Prospects for the Clean Product Market IMSF 2015 · Eletson 2 Nakata Gumi 2 Pleiades Shipping...
Transcript of Prospects for the Clean Product Market IMSF 2015 · Eletson 2 Nakata Gumi 2 Pleiades Shipping...
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May 2015Gibson Consultancy & Research
Prospects for the Clean Product Market
IMSF 2015
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2
Source: Norden A/S
Typical Product Market Trades
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3
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Crude & ProductTanker Supply
4
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5
87
396
91
224
167
225
170
551
212
334
136
171
141
215
88
204
111
168
43
117
123
56
64
26
50
44
0% 20% 40% 60% 80% 100%
Handy
MR
LR1/Panamax
LR2/Aframax
Suezmax
VLCC0-5 yrs old
6-10 yrs old
11-15 yrs old
16-20 yrs old
21-25 yrs old
26+ yrs old
Fleet Age ProfileThe fleet is young with most sectors seeing >80% of vessels under 15 years old.
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2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
YTD
VLCC 37 90 37 98 26 55 13 13 48 38 13
Suezmax 9 81 46 51 27 74 21 9 3 48 20
LR2 15 68 58 24 0 11 1 2 54 11 17
Aframax 31 85 48 31 7 25 13 16 9 10 19
LR1 17 59 54 22 30 18 5 3 0 28 12
Panamax 5 3 1 6 0 0 2 0 0 5 0
MR 131 237 187 68 31 28 42 111 191 35 2
Handy 32 58 59 41 17 8 8 4 34 3 1
Total 277 681 490 341 138 219 105 158 339 169 84
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New Tanker Orders by Year
• Orders in Q1 2015 already represents 50% of the total placed in 2014.
• Interest in MR/Handysize remains limited.
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Tanker Orderbook as a % of the Existing Fleet
Handy(25-40 000
dwt)
MR(40-55 000
dwt)
LR1/PANAMAX
LR2/AFRAMAX
SUEZMAX VLCCTotal
Tankers
orders as % of fleet 3.8% 16.5% 10.7% 13.5% 15.8% 15.5% 13.3%
On Order 23 210 46 123 75 97 574
Existing Fleet 606 1,273 431 909 474 626 4,319
3.8%
16.5%
10.7%13.5%
15.8% 15%13.3%
0
25
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
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30
40
50
60
70
80
90
100
110
120
130
140
150
160
Ja
nF
eb
Mar
Ap
rM
ay
Ju
nJu
lA
ug
Sep
Oct
No
vD
ec
Ja
nF
eb
Mar
Ap
rM
ay
Ju
nJu
lA
ug
Sep
Oct
No
vD
ec
Ja
nF
eb
Mar
Ap
rM
ay
Ju
nJu
lA
ug
Sep
Oc
tN
ov
Dec
Ja
nF
eb
Mar
Ap
rM
ay
Ju
nJu
lA
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Sep
Oct
No
vD
ec
Ja
nF
eb
Mar
Ap
rM
ay
Ju
nJu
lA
ug
Sep
Oct
No
vD
ec
Ja
nF
eb
Mar
Ap
rM
ay
Ju
nJu
lA
ug
Sep
Oct
No
vD
ec
Ja
nF
eb
Mar
Ap
rM
ay
Ju
nJu
lA
ug
Sep
Oct
No
vD
ec
Ja
nF
eb
Mar
Ap
r
2008 2009 2010 2011 2012 2013 2014 2015
VLCC
Suezmax
LR1
LR2
MR
$ mln
8
Tanker Newbuilding PricesNewbuilding prices have remained relatively stable despite firm freight markets
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9
34 23 21 21 11 21 14
134 145105
6147 75
80 9474
34
44 38
31
29
1510
626
71 94
69
59
45 2019
38 45
31
46
37
44
4528 8
12 22
28
39
53
56
61
49
30 2416
38
25
0
50
100
150
200
250
300
350
400
450
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
VLCC Deliveries
Suezmax Deliveries
LR2/AframaxDeliveriesLR1/PanamaxDeliveries
No.
Tanker Orderbook Delivery ProfileBased on actual orders placed to date
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10
17 2243
26 18 21 1530
16
33
1413 15 8
18
89
12
25
810
12
14
21
2737 30
24
16
1815
13
11
8 19 8
8
98
8
9
14
1214
21
1110
1211
9
0
20
40
60
80
100
120
140
160
180
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
VLCC
SUEZMAX
LR2 /AFRAMAXLR1 /PANAMAXMR
No.
Tanker Scrapping ForecastInc. single hulls
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11
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Demand
14
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15
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
Ja
n
Feb
Mar
Ap
r
May
Ju
n
Ju
l
Au
g
Sep
Oct
No
v
Dec
Ja
n
Feb
Mar
Ap
r
May
Ju
n
Ju
l
Au
g
Sep
Oct
No
v
De
c
Ja
n
Feb
Mar
Ap
r
May
Ju
n
Ju
l
Au
g
Sep
Oct
No
v
Dec
Ja
n
Feb
Mar
Ap
r
2012 2013 2014 2015
30 Spore-Australia Cln 'market speed'
TC2 + TC14 (UKC-USAC + USG-UKC) 'market speed'
$/day TCE
MR Clean Product Tanker Earnings - East vs WestRound Voyage at Market Speed
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16
-5,000
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
Ja
n
Feb
Mar
Ap
r
Ma
y
Ju
n
Ju
l
Au
g
Sep
Oct
No
v
Dec
Ja
n
Feb
Mar
Ap
r
May
Ju
n
Ju
l
Au
g
Sep
Oct
No
v
Dec
Ja
n
Feb
Mar
Ap
r
May
Ju
n
Ju
l
Au
g
Sep
Oct
No
v
De
c
Ja
n
Feb
Mar
Ap
r
2012 2013 2014 2015
30 Med-Med Cln 'market speed'
37 UKC-US Cln 'market speed'
TC2 + TC14 (UKC-USAC + USG-UKC) 'market speed'
22 Baltic-UKC Cln (TC9)'market speed'
$/day TCE
MR Clean Product Tanker Earnings: Western MarketsRound Voyage at Market Speed
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17
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
Ja
n
Feb
Mar
Ap
r
May
Ju
n
Ju
l
Au
g
Sep
Oct
No
v
Dec
Ja
n
Feb
Mar
Ap
r
Ma
y
Ju
n
Ju
l
Au
g
Sep
Oct
No
v
Dec
Ja
n
Feb
Mar
Ap
r
May
Ju
n
Ju
l
Au
g
Sep
Oct
No
v
Dec
Ja
n
Feb
Mar
Ap
r
2012 2013 2014 2015
LR2 AG-East Cln 'market speed'
LR1 AG-East Cln 'market speed'
$/day
LR2 & LR1 Product Tanker TCE EarningsRound Voyage at Market Speed
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18
10000
15000
20000
25000
30000
35000
40000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 YTD
LR2 - 1 year
LR1 - 1 year
MR2 - 1 year
$/day
1 Year Product Time Charter Rates
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Product Surplus and Deficits 2014 vs. 2020 (000’ b/d)
Global Product Supply Imbalances
Source: IEA
Fuel OilGasoil/KeroseneGasoline/Naphtha
-4505251025
1025150
450
North America
-375 -525250 350
Latin America
-250 -375-675 -850
Africa
750 575
-1000-1925
400
Europe
950 1325475
675
Middle East
600 725
1000 1225
1075 400
FSU
-975 -1025
1050
-250-950
Asia
2014 2020
2014 2020
2014 2020
2014 2020
2014 2020
2014 2020
2014 2020
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JUBAIL 0.4 MILLION B/D2nd Half 2013 Aramco/Total(Full capacity August 2014)
YANBU 0.4 MILLION B/DQ4 2014 Aramco/Sinopec
(expected to reach full scale operations in mid 2015)
JAZAN 0.4 MILLION B/D2016 Aramco
(Delayed till 2017/18 )
ABU DHABI – RUWAIS0.4 MILLION B/D Q4 2014
(expected to reach full scale operations in mid 2015)
Middle East Refinery DevelopmentsAdditional Middle East crude distillation capacity will see more crude go into domestic refining benefitting LR1s & LR2s.
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0.530.64 0.60 0.58
0.46 0.39 0.38 0.38 0.31 0.27 0.25
0.180.15 0.17 0.16
0.160.17 0.15 0.16
0.16 0.15 0.22
0.230.21 0.23 0.21
0.180.17 0.17
0.15 0.130.16
0.14
0.120.13
0.13
0.080.10 0.12 0.11
0.00
0.50
1.00
1.50
2.00
2.50
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015YTD
Other
S.America
Caribs
Canada
Europe
Mln b/d
US Gasoline Imports
0.14 0.220.27
0.53 0.590.66
0.851.01
1.13 1.111.02
0.140.14
0.13
0.170.20
0.30
0.48
0.41
0.37 0.44 0.55
0.15
0.060.07
0.08
0.10
0.13
0.16 0.160.22
0.16
0.17
0.370.42
0.47
0.790.89
1.11
1.52
1.70
1.911.98
2.11
0.00
0.50
1.00
1.50
2.00
2.50
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015YTD
Naphtha
Jet-Kero
Gasoline Blending Components
Finished Gasoline
Distillates
Mln b/d
US Clean Product Exports
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22
2,200
2,400
2,600
2,800
3,000
3,200
3,400
3,600
3,800
4,000
4,200
4,400
Ja
nF
eb
Mar
Ap
rM
ay
Ju
nJu
lA
ug
Sep
Oct
No
vD
ec
Ja
nF
eb
Mar
Ap
rM
ay
Ju
nJu
lA
ug
Sep
Oct
No
vD
ec
Ja
nF
eb
Mar
Ap
rM
ay
Ju
nJu
lA
ug
Sep
Oct
No
vD
ec
Ja
nF
eb
Mar
Ap
rM
ay
Ju
nJu
lA
ug
Sep
Oct
No
vD
ec
Ja
nF
eb
Mar
2011 2012 2013 2014 2015
000 b/d
FSU Clean & Dirty Product ExportsIncreases in 2015 driven by Gasoil, Naphtha & Gasoline
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Product Import/Exports: Korea, China, Japan, Australia*Less trade in 2014 due to lower Japanese imports & lower China import/exports.
• Declining Japanese fuel oil imports and reduced Chinese import/exports has tempered trade in 2014.
• Consumption in APAC is growing, which remains positive for product tankers.
• Australian refinery closures will lead to increasing product imports.
• Regional product imbalances could create arbitrage opportunities.
0
500
1000
1500
2000
2500
3000
3500
4000
4500
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
(a) there is no double counting of import and export volumes between any of these countries(e.g. exports from Korea being imported by China are only counted once)
000' b/d
(Jan-Feb)
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24
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25
Post Panamax 2016 “Wide Beam” Deliveries
Owner No.
Navig8 Product Tankers 12
Concordia Maritime 10
Sovcomflot 8
Livanos Group 7
BW Group 6
Petrobras 4
Sinokor Merchant Marine 4
Nisshin Shipping 3
D'Amico Tankers 2
Eletson 2
Nakata Gumi 2
Pleiades Shipping Agency 2
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Upside Downside
• Modest LR1/LR2 growth in the short term.
• A reduction in European Refining capacityincreases import reliance - boosting tonne miledemand.
• New Middle East refineries increase productexports to Europe, Asia and Latin America.
• Brazilian refinery delays supports demand forproduct imports in the short term.
• Indian refiners seek new markets, sendingproduct further afield including Latin America,however Indian refiners will face competitionfrom the US, Russia and the Middle East.
• Continued Australian refinery closures lead toincreased reliance on imports.
• Russian export tariffs incentives CPP exports.
• Oversupply, particularly in the MR sector. Willhigher earnings in the LR1/LR2 sectorencourage overinvestment?
• Weak scrap prices and firmer markets lead tolower scrapping in the short term.
• Refiners scaling back throughputs in the faceof weaker margins and higher product stocks.
• Delays to major export refinery projects, i.e.Jizan.
• Slowing demand following weaker economicgrowth.
• Slower growth in US product exports comparedto previous years.
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GibsonConsultancy & Research
[email protected]+44 20 7667 1230
This report has been produced for general information and is not a replacement for specific advice. While the market information is believed to be reasonably accurate, it is by its nature subject to limited audits and validations. No responsibility can be accepted for any errors or any consequences
arising therefrom.© Gibson Shipbrokers Ltd 2015
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2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
LR2 Mid East-Japan 16,500 15,000 12,500 13,250 13,250 17,750 23,500 26,000 27,000 27,500 27,500
LR1 Mid East-Japan 13,250 11,500 9,500 11,750 12,250 15,250 21,250 23,750 24,500 24,750 24,750
MR Average East/West 8,750 11,000 12,250 11,000 15,500 14,750 19,500 21,250 22,000 22,250 22,250
8,000
12,000
16,000
20,000
24,000
28,000
$/day TCE
Outlook for Spot Product Tanker Earnings*Round voyage basis at market speed
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