to IMO 2

Caustic(liq) 8.7 Million Tons, unchanged (IMO 3)

Sulfuric Acid 8.2 Million Tons, unchanged (IMO 3)

Molasses 7.3 Million Tons, unchanged (none)

MEG 5.8 Million Tons, upgraded to IMO 3

MTBE 5.3 Million Tons, upgraded to IMO 3

Xylene 5.1 Million Tons, upgraded to IMO 2

Phosphoric Acid 4.1 Million Tons, unchanged (IMO 3)

Ethanol 3.5 Million Tons, unchanged (none)

UAN 3.1 Million Tons,upgraded to IMO 3


Future trend on tonnage
Future Trend on Tonnage

  • The chemical tanker fleet is growing

  • Fleet composition is changing:

    Smaller vessels, simple/sophisticated

    Larger vessels mostly simple

    General: less tanks/segregations

  • Large owners’ fleet remain constant

  • Mid size owners growing, new trade routes

    With 30 vsl + 1998: 4, 2008: 9

  • New owners entering market


Supply of tonnage
Supply of Tonnage

QA Fleet Review of the approximately 30 owners serving the U.S. market

is published each year. The number of owners serving this market varies

slightly from year to year.

Year Existing vsls/dwt of which +20 new buildings

2001 554/12.0 mill 78/2.0 mill 36/1.0 mill

2002 567/12.3 mill 112/2.6 mill 65/2.0 mill

2003 597/13.5 mill 125/3.1 mill 104/3.1 mill

2004 628/15.0 mill 111/2.8 mill 90/2.3 mill

  • 680/16.4 mill 111/2.9 mill 128/3.1 mill

    2006 680/16.1 mill 125/3.5 mill 154/4.2 mill

    2007 699/16.9 mill 114/3.1 mill 173/5.0 mill


Supply of tonnage1
Supply of Tonnage

Chemical tankers between 1,000 dwt and 50,000 dwt with IMO

classification:

EXISTING +20 YEARS NEW BUILDINGS

Year Vsls/Dwt Vsls/Dwt Vsls/Dwt

2004: 2169/33 mill 625/6.8 mill 320/7.8 mill

2005: 2295/36 mill 663/7.1 mill 475/10.1 mill

2006: 2487/41 mill 738/8.3 mill 523/10.1 mill

2007: 2677/45 mill* 726/8.7 mill 755/16.1 mill


Future trend on tonnage1
Future Trend on Tonnage

  • Modifying factors:

    Availability of finance/credit crunch

    Delay in delivery of new buildings

    Cancellation of new buildings


Change in Fleet CompositionChemical Tankers and Tankers for Oil/Chemicals(approximate figures for 2007)

Vessel size (dwt) Existing Fleet 20 Years+ New Buildings

1,000 - 5,000 727 304 64*

5,000 - 10,000 617 219 122

10,000 - 20,000 514 89 313

20,000 - 30,000 134 55 25

30,000 - 40,000 340 60 95

40,000 - 50,000 345 35 136

TOTAL 2,677 762 755

*Does not include large number of small vessels being built in China

for domestic trade


Future trends on cargo
Future Trends on Cargo

  • 2007: about 150 mill chemicals/vegoils shipped

  • Vegoil growing by 7.5% to 10% pa

  • Chemicals growing by 6% pa


Future trends on cargo1
Future Trends on Cargo

  • Ton/miles:

  • China, SE Asia and AG will replace U.S. and European production

  • Chemical ton/miles will be reduced

  • Bio Diesel, Ethanol and vegoils will increase ton/miles

  • More emphasize on regional trade, less on deep sea

  • Recession, less volume, change in direction


Other factors impacting market
Other Factors Impacting Market

  • Chemical tanker/clean tanker market interaction

  • Future restriction on last cargoes

  • Political turmoil

  • Weather related production interruption

  • Port congestion



Outlook
Outlook

  • More vessels/capacity

  • More owners competing

  • Declining or steady ton/miles

  • Turning point in the market

  • The end of the longest lasting high market

  • Open questions:

  • Recession, declining cargo volumes

  • New building prices/steel prices

  • Chinese shipbuilding policy in low market


Shipbrokers1

Shipbrokers

Thank you


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