Chemical Tankers Supply & Demand - Navigate · PDF fileChemical Tankers Supply & Demand...

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Chemical Tankers Supply & Demand
IPTA/Navigate Conference
London 15 March 2017
March 2017 PRIVATE & CONFIDENTIAL

2www.drewry.co.ukChemical tankers supply & demand
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Chemical tankers supply & demand
Agenda
1. Current Market - Freight rates, earnings, areas
2. Demand - Chemical categories, historical growth, forecasts
3. Supply - Fleet progression, age profile, forward projections
4. Supply/Demand index
5. Conclusions

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Current Market: Spot Rates
1Q 14 3Q 1Q 15 3Q 1Q 16 2Q 3Q 4Q
20
30
40
50
60
70
80
90
100
110
120
130 Spot rates USD pmt
TAE 5K TAW 5K TPW 5KAG-Eur 10K AG- Ind 10K AG-China 10KTAE 1K SS TPW 1K SS
1Q14
2Q 3Q 4Q 1Q15
2Q 3Q 4Q 1Q16
2Q 3Q 4Q
70
80
90
100
110
120
130
140 Drewry Freight Index
chem veg

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Current Market: Earnings v bunker costs

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Seaborne Chemical Trade, Major Long Haul Routes
0
1,000
2,000
3,000
4,000
5,000
6,000
2011 2012 2013 2014 2015 2016e
'000
to
nn
es
US to SE Asia US to NW Europe US to NE Asia
0
3,000
6,000
9,000
12,000
15,000
18,000
2011 2012 2013 2014 2015 2016e
'00
0 to
nn
es
Middle East to NW Europe Middle East to SE Asia
Middle East to NE Asia
0
500
1,000
1,500
2,000
2,500
3,000
2011 2012 2013 2014 2015 2016e
'000
to
nn
es
NE Asia to NW Europe NE Asia to South Asia
NE Asia to US
0
500
1,000
1,500
2011 2012 2013 2014 2015 2016e
'000
to
nn
es
NW Europe to NE Asia NW Europe to South America
NW Europe to US

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Demand: Seaborne Chemicals 10 Year Vols by category
600
650
700
750
800
850
900
950
1,000
1,050
07 08 09 10 11 12 13 14 15 16
0
20
40
60
80
100
120Annual volumes (M tons)
Org Veg Inorg Other Prods R Axis
2016
230M
M
ton
Av Incr
pa
Org 112 3.10%
Veg 73 2.30%
Inorg 31 3.60%
Other 15 2.60%
R Prod 984 3.60%

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Demand: Organic Chemicals
2012 2013 2014 2015 2016
0
10
20
30
40
50
60
70
Top 3 Chems (M tons)
Meth Xyl EG
Organics 2016 (M tons)
Methanol 29
Xylenes 19.2
Eth Glycol 11.7
Styrene 8.2
Benzene 6.9
MTBE 6.2
Toluene 3.1
EDC 3.1
Acetic 2.3
VAM 1.9
Butanols 1.7
Acrylo 1.2
Phenol 1.4
Acetone 1.3
Other 14.5
Methanol
Expect sharp increase
of imports to China. 2
new MTO plants in
Jiangsu start up
2016/2017. More new
MTO plants Shandong
& Tanjin from 2018.
Imports from USA,
Caribbs, S America
and ME (no MEOH
Skorea/Japan/Taiwan).
Xylenes
China is largest
importer (PTA
production). Major new
PX capacity in China
2019-2021, until then
no reduction in
imports.

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Demand: Vegoils & Fats
2012 2013 2014 2015 2016
0
10
20
30
40
50
60
70
Top 3 Veg (M tons)
Palm Soy Sun
Veg/Fat 2016 (M tons)
Palm 40.3
Soy 10.7
Sunfl 7.3
Rape 3.3
PKO 2.7
CNO 1.7
Olive 1.2
Tallow 1.1
Fish 0.7
Corn 0.7
Other 2.9
Palm Oil
Sharp drop in exports
in 2016. Recovery in
production expected in
2017 and onwards,
with increasing
demand for biodiesel

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Demand: Inorganics and Other Chemicals
2012 2013 2014 2015 2016
0
5
10
15
20
25
30
35
Caustic Phos Acid Sulphuric Other
2012 2013 2014 2015 2016
0
2
4
6
8
10
12
14
16
Molasses Ethanol Urea
Inorganics (M tons) Other Chemicals (M tons)

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Demand: Forecast 2016-2020
600
700
800
900
1,000
1,100
1,200
2016 2017f 2018f 2019f 2020f
0
20
40
60
80
100
120
Demand Forecast M tons
Org Inorg Veg Other Ref Prod (R axis)
Year
Forecast change
Chems R Prods
2017 2.5% 3.1%
2018 1.7% 3.0%
2019 1.7% 2.9%
2020 1.2% 2.9%

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Supply: when is a chemical tanker not a chemical tanker?
2007 Vegs/acids reclassified.
End 2016: 4,264 IMO classed oil/chemical tankers,
total 101.8M DWT.
Main Trade
(Drewry estimate) No. ships DWT
Chem/vegoil 56% 36%
CPP/Products 44% 66%

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Supply: 2006-2016 NB surge leads to Overcapacity
0
200
400
600
800
1,000
1,200
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
1-5k 5-10k 10-20k 20-30k
30-40k 40-55k 55k+
High number of
13,000 dwt coated
vessels built 2006-
2012
Surge in basic
coated small
tankers, China and
Turkey 2007-2012
Emergence of 40-
55K coated swing
tonnage since 2008
No. Ships

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Supply: Chemical Tanker Age Profile 2016

15www.drewry.co.ukChemical tankers supply & demand
Supply: Deliveries and Demolitions/Removals (Dwt 000)
70,000
80,000
90,000
100,000
110,000
120,000
130,000
-6,000
-3,000
0
3,000
6,000
9,000
12,000
2010
2011
2012
2013
2014
2015
2016f
2017f
2018f
2019f
2020f
Deliveries Demolition Fleet (right axis)

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Supply: Fleet Net Growth 2014-2020
2014 2015 2016 2017 2018 2019 2020
500
700
900
1,100
1,300
1,500
1,700
no. ships
< 10K 10-25K 25-40K > 40K
40K: continued
expansion in swing
tonnage. Mainly
coated.
25-40K. Gradual
increase, coated and
stainless

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Chemical Tanker supply/demand Projection
2014 2015 2016 2017 2018 2019 2020
80
85
90
95
100
105
110
115
120

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