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A Presentation
By
A Presentation for AFOA 2013
Chemical Tanker Market Analysis Brian A. Cleary
New York 10 October, 2013
2
GLOBAL SHIPBROKING
MARKET RESEARCH
CONSULTANCY
INTEGRATED LOGISTICS SOLUTIONS
GENERAL AGENCY
Services :
Vision :
cost effective bulk shipping and logistics solutions, placing us at the forefront of the industry's best practice.
Presence :
3
Part 1 . GDP GROWTH
PRODUCT FLOWS
FLEET GROWTH
Part 2 . FATS AND OILS (USA MARKET)
Part 3 . INDUSTRY ISSUES
Contents:
The contents of this presentation includes information that was derived from the following sources: PIERS, Platts, Drewry Shipping Consultants, CMAI,
Tradewinds News, Bloomberg, ICIS, Apic-online, Economics & Statistical Department of American Chemistry Council, IMF, Chem.cn, IE Singapore, Eurostat,
Energy Information Administration, financial reports and articles of publicly listed companies.
https://www.fatsandoils.org/
Part 1. GDP GROWTH
PRODUCT FLOWS
FLEET GROWTH
4
http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=yhoGYIyKovvjCM&tbnid=ygMkeVN1QSP9LM:&ved=0CAUQjRw&url=http://designm.ag/resources/100-free-vector-map-files/&ei=_pVJUtv1Kc-w4APax4GQCg&bvm=bv.53217764,d.dmg&psig=AFQjCNE7lXcQRygvPL5w13qkBVjWtKTGeA&ust=1380640608011512
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Market Outlook: Global Economic Outlook
Global Economic conditions remain weak . As of July 2013, the IMF projected global growth to
remain subdued at less than 4%. Europe still faces sovereign debt issues and will remain in recession for 2013. Emerging markets and developing economies are now expected to grow by 6%. Advanced economies are expected to reach growth levels of just over 2% by the end of 2013. All areas are expected to improve in 2014.
6
Market Demand: US Chemical Flows- Basket Sample of Products
US Chemical imports increased considerably in 2011 by 26.3% before coming off
slightly to stabilize around 14.3M tons in 2012
US Chemical exports increased significantly in 2011 by 16.2% with volumes stabilizing
around 15.1M tons in 2012
12,485,365t12,765,134t
16,119,830t
14,314,650t
12,685,835t 12,868,294t
14,947,147t 15,054,535t
0t
2,000,000t
4,000,000t
6,000,000t
8,000,000t
10,000,000t
12,000,000t
14,000,000t
16,000,000t
18,000,000t
2009 2010 2011 2012
Vo
lum
e (
T)
USA Chemical Import/Export 2009-2012
US Chemical Imports US Chemical Exports
7
Fleet: Parcel/Product Tanker Fleet Growth
The global fleet grew by approximately 25% between 2008 and 2012.
2013 is expected to grow by another 5-6%.
The placement of firm orders for delivery in 2014-2016 is low and potential
scrapping could result in a very small increase in overall fleet growth .
-10
0
10
20
30
40
50
60
70
80
90
2008 2009 2010 2011 2012 2013 2014 2015 2016
DW
T in
Mill
ions
Global Chemical Fleet Development from 2008 to 2016(Vessel size range upto 53,500dwt)
Fleet Added Scrapped Potential Scrapping
8
Fleet: Size Distribution
During the when financing was readily available, Owners, Investors and
Shipyards became embarking on ambitious fleet expansion
programs .
This was coupled with a trend towards larger ships used in inter -continental trades and
fewer small ships were built which will lead to tighter supply of vessels to service short sea
regional trade lanes .
The future will see fewer sophisticated ships to service smaller multi -grade parcels
shipped by Producers and Traders on various trade -lanes . Once the demand/supply
balance for tonnage tips, the uptrend in the freight curve to lift smaller grades will be
steeper than for large lots of commodity chemicals .
47%
13%
9%
8%
23%
Global Fleet by Size in 2005(by number of ships)
Under 10k
10-18k
18-28k
28-35k
36-54k
40%
20%
9%3%
28%
Global Fleet by Size in 2012 (by number of ships)
Under 10k
10-18k
18-28k
28-35k
36-54k
9
Intercontinental Fleet
0
2
4
6
8
10
12
14
16
18
20
0
50
100
150
200
250
300
350
400
450
15-17,999 18-22,999 23-29,999 30-34,999 35-39,999 40-44,999 45-49,999 50-53,500
To
ns (
'00)
No
. o
f S
hip
s
Vessel Size
Intercontinental Fleet 15,000-53,500 DWT
1,915 Ships/68 Million DWT
No. of Ships Tons ('000)
10
Freight Forecast: Supply/Demand Cycles History Repeating itself
During freight market upturns, placement of new orders for ships rise
resulting in oversupply, which in turn leads to the next freight market down
cycle .
After nearly 5 years of a poor shipping market, we are at the cross roads of
a new cycle . Delivery of new ships is declining, recycling remains at current
levels and demand for long -haul transportation is rising.
Increasing Order Book
Market Downturn
Increasing Order Book Increasing Order Book
Market Downturn
Peak in Vessel Deliveries Peak in Vessel Delivery
Market Boom Market Boom Market Boom
Length Length Length
?
11
Freight Trends: US Trade Routes
Part 2. FATS AND OILS (USA MARKET)
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http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=Y5V6OUqOrPz-3M&tbnid=P2s4BV7_PQVllM:&ved=0CAUQjRw&url=http://www.yourchildlearns.com/us_map.htm&ei=jqFJUvXdOcrl4AP4voHADQ&bvm=bv.53217764,d.dmg&psig=AFQjCNEO9j2OxLDYXfxq_0gSA4rGh_TZTA&ust=1380643591805429http://www.google.com/url?sa=i&source=images&cd=&cad=rja&docid=LhfOfmSW9kVzuM&tbnid=JvMgQJdWe-vrDM:&ved=0CAgQjRwwAA&url=http://www.ctpost.com/news/article/American-flag-featured-in-Kent-Library-exhibit-2148320.php&ei=ExdLUu33Kpev4AOPmICwBQ&psig=AFQjCNFrdUONIFaAfE4PjJNJvLQZkbwKGw&ust=1380739219756645
13
Exports increased through 2010 but are now in decline
Imports have been on the rise since 2010
2013 figures reflect imports/exports through June
USA Imports / Exports
2,806,000 MT 2,636,000 MT
14
USA Exports by Product
15
USA Imports by Product
Metric Tons
Protocols for preventing contamination during the shipping of oils in bulk by sea
FOSFA - Federation of Oils, Seeds and Fats Assoc.
EU1 - European Commission, European Food Safety Authority
NIOP - National Institute of Oilseed Products
CIQ - China Inspection & Quarantine Services
16
USA Imports of FOSFA Acceptable Last Cargoes in 2012 (14,076,000 MT)
17
Adjusted USA Imports of FOSFA Acceptable Last Cargoes 2012 (excludes carriage on dedicated ships and only 50% of Caustic Soda) 8,509,000 MT (60%)
18