Review of the Shipping Freight Market, Dynamics & Outlook

Transcription

1 Review of the Shipping Freight Market, Dynamics & Outlook TZMI 2016 Congress Peter Malpas 9 th November 2016

2 Disclaimer The information contained within this report is given in good faith based on the current market situation at the time of preparing this report and as such is specific to that point only. While all reasonable care has been taken in the preparation and collation of information in this report Braemar ACM Shipbroking (and all associated and affiliated companies) does not accept any liability whatsoever for any errors of fact or opinion based on such facts. Some industry information relating to the shipping industry can be difficult to find or establish. Some data may not be available and may need to be estimated or assessed and where such data may be limited or unavailable subjective assessment may have to be used. No market analysis can guarantee accuracy. The usual fundamentals may not always govern the markets, for example psychology, market cycles and external events (such as acts of god or developments in future technologies) could cause markets to depart from their natural/usual course. Such external events have not been considered as part of this analysis. Historical market behaviour does not predict future market behaviour and shipping is an inherently high risk business. You should therefore consider a variety of information and potential outcomes when making decisions based on the information contained in this report. All information provided by Braemar ACM Shipbroking is without any guarantee whatsoever. Braemar ACM Shipbroking or any of its subsidiaries or affiliates will not be liable for any consequences thereof. This report is intended solely for the information of the recipient account and must not be passed or divulged to any third parties whatsoever without the written permission of Braemar ACM Shipbroking. Braemar ACM Shipbroking accepts no liability to any third parties whatsoever. If permission is granted, you must disclose the full report including all disclaimers, and not selected excerpts which may be taken out of context. For more information, contact Research on +61 (08)

3 Braemar ACM Shipbroking Braemar ACM Shipbroking is a wholly owned subsidiary of Braemar Shipping Services PLC a UK-based LSE company comprised of four divisions with shipbroking at its core. Braemar Shipping Services PLC is one of the largest shipping services companies in the world with headquarters in London and regional offices in Aberdeen, Dubai, Shanghai, Beijing, Singapore, Mumbai, New Delhi, Melbourne, Sydney and Perth. The Australian offices have 50 employees, whilst the Group employs over 1,000 people worldwide. Braemar has no principal activities in ship owning or operating.

4 Freight Rate Review

5 Dry Bulk Segments Small Handysize Traditional Handysize Large Handysize Handymax Supramax Ultramax Panamax Kamsarmax Post Panamax Mini Cape Standard Capesize Large Capesize VLOC 10,000 24,999 dwt 25,000 34,999 dwt 35,000 39,999 dwt 40,000 49,999 dwt 50,000 59,999 dwt 60,000 69,999 dwt, Max m LOA 58,000 78,999 dwt, Min 200m LOA 79,000 83,799 dwt 84, ,000 dwt 100, ,999 dwt 130, ,999 dwt 200,000+ dwt 200,000+ dwt, Ore carriers

6 US$/Day Handysize Average vs. Australian Round Voyage (HS5) 28/10/ ,000 10,000 8,000 6,000 4,000 2,000 0 Source: The Baltic Exchange HS5 (LH axis) Handysize Avg. (LH axis)

7 Million dwt/ Year Handysize Supply: Demand 28/10/ Supply Demand Source: Braemar ACM Research

8 But think about capes for a moment A 172,000 dwt cape in May 2008 earnt at the peak US $234,000 per day. BUT The same ship in February 2016 earnt US $500 per day.

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10 US$/Tonne Bunker & Crude Oil Prices 28/10/ US$/Barrel Source: MABUX/UBS Singapore 380 CST (LH axis) Crude Spot (RH axis)

11 Trade

12 Billion Tonnes Dry Bulk Trade Growth 06/10/ Source: Braemar ACM Research Iron Ore Coking Coal Thermal Coal Agribulk Bauxite / Alumina Minor Ores Steel Industry Minor Bulks Phosrock / Fertilizers Forest Products Other Minor Bulks

13 Where is the Growth? A Second Commodity Cycle History tells us that steel intensity peaks ahead of non-ferrous metals (like copper), which in turn peaks ahead of car ownership; plastics use; calorific intake; and residential electricity demand. So while peak steel is an important marker on China s path to wealth it is not the beginning of the end, but the end of the beginning. (BHPB)

14 Billion Tonnes Minor Dry Bulk Trade Growth 06/10/ Agribulk Bauxite / Alumina Minor Ores Steel Industry Minor Bulks Phosrock / Fertilizers Forest Products Other Minor Bulks Source: Braemar ACM Research

15 Impacts on Freight Growth switching from major bulks to minor bulks Iron Ore => Base Metals Infrastructure => Consumption Raw Materials => semi-processed / value-added Less freight intensive, smaller vessels

16 Fleet Supply Review

17 Number of Ships What has been ordered this year vs. 01/10/ vs (same period) Total orders in same period 2016 = 6 ships 2015 = 212 ships 2014 = 606 ships Source: Braemar ACM Research

18 What has been scrapped this year vs vs (same period) 01/10/2016 Ultramax Supramax Total scrapped in same period 2016 = 26.8 Mn Dwt 2015 = 23.8 Mn Dwt 2014 = 12.7 Mn Dwt 2012* = 28.3 Mn Dwt *Record annual scrapping Handymax Large Handysize Traditional Handysize Small Handysize vs vs To Date, DWT Scrapped (Mn tonnes) Source: Braemar ACM Research

19 Number of Ships Bulker Fleet & Orderbook 01/10/2016 2,200 2,000 1,967 1,800 1,600 1,400 1,421 1,200 1, Source: Braemar ACM Research Fleet Orderbook

20 Preference of Larger Handysizes

21 Number of Ships Small Handysize 10,000-24,999 DWT /10/ Source: Braemar ACM Research Fleet Orderbook

22 Number of Ships Traditional Handysize 25,000-34,999 DWT /10/ Source: Braemar ACM Research Fleet Orderbook

23 Number of Ships 72 Large Handysize 35,000-39,999 DWT /10/ Source: Braemar ACM Research Fleet Orderbook

24 Ballast Water

25 Ballast Water Management Legislation The International Convention for the Control and Management of Ships' Ballast Water and Sediments (BWM Convention) will enter into force on 8 September The BWM Convention requires ships to manage their ballast water to help prevent the spread of invasive aquatic species which can harm local ecosystems. This is exactly one year after Finland s accession of the convention last month and so reaching the necessary percentage of the world s fleet to trigger the implementation date of the convention. The BWM Convention was adopted in 2004 by the IMO.

26 Number of Ships Handysize Fleet Incl: Small, Traditional and Large Handysize 21/10/ Get scrapped at next SS Under threat from BWT Assumed no BWT BWT ready? BWT as standard Expect 2 nd SS prior to BWT implementation Expect 3 rd SS prior to BWT implementation Fleet Orderbook Source: Braemar ACM Research

27 Bulker Delivery Schedule Jan 2011