Quo Vadis dove Andiamo TTOY TTAME

14 May 2012 Mare Forum Italy” SORRENTO

Past President Philip Embiricos

Global GDP - revisions

IS CHINA’S GROWTH MATURING?

•  CHINA IS ENTERING THE MIDDLE INCOME TRAP (5,000 TO 15,000USD/HEAD)

•  AT THIS POINT THERE IS A SHIFT IN GROWTH RATE

•  Japan in 70’s Taiwan in 80’s Korea in 90’s all shifted down from 9% to 5%

•  CHINA WITH A GROWTH RATE OF 11% MIGHT SLOW DOWN TO 7% OVER THE NEXT FEW YEARS

China stimulus already spent

Has the stimulus money been exhausted??

•  Caterpillar sales first quarter fell 45% re-exporting 20% of its earth moving equipment

•  Otis (elevators) sales 9% down 1st quarter

•  Kone ( escalators) -5 to 10% 2nd quarter •  Volvo forecast construction equipment to fall

15 to 25% this year

Only hopeful note The internal provinces will keep growing to

move populations to cities

An impending consumer?

GNP/HEAD IS GROWING RAPIDLY

5 year growth rates on basis 2010 statistics indicate that

In 2011 608M people are below USD 5000/head In 2012 344M people are below USD 5000/head

In 2013 108M people are below USD 5000/head

By end 2014 overall GNP/head could be as high as

USD 8400

CHINA’s heavy industrialisation is slowing

BUT bulk carrier deliveries are overflowing

STEEL PRODUCTION GROWTH RATE IS SLOWING DOWN

China Iron Ore Imports 2009: 630 million tons

Australia

Brazil

India

South Africa

Ukraine

Canada

Others

Source: China Customs Statistics

CHINA WANTS TO BREAK DEPENDENCE ON BIG MINERS

Shipbuilding Ordering 2011

Offshore

Container

BulkerTanker

CruiseGas

INVESTMENT 90 Billion USD

CHINA 1ST SHIPBUILDING COUNTRY IN CGT CAPACITY

FOOD FOR THOUGHT FOR BANKERS

THIS WAS WRITTEN IN 2008

US MANUFACTURING IS “RE-SHORING” (IFT Asia 25th april 2012)

Bunker costs increase more than the crude prices

Source: BIMCO, Marine Bunker Exchange

0

20

40

60

80

100

120

140

160

0

100

200

300

400

500

600

700

800

US

D p

er b

arre

l

US

D p

er t

onn

es/

Rat

io

Oil and bunker fuel prices, 2006-2012 (1 May)

380 cST Singapore (8-wk moving average)

Brent Crude (8-wk moving average), RH-axis

What will happen when we have to use 0.5% Sulfur fuels??

Clarkson’s optimum speeds

0

50

100

150

200

250

300

350

400

24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8

Fuel

cos

t sav

ing

, cha

rter c

ost i

ncre

ase

$000

best speed at $200/tonne bunkers

best speed at $1500/tonne bunkers

Martin Stopford Speech at BIMCO’s Annual General meeting, Singapore April 25th 2012

Even today Slow steaming reduces Shipping Environmental footprint

Source: BIMCO, CRSL, China Statistical Yearbook 2009

139

121.2

77.4

76.7

77.7

57.6

0 50 100 150

China Power Stations

German Power Stations

Containers fleet

Non cargo

Bulker fleet

Tanker and Gas fleet

Other dry and specialized fleet

Million Kilowatt capacity installed, 2009

Capacity Slow steaming potential

2,987 2020 PROJECTIONS RANGE 4000-6000 MKw

DOES SHIPPING REALLY REQUIRE MBM’s

WHAT IS THE SOLUTION?

•  Is LNG Propulsion a solution? •  What will be the investment? - producers

- transporters - suppliers

•  Will there be enough supply? •  Can a tramp owner ever chance it ?

Too long a subject and I don’t know enough!!!

IF YOU ARE INTERESTED

SEE YOU IN CYPRUS ON JUNE 12TH

1st MARE FORUM CYPRUS ���Eastern Mediterranean OIL & GAS ���

���