Tanker supply until 215 OECD working party on shipbuilding Paris by Erik.Ranheim@INTERTANKO.com Manager Research and Projects Paris 4-5 December 28
Tanker contracting bn $/ bn $ 5 4 3 2 1 Handy Panamax Aframaxes Suezmaxes VLCCs dwt 1 9 8 7 6 5 4 3 2 1 1988 1989 199 1991 1992 1993 1994 1995 1996 1997 1998 1999 2 21 22 23 24 25 26 27 Sep-8 Av 7.3 17.5 Source. Clarkson Shipyard Monitor 19.9 38.9 $ 38.4 61.1 dwt
Tanker fleet, orderbook, SH tankers 36 3 24 18 VLCC - 13 Suezmax - 39 Aframax - 99 Panamax - 77 25-6, - 287 12 6 19% 54% 54% 38% 29% SH - 16% Orders - 48% Fleet - 1% 58.7 169.8 377.7 Average age 1.9 years 89% <2 years old 75% <15 years old 61% <1 years old
Tanker deliveries, removals, max phase-out 25, 59,999 dwt 14 12 1 8 6 4 2-2 Max phase out Demolition Delveries Surplus % increase trade Surplus 2.5% increase trade Surplus 4% increase trade -4-6 -2 3 4 5 6 7 8 9 1 11 12 13 14 15 year Assumed balanced market end 27 Tonnage overhang Fleet 1,614 66 Orderb. 435 2 3% Not DH 287 11 19%
Tanker deliveries, removals, max phase-out Panamaxes 6, 79, dwt 7 Max phase out 6 5 Demolition 4 3 Delveries 2 1-1 -2-3 -2 3 4 5 6 7 8 9 1 11 12 13 14 15 Assumed balanced market end 27 Surplus tonnage zero increase demand Surplus tonnage 2.5% increase demand Surplus tonnage 4% increase demand Fleet 377 25 Orderb. 132 1 38% Not DH 72 5 19%
Tanker deliveries, removals, max phase-out Aframaxes 8, 119,999 dwt 25 23 21 19 17 15 13 11 9 7 5 3 1-1 -3-5 -2 3 4 5 6 7 8 9 1 11 12 13 14 15 year Max phase out Deletions Delveries Surplus % increaser in demand Surplus 2.5% increaser in demand Surplus 4% increaser in demand Tonnage overhang Assumed balanced market end 27 Fleet 762 79 Orderb. 271 3 38% Not DH 99 9 12%
Tanker deliveries, removals, max phase-out Suezmaxes 12, 199,999 dwt 28 Max phase out 24 2 Deletions 16 Delveries 12 8 4-4 -2 3 4 5 6 7 8 9 1 11 12 13 14 15 Surplus zero demand increase Surplus 2.5% demand increase Surplus 4% demand increase year Assumed balanced market end 27 Fleet 359 55 Orderb. 186 29 53% Not DH 38 6 1%
Tanker deliveries, removals, max phase-out VLCCs 2, dwt + 52 Max phase out 44 36 Actual Deletions 28 Delveries 2 Surplus zero increase 12 4-4 Surplus 2.5% increase Surplus 4% increase -12-2 22 23 24 25 26 27 28 29 21 211 212 213 214 215 year Assumed removals ahead of phase out 28 Assumed balanced market end 27 Fleet 53 149 Orderb 261 81 54% Not DH 13 28 19%
Tanker deliveries, removals, max phase-out All tankers > 25, dwt 125 15 85 65 45 25 5-15 -35-2 3 4 5 6 7 8 9 1 11 12 13 14 15 year Max phase out Deletions Delveries Surplus zero trade growth Surplus 2.5% trade growth Surplus 4% trade growth Removals in addition to phase out (conversions) Assumed balanced market end 27
Investment in new tankers Some $ 327 billion invested since 2 with the result that 96% of tanker fleet double hulled in 21* 1 8 49 41 33 32 27 22 16 9 4 % dwt share: 6 4 2 94 6 1991 78 22 1997 51 End 2 59 67 68 End 3 End 4 End 5 73 End 6 78 84 91 End 7 End 8 End 9 96 End 1 SH/DB/DS DH *Assuming only DB/DS tankers continue to trade beyond 21, some SH tanker will most probably continue until the age of 25 years old
Need for new contracts assuming 4% increase in demand 3 24 18 12 VLCC Suezmax Aframax Panamax 25-59,999 dwt Average ordering 23-28 6 28 29 21 211 212 213 214 215 Assumptions: All SH out by 21 (questionable) Balanced market end 27 (some slack existed) Current orderbook 24 years life time DH tankers as from 216
Tanker fleet development number????? 45 4 Projected Actual 35 3 25 2 15 1 5 1968 197 1972 1974 1976 1978 198 1982 1984 1986 1988 199 1992 1994 1996 1998 2 22 24 26 28 21 212 214 Tanker fleet increase 23-21: 61%
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 29-211 Scrapping up, as Conversions to dry bulk halted
SH trading beyond 21? Flag/Port States positions MARPOL 2 Trading until 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 to IMO on Bahamas Yes Barbados Yes Liberia Yes Marshall Isl. Yes Panama Flag Yes Japan Yes Singapore Yes India Yes Hong Kong * Yes *2 years United States N/A OPA9
Tanker fleet development 518 number 5,8 48 442 dwt Number 5,3 44 4,8 366 4,3 328 3,8 29 92 93 94 95 96 97 98 99 1 2 3 4 5 6 7 8 9 1 11 12 3,3 Tanker fleet increase 23-21: 61%
Global Financial Crisis Tanker Fleet Removals 3 24 Conversions Scrapping 18? 12 6 1969 197 1971 1972 1973 1974 1975 1976 1977 1978 1979 198 1981 1982 1983 1984 1985 1986 1987 1988 1989 199 1991 1992 1993 1994 1995 1996 1997 1998 1999 2 21 22 23 24 25 26 27 28 Conversions 25 26 27 28 29 Small 2 13 23 Aframax 4 19 14 Suezmax 6 13 9? VLCC 2 9 15 3 Source: INTERTANKO
Single-hull phase-out regulation bn tonne-miles 12,5 Oil products Crude oil??? 1, 7,5 5, 2,5 72 74 76 78 8 82 84 86 88 9 92 94 96 98 2 4 6 P8 P1