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Tanker Markets Overview. 31 May 2010, Jeddah Peter M Swift, MD, INTERTANKO. INTERTANKO Today. 260 + members operating ca. 3,100 ships > 75% of the independent oil tanker fleet and > 85% of the chemical carrier fleet 300 + associate members: in oil and chemical tanker related businesses

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tanker markets overview

Tanker MarketsOverview

31 May 2010, Jeddah

Peter M Swift,

MD, INTERTANKO

intertanko today

INTERTANKO Today

260 + members operating ca. 3,100 ships

> 75% of the independent oil tanker fleet and > 85% of the chemical carrier fleet

300 + associate members:

in oil and chemical tanker related businesses

15 Committees – 5 Regional Panels

Principal Offices – London and Oslo

Representative Offices in US, Asia and Brussels

Observer Status at IMO, IOPC, OECD and UNCTAD

International Association of Independent Tanker Owners

slide3

Global dependence on oil tanker transportation

World Oil Consumption 3.8 billion ts

Transported by sea 2.4 billion ts

> 60% transported by sea

tanker shipping today an industry to be proud of
Tanker shipping today- an industry to be proud of
  • Safe
  • Environmentally responsible
  • Energy efficient
  • Cost effective
accidental oil pollution from tankers
Accidental oil pollution from tankers

1000 ts spilt

1000 bn tonne miles trade

Based on ITOPF/Fearnleys

tanker shipping s green credentials
Tanker Shipping’s GREEN Credentials
  • This car, weighing one tonne, uses 1 litre of fuel to move 20 kms
  • This oil tanker uses 1 litre of fuel to move one tonne of cargo 2,500 kms
    • more than twice as far as 20 years ago
oil price and freight rates 1970 2010 real and nominal
Oil price and freight rates 1970-2010– real and nominal

USD per barrel

Source: OPEC/US pub. stats

investment in new tonnage move to double hulls
Investment in New Tonnage- Move to Double Hulls
  • More than USD 500 billion invested since 2000 with the result that ~95% of tanker fleet* double hulled by end 2010

* over 10,000 dwt

key challenges for tanker and other ship owners today
Key Challenges for Tanker and other Ship Owners Today
  • Establishing and maintaining an international framework of consistent regulations and standards
  • Delivering best environmental performance
  • Ensuring availability of good people (and quality ships)
  • Ensuring the welfare and well-being of ships’ crews
  • Meeting the challenges of Piracy
key environmental challenges
Key Environmental Challenges
  • Air emissions

- Green House Gases

- Exhaust Gas emissions (Annex VI & its revisions)

- VOC emissions

  • Spill Prevention and Response Planning
  • Ballast Water management
  • Biofouling
  • Antifouling systems
  • Ship Recycling
  • Port Reception Facilities (adequacy & affordability)
  • Waste management (onboard and ashore)
  • Radiated Noise pollution
  • Cetacean strikes
tanker markets today
Tanker Markets Today ?
  • Demand down, but recovering ?
  • Supply up, and still growing ?
  • Rates down, and ?
tanker markets today13
Tanker Markets Today
  • Demand : World oil trade
  • Supply : Ships on Order & Fleet development
  • Tanker market
  • Shipbuilding capacity
world oil demand vs gdp
World Oil Demand vs. GDP

6

5

4

3

2

% change (year on year)

1

IMF GDP

Oil Demand

0

-1

-2

-3

-4

1991

1992

1993

1994

1995

1997

1998

1999

2001

2003

2004

1990

1996

2000

2002

2005

2010

1989

2009

1981

1983

1984

1985

1986

1987

2006

2007

2008

1982

1988

Source: Clarksons (September 2009)

demand uncertainties
Demand uncertainties
  • Global or regional economic stagnation
  • New pipelines
  • Natural and other disasters
  • Climate Change legislation
  • Oil price
  • Inventory levels

Eastern Siberian

Pacific Ocean Pipeline

orderbook development all ship types
Orderbook Development (All ship types)

Orderbook – All ships (>999GT)

Source: Clarksons, April 2010

orderbook by ship type as existing fleet
Orderbook by ship type(as % existing fleet)

Source: Clarksons (September 2009)

tanker contracting 1996 2010
Tanker Contracting 1996-2010

90

80

Handy

70

MR

60

50

Panamax

million deadweight

40

Aframax

30

Suezmax

20

10

VLCC

0

2007

2008

2009

2001

2002

2003

2004

2005

2006

2010

1996

1997

1998

1999

2000

Source: Clarksons, April 2010

newbuilding tanker prices
Newbuilding Tanker Prices

VLCC

Suezmax

Aframax

Panamax

MR Product

180

150

120

$ million

90

60

30

0

Jan-86

Jan-88

Jan-90

Jan-92

Jan-94

Jan-96

Jan-98

Jan-00

Jan-02

Jan-04

Jan-10

Jan-76

Jan-78

Jan-80

Jan-82

Jan-84

Jan-06

Jan-08

Source: Clarksons, April 2010

tanker fleet development
Tanker Fleet Development

550

500

450

10-24 tanker

400

handy

350

MR

300

deadweight (million)

Panamax

250

Aframax

Suezmax

200

VLCC

150

100

50

0

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2012

1982

1970

1972

1974

1976

1978

1980

2004

2006

2008

2010

Source: Clarksons (September 2009)

tanker age profile
Tanker Age Profile

500

400

Handy

MR

300

no of vessels

Panamax

200

Aframax

Suezmax

100

VLCC

0

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2013

2014

1980

1981

1982

1983

1984

1985

1986

1987

1988

2008

2009

2010

2011

2012

1970-1974

1975-1979

Source: Clarksons, April 2010

tanker fleet comparisons
Tanker Fleet Comparisons

non-double hull

On Order

Built since 2000

80

70

75

73

69

69

68

60

58

50

40

percentage of exisiting fleet

38

30

33

29

20

21

19

20

10

13

12

6

5

9

6

0

VLCC

Suezmax

Aframax

Panamax

MR

Handy

Source: Clarksons, April 2010

where next for single hull tankers current trading status
Where next for Single Hull Tankers ? Current trading status

100%

90%

Storage%

80%

70%

Inactive%

60%

50%

% of single hull fleet

Domestic

40%

Trading%

30%

20%

Normal

Trading%

10%

0%

VLCC

Suezmax

Aframax

Panamax

MR

Handy

Total

Fleet

Source: Clarksons, April 2010 (datasource: Clarksons/LLI)

slide24

Where next for Single Hull Tankers ?

  • Trading beyond 2010 ?
  • Flag/Port State positions re MARPOL 13G trading up to the age of 25 years

Australia No

China No

EU No

Mexico No

Romania No

S Korea No*

Philippines No*

UAE No*

(*No official note

sent to IMO yet)

Bahamas Yes

Barbados Yes

Liberia Yes

Marshall Isl. Yes

Panama Flag Yes

Japan Yes

Singapore Yes

India Yes

Hong Kong Yes**

(** Max. 20 years old)

United States N/A

(OPA90)

average tanker freight rates based on the baltic rates
Average tanker freight rates(based on the Baltic rates)

USD/Day

Source: Baltic Exchange/INTERTANKO

May 2010

lower freight rates fleet surpluses
Lower Freight Rates & Fleet surpluses

Implications ?

  • Challenge to maintain quality and standards, - e.g. maintenance, training
  • Challenge to address the issues of the day – e.g. including environmental challenges

Potentially made even worse if new ships are of low standard ?

shipbuilding capacity
Shipbuilding capacity
  • A future unknown factor !
shipbuilding output and forecast
Shipbuilding output and forecast

m cgt

Source: Worldyards/INTERTANKO Aug 09

shipbuilding output potential
Shipbuilding output potential

m cgt

Worldwide estimates in m cgt

- small and big ships (Aug 09)

Source: Worldyards/INTERTANKO Aug 09

shipyard output potential surplus
Shipyard output potential - surplus

Implications ?

  • Distressed sales / lower prices
  • Quality and standards maintained or weakened
  • Pressure on suppliers and sub-contractors
  • Greater customer focus & customisation
  • and any government interventions ?
slide33

Thank you

اﺮﻜﺷ

For more information, please visit:

www.intertanko.com

www.maritimefoundation.com

www.poseidonchallenge.com

www.shippingfacts.com

London, Oslo. Washington, Singapore and Brussels

tanker incidents and accidental pollution
Tanker Incidents and accidental pollution

Number incidents

‘000 ts pollution

Based on data from LMIU, ITOPF + others

fleet growth
Fleet Growth

2000-2009

2009

2010

2011

20

15

10

% change y-o-y

5

0

-5

VLCC

Smax

Amax

Pmax

MR

Handy

*Includes slippage, cancellation and removal ideas

Source: Clarksons, April 2010

vlccs deliveries and deletions
VLCCs* deliveries and deletions

Number

1966 Idemitsu Maru, the first VLCC delivered by IHI, 206,000 dwt

1976 Seawise Giant, the largest tanker delivered by Sumitomo H.I , 564,650 dwt

1974 the largest number of VLCCs delivered, 124

1982 only one VLCC was delivered

*Here VLCCs include all tankers above 200,000 dwt

** trading include short term storage, not lay-up or long term storage

Source: INTERTANKO , LR Fairplay current fleet, Clarkson deliveries

tanker sales for demolition and vlcc freight rate
Tanker sales for demolitionand VLCC freight rate

30

100,000

VLCCs sales for demolition

<200,000 dwt sales for demolition**

VLCC freight rate***

24

80,000

18

60,000

12

40,000

6

20,000

0

0

85

86

87

88

89

90

91

92

93

94

95

96

97

98

99

00

01

02

03

04

05

06

07

08

09*

USD / day

m dwt

  • * Until week ending 4 September
  • ** Sales for demolition until 4 September
  • *** Clarkson Freight rate AG-Japan week ending 4 September

Source: INTERTANKO