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Karan Grover – Braemar Quincannon Pte Limited16th IMPCA 2013 Asian Methanol Conference
METHANOL SHIPPING:A SNAPSHOT
16TH IMPCA ASIAN METHANOL CONFERENCESINGAPORE, 01 NOV 2013KARAN GROVER
SHIP BROKERBRAEMAR QUINCANNON PTE LTD
AGENDA• BQ INTRODUCTION
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• METHANOL DYNAMICS IN BRIEF
• METHANOL SHIPPING - OVERVIEW• REQUIREMENTS• TYPICAL METHANOL CARRIER• TRADE PATTERNS FROM MIDDLE EAST TO THE FAR EAST• TONNAGE PROFILE• FREIGHT RATES
• SHIPPING MARKETS
• SUMMARY & Q/A
Karan Grover – Braemar Quincannon Pte Limited16th IMPCA 2013 Asian Methanol Conference
BRAEMAR QUINCANNON PTE LTD• INDEPENDENT SHIPBROKERS ESTABLISHED IN 1998 IN
SINGAPORE AS A JOINT VENTURE BETWEEN BRAEMAR SEASCOPE &QUINCANNON ASSOCIATES WITH A SISTER
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SEASCOPE &QUINCANNON ASSOCIATES WITH A SISTER COMPANY BQ SHANGHAI
• SHIP BROKERING BUSINESS FOR BULK SHIPMENTS IN • METHANOL / CHEMICALS / SPECIALTY PRODUCTS • GAS• FATS / OIL / ETHANOL / CPP• SPECIAL PROJECTS & CONSULTING
• 21 STAFF LOCATED IN SINGAPORE• 11 BROKERS W/ SHIPPING BACKGROUND• 8 POST-FIXTURE & OPERATIONS SUPPORT STAFF• DEDICATED DEMURRAGE ANALYST• DEDICATED RESEARCH ANALYST
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METHANOL IS THE CHEAPEST WAY TO
TRANSPORT ENERGY!
Karan Grover – Braemar Quincannon Pte Limited16th IMPCA 2013 Asian Methanol Conference
METHANOL DYNAMICS• CAPACITY: 80MT DEMAND: 60MT FALLOW: 20MT
• ASIA ~ 65% OF DEMAND OF WHICH CHINA MORE THAN 50%
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ASIA 65% OF DEMAND OF WHICH CHINA MORE THAN 50%
• STEADY UPTREND IN DEMAND - DRIVEN BY THE ENERGY SECTOR• 45MT IN 2010 – 50MT IN 2011 – 60MT IN 2012 - 60MT IN 2013
PROJECTED 80MT IN 2016AMONGST THE LARGEST TRADED CHEMICAL COMMODITIES
METHANOL TRADE FLOWS
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Karan Grover – Braemar Quincannon Pte Limited16th IMPCA 2013 Asian Methanol Conference
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METHANOL TRADE FLOWS REQUIRE SHIPPING ON SPECIALIZED TANKERS
SHIPPING• METHANOL IS SHIPPED IN SPECIALIZED TANKERS
WITH FOLLOWING ATTRIBUTES:
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• IMO CLASSIFICATION• IBC CODE TYPE III OR UP
• COMPATIBLE TANK COATING • STAINLESS STEEL / MARINE LINE / ZINC• EPOXY TANKS ARE NOT RECOMMENDED TO CARRY METHANOL
• STRIPPING CAPACITY (MARPOL CATEGORY “Y” )• ACCEPTABLE RESIDUE PER TANK (75 LTRS – 150 LTRS PER TANK)
• INERTING / PURGING ABILITY• FOR TANKS OVER 3000 CBM
Karan Grover – Braemar Quincannon Pte Limited16th IMPCA 2013 Asian Methanol Conference
TYPICAL METHANOL CARRIER• SIZE RANGE:
• 13,000T DWT UPTO 50,000T DWT & ABOVE
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, ,
• AVERAGE SPEED:• 12 – 14 KNOTS
• 04 – 05 DAYS TRANSIT FROM MIDDLE EAST TO WCI• 12 – 14 DAYS TRANSIT FROM MIDDLE EAST TO SINGAPORE • 19 – 21 DAYS TRANSIT FROM MIDDLE EAST TO MID CHINA
• ABILITY TO LOAD AND CARRY MULTIPLE CARGOES• MULTIPLE TANKS WITH INDIVIDUAL MANIFOLD, PUMPS AND
LINES FOR EACH TANK
• AVERAGE SIZE HAS INCREASED OVER THE YEARS
A TYPICAL IMO 2/3 TANKER
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Karan Grover – Braemar Quincannon Pte Limited16th IMPCA 2013 Asian Methanol Conference
CHEMICAL v PRODUCT / CRUDE TANKER
CHEMICAL TANKER CRUDE OIL TANKER
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A TYPICAL CHEMICAL TANKER - SCHEMATICS
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Karan Grover – Braemar Quincannon Pte Limited16th IMPCA 2013 Asian Methanol Conference
GLOBAL METHANOL TONNAGE - EXISTING• ~ 4100 SHIPS @ ~88MT DWT / ~98M CBM
“IMO” CLASSED SHIPSMOSTLY SIMPLE IMO TONNAGE
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• MOSTLY SIMPLE IMO TONNAGE• TRADING CPP – BUT ABILITY TO “SWING”
• QUALITY METHANOL TONNAGE LIMITED / 28.6 MIL CBM• 7.5 MIL CBM ZINC SPACE• 5.7 MIL CBM MARINE LINE SPACE• 15.4 MIL CBM STAINLESS SPACE
• YOUNG FLEET~ AVERAGE AGE OF 10 YRS
• AVERAGE AGE OF SCRAPPING IS 25 YRS• DOWN FROM 28 YEARS
• THERE IS AN IMBALANCE IN SUPPLY AND DEMAND • SUFFICENT TONNAGE TO COPE UNTIL 2015-2016
NEW BUILDS & SCRAPPING (2004 – 2015)
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OF
SH
IPS
MT DWT
# O
Karan Grover – Braemar Quincannon Pte Limited16th IMPCA 2013 Asian Methanol Conference
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CURRENT SHIPPING MARKETS ARE UNDER
PRESSURE
VESSEL ECONOMICS – 45K DWT TANKER• FINANCIAL COST:
• NEW BUILD COST $38 MIL• DAILY FINANCE COST $11 000
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• DAILY FINANCE COST $11,000 (80% FINANCED @ 6% OVER 10 YRS)
• VESSEL DAILY OPERATING COSTS:• CREW $3,500• MAINTAINENCE $2,000• INSURANCE $700• ADMINISTRATION $800• BREAK EVEN / LAY-UP $7,500
• T/C BREAK EVEN $18,500 / DAY
• CURRENT T/C RATES $14,500 - $15,000 / DAY
• RESIDUAL SCRAP VALUE $4.8 MIL(11500 LDT @ USD 420 ~ 25 YRS)
Karan Grover – Braemar Quincannon Pte Limited16th IMPCA 2013 Asian Methanol Conference
FREIGHT RATES EX MIDDLE EASTB
UN
KE
R
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- - - IFO 380 BUNKERS
GH
T P
ER
MT
R &
ME
THA
NO
L CFR
*METHANOL PRICE DATA PROVIDED BY METHANOL MARKET SERVICES ASIA (MMSA)
FRE
IG PR
ICE
PE
T MT
CURRENT SHIPPING MARKETS• OVER CAPACITY OF TONNAGE CONTINUES
• BUT SUPPLY AND DEMAND EXPECTED TO COME TO AN
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BUT SUPPLY AND DEMAND EXPECTED TO COME TO AN EQUILIBRIUM W/ ADDITIONAL CAPACITIES COMING ON-STREAM
• SHIPPING MARKETS ARE STILL SOFT• SLOW BUT STABLE YEAR – W/ LITTLE VOLATILITY
OWNERS STILL STRUGGLING• OWNERS STILL STRUGGLING• EARNINGS & SENTIMENTS STRONGER COMPARED TO 2012
• MARKETS IN A STATE OF TRANSITION & OWNERS ARE OPEN TO CHANGING TRADING PATTERNS
Karan Grover – Braemar Quincannon Pte Limited16th IMPCA 2013 Asian Methanol Conference
SHIPPING MARKETS• SHIPPING MARKETS TIGHTENING AND EXPECTED
TO TIGHTEN
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TO TIGHTEN• COMMERCIAL AND POOL OPERATORS PUSHING UP T/C
RATES
• 2013 SHIPPING CONTRACTS RENEWED AT HIGHER LEVELS• OWNERS MORE BULLISH THAN PREVIOUS YEARS & NOT
SHY TO WALK AWAY FROM LOW PAYING BUSINESS
• STABLE BUNKER PRICES IN 2013• PIRACY - NOT A MAJOR FACTOR, BUT REMAINS A
THREAT• IRAN STABLE AND AN ECO-SYSTEM BY ITSELF
• PREMIUM ON RATES, BUT SHIPS AVAILABLE
THE IMPORTANCE OF SHIPPING TO THE
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SHIPPING TO THE METHANOL BUSINESS
CANNOT BE OVER-EMPHASIZED
Karan Grover – Braemar Quincannon Pte Limited16th IMPCA 2013 Asian Methanol Conference
SUMMARY• METHANOL IS ONE OF THE LARGEST TRADED COMMODITES &
METHANOL DEMAND IS EXPECTED TO CONTINUE TO GROW
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• METHANOL IS THE CHEAPEST FORM OF TRANSPORTING ENERGY
• METHANOL REQUIRES TO BE SHIPPED ON SPECIALIZED TANKERS
• SHIPPING COSTS ACCOUNT FOR A SUBSTANTIAL PERCENTAGE OF THE TOTAL COST COMPARED TO OTHER COMMODITIES
• CURRENT FREIGHT RATES ARE LOW AND SHIPPING MARKETS EXPECTED TO TIGHTEN 2015 ONWARDSEXPECTED TO TIGHTEN 2015 ONWARDS
• FOR A WORLD SCALE PLANT (1.5 MIL MT) – AN OPTIMIZATION OF JUST US $1 REPRESENTS US $30 MIL IN SAVINGS OVER 20 YRS
• THE IMPORTANCE OF SHIPPING TO THE METHANOL BUSINESS CANNOT BE OVER-EMPHASIZED
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THANK YOU!
Karan Grover – Braemar Quincannon Pte Limited16th IMPCA 2013 Asian Methanol Conference
BRAEMAR QUINCANNON PTE LTD
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1 PICKERING STREET #08-01GREAT EASTERN CENTRE
SINGAPORE 048659T: +65 9112 3824
CHEMS@BRAEMARQUINCANNON.COM.SG
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