Monthly S&P Report - Lorentzen & Stemoco AS · steel chemical tankers of 38,000 dwt at compatriot ship-yard Kitanihon Zosen. The ves- sels are scheduled for delivery in 2018 from

1

Charter rates are still doing well following an outstanding Q1, which goes some way to ex-plaining the largest Q1 crude NB ordering binge since 2007 (approx. 50 units aframax+ so far). In terms of second hand the biggest piece of news this month is not a standard sale at all – 4x Suezmaxes and 6x Aframaxes were sold at US$245m and US$291m re-spectively (based on broker valuations) by Dryships to an Economou private vehicle. A more conventional deal was the sale of the 1998 built coat-ed Afra “Atlantik” to Greeks for US$12.5m (an increase of near-ly US$4.5m from her purchase price in April 2013).

The recent flurry of activity in Dry has started to slow down as Buyers and Sellers have reached something of an im-passe; Buyers do not want to raise their price ideas to secure tonnage and Sellers do not want to accept the new market values. As such, we have seen many hitherto serious Sellers withdrawing their ships from sale. Recent sales include Unity Pride (81,000 dwt 2011 built HHI) to Embiricos at US$17.7m (incl. TC until 10/2015 at US$7,250/day), Cinzia D’Amato

(75,000 dwt 2008 built Hudong) to Chinese interests at US$11.5m, and Prabhu Sher (81,000 dwt 2011 built HHI) to Greek interests at mid/high US$17m.

Japanese tonnage provider Doun Kisen has reportedly con-tracted two IMO II stainless steel chemical tankers of 38,000 dwt at compatriot ship-yard Kitanihon Zosen. The ves-sels are scheduled for delivery in 2018 from the specialist ship-yard building chemical carriers and LPG carriers. The order comes amidst German owner Sloman Neptun ordering a sec-ond IMO II epoxy coated chemi-cal tanker of 16,500 dwt from Chinese shipyard Jiangzhou Union. A handful of chemical tankers have reportedly changed hands so far in April. The most important involves the 19,900 dwt chemical carrier Maemi built 2008 from Fukuo-ka which reportedly fetched US$23m from clients of Ace Tankers to seller Nordic Tank-ers. The Maemi is a stainless steel IMO II chemical tanker formerly known as Braken. Sim-ilar five-year old vessels are generally quoted at about US$26m.

The main player in the sale and purchase market for LPG ships lately has been BW LPG. The leading independent Owner purchased four VLGC resales of 84,000cbm from DSME for US$290m enblock. The ships were originally ordered by Chi-na Peace. BW LPG previously also declared a purchase option of the VLGC Vermillion First (2010 built) for US$73m. In the smaller ship segments we rec-orded the sale of Knightsbridge 11,000cbm PR (2009 built) at a price of US$26- 27m to Aygaz. Furthermore, Epic has sold Epic Cebu (4,000 PR, 1997 built) and the Cefalu (4,000cbm PR, 1996 built) to South East Asian buy-ers. Stealthgas has sold the Gas Crystal (3,200cbm PR, 1990) and the Gas Kaizen (4,200cbm PR, 1991) for demolition. In a surprise move Latsco ordered two fully ref. LPG carriers of 60,000cbm at Hyundai HI for Q3 2016 delivery at a price of US$70m per ship. K-Line and NYK contracted one VLGC each at Mitsubishi and Kawasaki respectively. Both ships will be delivered in 2017 and will then commence long term charters for Astomos.

HIGHLIGHTS

Crude: High new-

building activity in

Q1

Dry: Expectations

mismatch in

secondhand mar-

ket

Chemical: STST

tankers dominate

SnP activity

Gas: BW LPG ma-

kes move on resa-

les

April 2015

Dry

Crude

Chemical

Gas

Monthly S&P Report

-Shipbrokers and consultants since 1919-

Hot Hulls

2


The spring push has started as rates are firming up both East and West of Suez. Vessel supply is tight in general and the Baltic

Index look set to climb further in the weeks ahead. Houston export has normalized, Asian demand is strong and Indian ports are

severely congested; all leading to increased employment and tonne-miles.

VLGC

Dry Bulk

VLCC

A bear market on iron ore for the past 18 months has taken its toll on parts of the dry bulk market. With Australian mining majors

announcing production cuts this past week, one of the iron ore benchmarks rose by 5.9% day on day. Whilst unlikley to have a

major effect on dry bulk rates in the near future, it is still the first flicker of light at the end of the tunnel.

VLGC Fleet -Ordering and Scrapping

Capesize Values Dry Bulk Fleet - Deliveries and Scrapping

VLGC Values (82/84 kcbm)

VLCC Values VLCC Deliveries and Scrapping

VLCC values are still at relatively low levels compared to historical trends, but with recent SNP activity and interest at high levels

we expect asset values to rise steadily given the strong fundamentals underpinning the tanker market.

3

Whether you define yourself as bull or bear on crude oil, the

current fundamentals facing the oil market are inescapable, (if

their consequences not somewhat unclear at times).

Since the oil price’s drastic decline, talk has been of capex-cuts

for US producers, the bet being that tighter cash-flows will even-

tually bring less drilling investment and falling production rates -

especially in areas where well-depletion rates are high. But

whilst the Baker Hughes rig-count has fallen steadily (reduced

by almost 1,000 units since last summer), market opinion has

varied from the imminent, to the 12-month perspective on

when this will affect production. The pundits seem to have

gotten it right this time (if we don’t focus too much on their tim-

ing), as the monthly data from EIA now shows signs of produc-

tion volumes falling in

three out of four major

US shale basins, for the

first time in four years.

Bakken, Eagle Ford and

the Niobrara are likely to

see falling output be-

tween April and May,

whilst production

growth in the Permian is

set to slow down. The

total numbers show a

predicted reduction in

shale oil output of

45,000 bpd— shifting production down to 4.98 mbpd.

If we are now seeing the first indications of periodic lower crude

oil output out of the US, oil prices are likely to gain upwards

momentum (Brent crude oil has recently been floating at just

above US$60/barrel). However, how far prices will climb also

depends on other supply factors, and whether we will see OPEC

members’ objectives falling into line. Some cartel members have

short-term objectives, needing oil revenues to balance national

budgets, whilst countries like Saudi Arabia seem to be more

concerned about the peak demand of oil, taking a longer per-

spective on things. Lower crude oil prices support the competi-

tiveness of oil over renewable energy sources which will help to

secure oil producers’ market share of global energy needs into

the future.

Less production out of the US might also bring some relief to

overflowing storage of crude in the country, with Cushing Okla-

homa (the WTI benchmark) now standing at record levels of

86% of total storage capacity (up by another 7% since March).

As on-land storage is close to reaching total capacity, US produc-

tion will either have to be curbed or excess oil must go onto

floating storage. The latter development would create a tighter

tanker market.

If the market believes prices will rise, we are likely to see a re-

turn of the contango structure that received much focus earlier

this year. But in order for this to create a floating storage party

like it’s 2009, some supply side issues must come together; ei-

ther a decrease in US production levels, or escalation of tensions

in the Middle East such as

insurgents’ sabotage on oil

infrastructure in the north-

ern parts of Iraq impacting

the country’s oil supply. An

escalation in the Yemen

conflict might also tighten

the tanker market, should

owners choose to go

around the Cape instead of

the Suez Canal for security

reasons. In the past 10

months, increasing issues

with Libyan production

and ongoing conflict in parts of the Middle East have notably

raised prices only once, and for a very short period, still making

the case that US production is the marginal supplier currently

tipping price levels. The major wild-card in this scenario is when

and how the lifting of Iran sanctions will add to global crude oil

supply.

As it seems the US has entered the role of swing producer, we

suggest the shipping industry keep a keen eye on fundamentals

and hedge at least part of their bunker exposure.

Special Report - Has the future arrived?


4


Scrapping

Newbuilding Prices (China)

Bunker Prices

Dry Bulk Scrapping Scrap Price Developments

Dry Bulk NB Prices (China) Tanker NB Prices (China)

Source: AXS/L&S Research

D r y B u lk M a r-1 5 F e b -1 5 Ja n -1 5 T r e n d

N e w c a s t le m a x 5 4 .6 6 5 5 .3 5 5 .7 S o ft e n in g

C a p e s iz e 5 1 .6 9 5 2 .1 5 2 .5 S o ft e n in g

K a m s a r m a x 2 8 .4 2 8 .0 2 9 .1 S o ft e n in g

P a n a m a x 2 7 .3 5 2 7 .7 2 8 .0 S o ft e n in g

U lt ra m a x 2 6 .0 5 2 6 .6 2 6 .9 3 S o ft e n in g

H a n d y s iz e 2 2 .4 1 2 2 .6 2 2 .9 S o ft e n in g

T a n k e r

V L C C 9 4 .1 4 9 4 .3 9 4 .4 S o ft e n in g

S u e z m a x 6 0 .3 8 6 0 .4 6 0 .5 S o ft e n in g

L R 2 5 0 .9 2 5 1 .1 5 1 .2 F ir m in g

L R 1 4 0 .3 9 4 0 .3 4 0 .4 S t e a d y

M R 3 5 .1 2 3 5 .0 3 5 .1 S t e a d y

(U S $ / m t) A p r il to d a te M a rc h T re n d

R o tte rd a m IF O 3 8 0 2 9 7 .1 3 0 1 .4 S o fte n in g

R o tte rd a m M G O 5 2 0 .9 5 4 8 .3 S o fte n in g

S in g a p o re IF O 3 8 0 3 2 0 .7 3 2 9 .0 S o fte n in g

S in g a p o re M G O 5 4 0 .2 5 6 5 .8 S o fte n in g

5


Interest rates, currencies, PMI

Manufacturing PMI US/China/EU

US$ LIBOR Interest Rate - Maturity 3 Months

USD/CNY

Exchange Rates

Office Address

Oslo Lorentzen & Stemoco AS

Munkedamsveien 45, 0250 Oslo

P.O. Box 2029 Vika, 0125 Oslo

Norway

+47 2252 7700

Athens Lorentzen & Stemoco (Athens) Ltd

Leof. Karamanli 25 Voula 166 73

Athens,

Greece

+30 210 89 000 59

Singapore Lorentzen & Stemoco Singapore Pte Ltd.

8 Eu Tong Sen Street,

#21-98 Office 1 The Central

059818 Singapore

+65 6349 8400

Shanghai Lorentzen & Stemoco Shanghai Representative Office

Room 2701, Shanghai Central Plaza

381 Huai Hai Zhong Road, 200020 Shanghai

China

+86 21 6391 5880

New York Lorentzen & Stemoco AS (New York City)

8 East 41st St 8th Floor

New York, NY 10017

United States of America

+1(212) 684 2503

6

Reported transactions list - Wet


P r ic e U S $ m N a m e S iz e B u ilt Y a r d B u y e r S e lle r N o te s

1 8 .5 P u la 4 7 ,3 0 0 D W T 2 0 0 6 3 M a j B ro d o g ra d ilis te C h a m p io n T a n k e rs A S B o re a lis M a r it im e B B B - C h e m

2 3 F u tu re P ro s p e r ity 4 8 ,0 0 0 D W T 2 0 1 0 Iw a g i Z o s e n U n k n o w n F u k u jin K is e n

1 6 .2 F a o u e t 3 7 ,0 0 0 D W T 2 0 0 5 H y u n d a i M ip o T h e n a m a r is S o c a tra

4 4 H u ll 3 1 2 2 S u n g d o n g 7 4 ,5 0 0 D W T 2 0 1 6 S u n g d o n g N is s h in S h ip p in g S c o rp io B u lk e rs L R 1



A fr a m a x

1 2 .5 A t la n t ik 1 0 5 ,3 0 0 D W T 1 9 9 8 H a lla U n k n o w n V is ta S h ip p in g L R 2

3 3 .5 C lio 1 1 4 ,0 0 0 D W T 2 0 0 8 N e w T im e s T B M a r in e S e a a r la n d S h ip p in g * In c 2 y r T C 2 2 5 0 0 p / d to S h e ll

2 5 .5 C o s m ic Je w e l 3 0 1 ,0 0 0 D W T 1 9 9 7 M its u b is h i H I A g r it ra d e E a s te rn P a c if ic

S u e z m a x

P r o d u c t

V L C C

P a n a m a x

7

Reported transactions list - Dry


Disclaimer: The information contained within this report has been collected from a number of market sources and is given in good

faith without guarantee, for information purposes only. Lorentzen & Stemoco and its affiliates, directors and employees are not

liable or responsible for any consequences whatsoever occurring from errors or inaccuracy of the information contained within this

report.

P r ic e U S $ m N a m e S iz e B u ilt Y a r d B u y e r S e lle r

9 .2 In d ig o O c e a n 2 8 ,7 0 0 D W T 2 0 0 8 Im a b a r i D e v a l S h ip p in g S h o e i K is e n

2 2 .0 O n y x 1 3 7 ,0 0 0 D W T 2 0 1 5 S a ik i W is d o m M a r in e L in e s C o s e n a

4 .7 O r ie n te S k y 2 4 ,1 0 0 D W T 1 9 9 7 S a ik i U n k n o w n C h in e s e N Y K G lo b a l B u lk

3 .9 K o ts ik a s 2 7 ,4 0 0 D W T 1 9 9 6 H a n jin H e a v y In d H a to u n S h ip p in g T h a lk a t S h ip p in g

9 .0 Ja s m in e A c e 3 2 ,9 0 0 D W T 2 0 0 6 K a n d a N a rv a l S h ip p in g C o rp S a to S te a m s h i

3 .5 N a v is io n A llia n c e 2 8 ,5 0 0 D W T 1 9 9 5 K a n d a T a b a lo N a v is io n G ro u p

1 8 .5 S to n e s 2 8 ,1 0 0 D W T 2 0 0 1 S ie ta s N o rth A m e r ic a n H a rtm a n n H a n s H u rg e n

7 .5 T M S M a r ia 5 2 ,4 0 0 D W T 2 0 0 1 T s u n e is h i Z o s e n U n k n o w n V ic to r ia S te a m s h ip

4 .5 S e a R o s e 4 5 ,7 0 0 D W T 1 9 9 5 H a s h ih im a C h in e s e A th e n ia n S h ip m a n a g e m e n t

2 4 .5 S B I T h a lia 6 4 ,0 0 0 D W T 2 0 1 5 C h e n g x i G re e k S c o rp io B u lk e rs

3 .5 D o n F ra n e B u lic 4 2 ,6 0 0 D W T 1 9 9 7 B ro d o s p lit U n k n o w n G re e k Ja d ro p lo v

1 2 .3 N o b le H a w k 5 6 ,0 0 0 D W T 2 0 0 7 M its u i Ic h ih a ra B a ru D e lta M a r it im e N is s e n K a iu n

4 .8 K ite 4 7 ,2 0 0 D W T 1 9 9 7 D a e d o n g U n k n o w n E a g le B u lk S h ip p in g

4 .2 B la c k f in 4 3 ,2 0 0 D W T 1 9 9 5 H y u n d a i H e a v y In d U n k n o w n M id d le E a s te rn T r i B u lk S h ip p in g

2 4 .0 D o m in iq u e V e n tu re 6 3 ,5 0 0 D W T 2 0 1 5 C h e n g x i U n k n o w n G re e k W a h K w o n g S h ip p in g

4 .5 S e a la d y 4 2 ,2 0 0 D W T 1 9 9 5 O s h im a M u h ie d d in e S h ip p in g E a s te rn M e d ite r ra n e a n M a r it im e

6 .1 V a lo p o u la 4 5 ,6 0 0 D W T 2 0 0 0 T s u n e is h i C e b u S te e lS h ip s L L C P e tro f in S h ip M

1 7 .2 P ra b h u S h e r 8 1 ,3 0 0 D W T 2 0 1 1 H y u n d a i H e a v y In d U n k n o w n T o la n i S h ip p in g

6 .0 P o n to d a m o n 7 2 ,9 0 0 D W T 2 0 0 0 D a e d o n g U n k n o w n C h in e s e O c e a n F re ig h te rs L td

7 .0 S h iy o 7 7 ,5 0 0 D W T 2 0 0 1 S a s e b o U n k n o w n C h in e s e D a iw a K is e n

4 .5 A g io s E fra im 7 3 ,0 0 0 D W T 1 9 9 8 D a e d o n g U n k n o w n C h in e s e V ic to r ia S te a m s h ip

1 1 .5 C in z ia D 'A m a to 7 5 ,2 0 0 D W T 2 0 0 8 H u d o n g U n k n o w n C h in e s e P e rs e v e ra n z a d i N a v ig a z io n e

1 2 .5 D e w i L a k s m i 7 6 ,0 0 0 D W T 2 0 1 1 G u a n g z h o u S h ip y a rd In t U n k n o w n G ra n d B u lk S h ip p in g

1 7 .8 B lu e M a tte rh o rn 8 1 ,4 0 0 D W T 2 0 1 1 H y u n d a i S a m h o H e a v y In d A e o lo s M a n a g e m e n t B lu e M a r in e

1 7 .7 U n ity P r id e 8 1 ,4 0 0 D W T 2 0 1 1 H y u n d a i S a m h o H e a v y In d A e o lo s M a n a g e m e n t G o ld e n B r id g e

3 .5 G e ra s im o s 7 0 ,3 0 0 D W T 1 9 9 6 S u m ito m o U n k n o w n N o m ik o s E

1 7 .2 P ra b h u M o h in i 8 1 ,3 0 0 D W T 2 0 1 1 H y u n d a i H e a v y In d C h a rtw o r ld S h ip p in g T o la n i S h ip p in g

2 7 .0 S B I M e re n g u e 8 1 ,6 0 0 D W T 2 0 1 5 T s u n e is h i Z h o u s h a n W is d o m M a r in e L in e s S c o rp io B u lk e rs

8 .7 S e k iy o 9 1 ,4 0 0 D W T 1 9 9 8 H ita c h i U n k n o w n C h in e s e N Y K L in e

4 4 .0 S B I P e r fe c to 1 8 0 ,0 0 0 D W T 2 0 1 5 D a e w o o -M a n g a lia A n a n g e l M a r it im e S e rv ic e s S c o rp io B u lk e rs

4 4 .0 S B I P re s id e n te 1 8 0 ,0 0 0 D W T 2 0 1 6 D a e w o o -M a n g a lia A n a n g e l M a r it im e S e rv ic e s S c o rp io B u lk e rs

4 4 .0 S B I C h u rc h ill 1 8 0 ,0 0 0 D W T 2 0 1 5 D a e w o o -M a n g a lia A n a n g e l M a r it im e S e rv ic e s S c o rp io B u lk e rs

9 .3 O n o e 1 7 2 ,6 0 0 D W T 2 0 0 0 N K K N G M E n e rg y N Y K L in e

9 .3 C h ito s e 1 7 1 ,2 0 0 D W T 2 0 0 0 K o y o D o c k N G M E n e rg y N Y K L in e

C a p e s iz e

P a n a m a x -P o s t P M X

H a n d y m a x -S u p r a m a x

H a n d y

Documents

Monthly S&P Report - Lorentzen & Stemoco AS · steel chemical tankers of 38,000 dwt at compatriot ship-yard Kitanihon Zosen. The ves- sels are scheduled for delivery in 2018 from