Roads to Recovery: Comparing and Contrasting the Outlook for Distressed Sectors

Transcription

1 Roads to Recovery: Comparing and Contrasting the Outlook for Distressed Sectors Niklas Carlén Maritime Strategies International (MSI) 18 th Annual Marine Money Greek Ship Finance Forum 11 th October 2016

2 Introduction

3 Bulker Gen Cargo Oil Tanker Peak to Trough Comparision: Peak Levels Vs Q Chem Tanker LNG LPG Container Car Carrier RoRo 0% -10% -20% -30% -40% -50% -60% -70% -80% -90% -100% T/C Rate 5-Yr Old Price Maritime Strategies International 3

4 Demand

5 Iron Ore: Chinese Imports Growing Despite Stagnant Steel Chinese Steel Production Chinese Iron Ore Imports MnT Steel Production Yoy% Ch 900 Forecast 45% MnT 1400 Rest of World India S Africa Brazil 40% 1200 Australia 35% 30% 1000 Forecast % 20% 15% 10% 5% 0% -5% Maritime Strategies International 5

6 Coal: Indian Outlook Shrouded in Uncertainty Chinese and Indian Coal Imports Coal Seaborne Trade MnT China India 350 Forecast MnT Coking Coal Steam Coal 1400 Forecast Maritime Strategies International 6

7 Other Bulks: Short-Term Plateau, Medium-Term Growth Grains+Soya Seaborne Trade Minor Bulks Seaborne Trade MnT Soyabean+Meal Grains 600 Forecast YoY % Ch 20% % % 5% 0% -5% % 0-15% Maritime Strategies International 7

8 TEU Trade and TEU Miles 70 Mn TEU of trade Mn TEU of shipping capacity Trade volume Shipping capacity required (RH Axis) Asia-Europe Transpacific FE-ME/ISC FE-Lat. Am. intra-asia Asia-Europe isn t dominant in volume terms, but is in terms of capacity required Maritime Strategies International 8

9 Asia-Europe Transpacific Transatlantic intra-asia intra-europe Container Demand: 2016 Volume Weakness Asia-Latin America Asia-Middle East/ISC Europe-Latin America Other 6% 2016 growth 4% 2% 0% -2% -4% -6% -8% North-South trades have been the worst affected, but trade disappointing across the board Maritime Strategies International 9

10 Trade Growth is Key to Cascading Vessel Deployme nt, k TEU Non-Mainlane East/West Trade Headhaul E/W Trade YoY % Ch 9% Dec-13 Dec 14 Dec 15 Aug k TEU k TEU k TEU k TEU 12k TEU+ Demand (RH Axis) 8% 7% 6% 5% 4% 3% 2% 1% 0% The cascade has currently broken down four reasons: Low fuel price Slow trade growth Service fragmentation Alliance reshuffle In our view, trade growth is the most important of these; lines upsized in anticipation of trade growth, when that disappointed then swiftly downsized. Huge supply of spot ships puts lines under no pressure to secure tonnage can keep flexibility (2-12 month fixtures). Maritime Strategies International 10

11 Container Cascade 6 5 Evolution of Asia-Europe Deployment Mn TEU 12k + TEU k TEU k TEU k TEU k TEU k TEU Intra-Asian Deployment Mn TEU k TEU k TEU k TEU k TEU k TEU k TEU End 2011 End 2012 End 2013 End 2014 End 2015 Aug 2016 Maritime Strategies International 11

12 Seaborne Growth Prospects Compared: Dry Bulk Vs Container Trade 12% 10% YoY % Ch Container Dry Bulk Average Annual Trade Growth Over 5-Year Periods (CAGR) 8% 6% 4% 2% 0% Maritime Strategies International 12

13 Supply

14 Current Orderbook: Sectors Over-Exposed Required Ships* Vs Orderbook # of 600Vessels Ships Required Ships on order YTD Capacity Adjustment Mn GT Contracting Scrapping Bulker Container -15 Bulker Container *Required ships to meet incremental demand, irrespective of current over-capacity Maritime Strategies International 14

15 Old Tonnage versus Orderbook Bulk Carriers Containerships Mn Dwt Over 15 Years Orderbook Mn TEU 2.5 Over 15 Years Orderbook k Dwt 40-65k Dwt k Dwt 120k+ Dwt k TEU k TEU k TEU k TEU 12k+ TEU Maritime Strategies International 15

16 Help from Unusual Places? Maritime Strategies International

17 Imminent Significant (3 rd +) Special Surveys Bulk Carriers Containerships Mn Dwt 60 6th+ 5th 4th 3rd 50 % of current fleet (RH Axis) 6% 5% Mn TEU 6th+ 5th 4th 3rd % of current fleet (RH Axis) 7% 6% 40 4% 1.0 5% 0.8 4% 30 3% 0.6 3% 20 2% 0.4 2% 10 1% 0.2 1% % % Maritime Strategies International 17

18 Fleet Growth Compared: Dry Bulk Vs Container Trade 14% 12% YoY % Ch Container Dry Bulk Average Annual Fleet Growth Over 5-Year Periods (CAGR) 10% 8% 6% 4% 2% 0% Maritime Strategies International 18

19 Roads to Recovery

20 Roads to Recovery: Weighted Average Timecharter Indices Compared T/C Index (2015=100) Bulker Container Maritime Strategies International 20

21 MSI - FMV MSI Forecast Marine evaluator (FMV) is the first web-based tool to provide forecast and historical price data covering virtually all of the deepsea shipping fleet. Data includes forecasts of newbuilding, second-hand prices, 1 year timecharter rates and operating costs for specific vessels. MSI FMV draws on MSI s proven, proprietary models and a consistent cross-sectional view across all principal shipping sectors. It puts asset values in the context of the near term market to enable reliable benchmarking with outputs based on annual averages. Coverage: Crude Oil Tanker Chemical Tanker Multi Purpose Product Oil Tanker LPG Carrier Containership Dry Bulk Carrier LNG Carrier PCC/PCTC /fmv Maritime Strategies International 21

22 FMV Output Quarterly Fair Market Value & 1 Year Time Charter Rate (1Q history, current Q,2Q forecast Annual average: Newbuilding contract price Fair Market Value 1 Year Time Charter Rate Operating Cost 5 years history and 15 years forecast Price Development Chart detailing forecast price development in relation to historical metrics /fmv Maritime Strategies International 22

23 Asset Play Prognosis Buy 5 year old today sell in 5 years time Maritime Strategies International 23

24 Disclaimer While this document has been prepared, and is presented, in good faith, Maritime Strategies International assumes no responsibility for errors of fact, opinion or market changes, and cannot be held responsible for any losses incurred or action arising as a result of information contained in this document. The copyright and other intellectual property rights in data, information or advice contained in this document are and will at all times remain the property of Maritime Strategies International. Maritime Strategies International 24

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