tanker contracting bn $/ m dwt
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Tanker supply until 2015OECD working party on shipbuilding
Paris by
Erik.Ranheim@INTERTANKO.comManager Research and Projects
Paris 4-5 December 2008
Tanker contracting bn $/ m dwt
bn $
Source. Clarkson Shipyard Monitor
m dwt
Av 7.3 17.5
19.9 38.9 $ 38.4 61.1 dwt
0
10
20
30
40
50
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
Se
p-0
8
0
10
20
30
40
50
60
70
80
90
100
Handy
Panamax
Aframaxes
Suezmaxes
VLCCs
dwt
Tanker fleet, orderbook, SH tankers
58.7 169.8 377.7 m dwt Average age 10.9 years 89% <20 years old 75% <15 years old 61% <10 years old
m dwt
0
60
120
180
240
300
360
SH - 16% Orders - 48% Fleet - 100%
VLCC - 103
Suezmax - 39
Aframax - 99
Panamax - 77
25-60,000 - 287
19%
29%
54%
38%
54%
Tanker deliveries, removals, max phase-out 25,000 – 59,999 dwt
m dwtm dwt
Assumed balanced market end 2007
Fleet 1,614 66 m dwtOrderb. 435 20 “ 30%Not DH 287 11 ” 19%
-6
-4
-2
0
2
4
6
8
10
12
14
-02 03 04 05 06 07 08 09 10 11 12 13 14 15
Max phase out
Demolition
Delveries
Surplus 0%increase tradeSurplus 2.5%increase tradeSurplus 4%increase trade
year
Tonnage overhang
Tanker deliveries, removals, max phase-out Panamaxes 60,000 – 79,000 dwt
m dwtm dwt
Assumed balanced market end 2007
-3
-2
-1
0
1
2
3
4
5
6
7
-02 03 04 05 06 07 08 09 10 11 12 13 14 15
Max phase out
Demolition
Delveries
Surplus tonnagezero increasedemand
Surplus tonnage2.5% increasedemand
Surplus tonnage4% increasedemand
Fleet 377 25 m dwtOrderb. 132 10 “ 38%Not DH 72 5 ” 19%
Tanker deliveries, removals, max phase-outAframaxes 80,000 – 119,999 dwt
m dwtm dwt
Assumed balanced market end 2007
-5
-3-1
1
3
57
9
1113
15
17
1921
23
25
-02 03 04 05 06 07 08 09 10 11 12 13 14 15
Max phase out
Deletions
Delveries
Surplus 0%increaser indemandSurplus 2.5%increaser indemandSurplus 4%increaser indemand
year
Tonnage overhang
Fleet 762 79 m dwtOrderb. 271 30 “ 38%Not DH 99 9 ” 12%
Tanker deliveries, removals, max phase-outSuezmaxes 120,000 – 199,999 dwt
m dwtm dwt
Assumed balanced market end 2007
Fleet 359 55 m dwtOrderb. 186 29 “ 53%Not DH 38 6 ” 10%
-4
0
4
8
12
16
20
24
28
-02 03 04 05 06 07 08 09 10 11 12 13 14 15
Max phase out
Deletions
Delveries
Surplus zerodemandincreaseSurplus 2.5%demandincreaseSurplus 4%demandincrease
year
Tanker deliveries, removals, max phase-outVLCCs 200,000 dwt +
m dwtm dwt
Assumed balanced market end 2007
Fleet 503 149 m dwtOrderb 261 81 “ 54%Not DH 103 28 ” 19%
-20
-12
-4
4
12
20
28
36
44
52
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Max phase out
Actual Deletions
Delveries
Surplus zeroincrease
Surplus 2.5%increase
Surplus 4%increase
year
Assumed removals ahead of phase out 2008
Tanker deliveries, removals, max phase-outAll tankers > 25,000 dwt
m dwtm dwt
Assumed balanced market end 2007
-35
-15
5
25
45
65
85
105
125
-02 03 04 05 06 07 08 09 10 11 12 13 14 15
Max phase out
Deletions
Delveries
Surplus zerotrade growthSurplus 2.5%trade growthSurplus 4%trade growth
year
Removals in addition to phase out (conversions)
Investment in new tankers
• Some $ 327 billion invested since 2000 with the result that 96% of tanker fleet double hulled in 2010*
6
22
5159
67 68 73 78 8491 96
94
78
4941
33 32 27 22 169 4
0
20
40
60
80
100
1991
1997
End
02
End
03
End
04
End
05
End
06
End
07
End
08
End
09
End
10
SH/DB/DS
DH
% dwt share:
*Assuming only DB/DS tankers continue to trade beyond 2010, some SH tanker will most probably continue until the age of 25 years old
Tanker fleet development
Tanker fleet increase 2003-2010: 61%
290
328
366
404
442
480
518
92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12
3,300
3,800
4,300
4,800
5,300
5,800
dwt Number
m dwt number
Need for new contractsassuming 4% increase in demand
m dwtm dwt
Assumptions:All SH out by 2010 (questionable)Balanced market end 2007 (some slack existed)Current orderbook 24 years life time DH tankers as from 2016
0
6
12
18
24
30
2008 2009 2010 2011 2012 2013 2014 2015
VLCC
Suezmax
Aframax
Panamax
25 - 59,999 dwt
Average ordering 2003-2008
Conclusion
Conclusion
• A tanker surplus is building up unless demand is strong
• Crises probably means abating demand
• No need for additional tanker orders over the next couple of years
Appendix
The tanker market facing
• Financial and economic turmoil
• Abating demand
• Demand firstly powered by China
• Probably cancellation of contracts,
• Increasing fleet 2009-2011
• Scrapping up, as
• Conversions to dry bulk halted
Single-hull phase-out regulation
U.S. OPA 90DH for new tankers SH phase-out by 2010(by in 2015 LOOP, lightering areas)
IMO – MARPOLDH for new tankersAccelerated phase out as from 2005SH phase-out by 25 years or latest 2010, or by 2015 subject to administrations (flag/port)
IMO – MARPOL 13H Bans HGO as cargo in SH tankers
SH trading beyond 2010?
– Australia No– China No– EU No– Mexico No– Romania No– S Korea No– Philippines No– UAE No
no official note to IMO on
– Bahamas Yes– Barbados Yes– Liberia Yes– Marshall Isl. Yes– Panama Flag Yes– Japan Yes– Singapore Yes– India Yes– Hong Kong * Yes
*20 years
Flag/Port States positions MARPOL 20 Trading until the age of 25 years
– United States N/A OPA90
Global Financial Crisis Tanker Fleet Removals
Source: INTERTANKOSource: INTERTANKO
m dwtm dwt
ConversionsConversions 2005 2006 2007 2008 2009
Small 2Small 2 0 0 13 13 23 23Aframax 0Aframax 0 4 4 19 19 14 14Suezmax 0Suezmax 0 6 6 13 13 9 9VLCC 2VLCC 2 9 9 15 15 30 30
0
6
12
18
24
3019
6919
7019
7119
7219
7319
7419
7519
7619
7719
7819
7919
8019
8119
8219
8319
8419
8519
8619
8719
8819
8919
9019
9119
9219
9319
9419
9519
9619
9719
9819
9920
0020
0120
0220
0320
0420
0520
0620
0720
08
Conversions
Scrapping
?
?
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