Ralph Leszczynski

banchero costa (shipbrokers)

MAREFORUM MARITIME ITALY 2009


Tanker Shipping Market Outlook

- Where we go next? -

Ralph Leszczynski

11 May 2009, Sorrento (Italy)

banchero costa researchwww.bancosta.it - [email protected]

banchero costa (shipbrokers)banchero costa (shipbrokers)

Legal notice: The information and data contained in this presentation is derived from avariety of sources, own and third party’s, public and private, and is provided for informationpurposes only.

Whilst banchero costa has used reasonable efforts to include accurate and up-to-dateinformation in this presentation, banchero costa makes no warranties or representations as tothe accuracy of any information contained herein or accuracy or reasonableness ofthe accuracy of any information contained herein or accuracy or reasonableness ofconclusions drawn there from.

Although some forward-looking statements are made in the report, banchero costa cannot inany way guarantee their accuracy or reasonablenessany way guarantee their accuracy or reasonableness.

banchero costa assumes no liabilities or responsibility for any errors or omissions in thecontent of this report.


The Market


h ‘ ’ k h d i dh ‘ ’ k h d i dthe ‘wet’ market has dried up…the ‘wet’ market has dried up…


The Baltic Dirty & Clean Tanker Indices (BDTI and BCTI)


The Baltic Dirty & Clean Tanker Indices (BDTI and BCTI)(index points, from The Baltic Exchange)

2000

2500

1500

2000

ndex

500

1000

in

005/2008 07/2008 09/2008 11/2008 01/2009 03/2009 05/2009

Baltic Dirty Tanker Index Baltic Clean Tanker Index


The Baltic Dirty & Clean Tanker Indices (BDTI and BCTI)The Baltic Dirty & Clean Tanker Indices (BDTI and BCTI)(index points, from The Baltic Exchange)

3000

3500

2000

2500

ndex

500

1000

1500

in

0

500

05/1999 05/2000 05/2001 05/2002 05/2003 05/2004 05/2005 05/2006 05/2007 05/2008 05/2009

Baltic Dirty Tanker Index Baltic Clean Tanker Index


The Baltic Dry and Tanker Indices (BDI, BDTI & BCTI)


The Baltic Dry and Tanker Indices (BDI, BDTI & BCTI)(index points, from The Baltic Exchange)

10000

11000

12000

6000

7000

8000

9000

ndex

2000

3000

4000

5000

i

0

1000

05/1999 05/2000 05/2001 05/2002 05/2003 05/2004 05/2005 05/2006 05/2007 05/2008 05/2009

Baltic Dry Index Baltic Dirty Tanker Index Baltic Clean Tanker Index


Crude Oil Price v. Baltic Dirty Tanker Index


y(timeseries of monthly averages, in usd/bbl and index points)

120

140

3000

3500

80

100

usd/

bbl 2000

2500

20

40

60

u

500

1000

1500

0

20

04/1999 04/2000 04/2001 04/2002 04/2003 04/2004 04/2005 04/2006 04/2007 04/2008 04/20090

500

Brent Crude Oil Price Baltic Dirty Tanker IndexBrent Crude Oil Price Baltic Dirty Tanker Index


Crude Oil Price v. Baltic Clean Tanker Index


Crude Oil Price v. Baltic Clean Tanker Index(timeseries of monthly averages, in usd/bbl and index points)

120

140

1800

2000

80

100

usd/

bbl 1200

1400

1600

20

40

60

u

600

800

1000

0

20

04/1999 04/2000 04/2001 04/2002 04/2003 04/2004 04/2005 04/2006 04/2007 04/2008 04/2009200

400

Brent Crude Oil Price Baltic Clean Tanker IndexBrent Crude Oil Price Baltic Clean Tanker Index


Crude Oil Price v. Baltic Dirty Tanker Index - 1999-2005


Crude Oil Price v. Baltic Dirty Tanker Index 1999 2005 (scatterplot of monthly averages, in usd/bbl and index points)

2500

3000

2000

2500

TI I

ndex

y = 47.839x - 42.066R2 = 0.437

1000

1500BD

T

5000 10 20 30 40 50 60 70 80 90

Brent Crude Oil Price USD/bbl


Crude Oil Price v. Baltic Dirty Tanker Index - 1999-2008


Crude Oil Price v. Baltic Dirty Tanker Index 1999 2008 (scatterplot of monthly averages, in usd/bbl and index points)

2500

3000

2000

2500

TI I

ndex

y = 5.331x + 1061.2R2 = 0.0936

1000

1500BD

T

5000 20 40 60 80 100 120 140 160

Brent Crude Oil Price USD/bbl


VLCC Tanker (200k+ dwt) Newbuilding / 5YO SH Prices


( ) g(basis modern 300k dwt, estimated monthly avg, in USD mln)

140

160

180

80

100

120

140

usd

mln

20

40

60

80u

0

20

03/2000 03/2001 03/2002 03/2003 03/2004 03/2005 03/2006 03/2007 03/2008 03/2009

Newbuilding Price 5 Year Old Second Hand Price


Aframax Tanker (80-120k dwt) Newbuilding/ 5YO SH Prices


Aframax Tanker (80 120k dwt) Newbuilding/ 5YO SH Prices(basis modern 105k dwt, estimated monthly avg, in USD mln)

80

90

40

50

60

70

usd

mln

10

20

30

40u

0

10

03/2000 03/2001 03/2002 03/2003 03/2004 03/2005 03/2006 03/2007 03/2008 03/2009



MR2 Tanker (40-60k dwt) Newbuilding/ 5YO SH Prices


MR2 Tanker (40 60k dwt) Newbuilding/ 5YO SH Prices(basis modern 47k dwt, estimated monthly avg, in USD mln)

50

60

30

40

usd

mln

10

20

u

003/2000 03/2001 03/2002 03/2003 03/2004 03/2005 03/2006 03/2007 03/2008 03/2009



The Fleet


VLCC Tanker (200,000-350,000 dwt) Age Profile


80

100

60

mbe

r of v

esse

ls

20

40

num

0

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

Scrapped Trading (SS) Trading (DS+DB) Trading (DH) NewbuildingJ 2009 Scrapped Trading (SS) Trading (DS+DB) Trading (DH) NewbuildingJanuary 2009


VLCC Tanker (200,000-350,000 dwt) Orderbook/Trading


VLCC Tanker (200,000 350,000 dwt) Age Profile Pie

30 yrs + (< 79) t 5 (blt 04 09)26 30 yrs (79 83)

Orderbook/Trading40%

16-20 yrs (89-93)19%

21-25 yrs (84-88)4%

30 yrs + (< 79)6%

up to 5 yrs (blt 04-09)25%

26-30 yrs (79-83)2%

11-15 yrs (94-98)15%

6-10 yrs (99-03)29%

updated: January 2009


Suezmax Tanker (120,000-199,999 dwt) Age Profile


60

70

80

40

50

60

mbe

r of v

esse

ls

10

20

30num

0

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

Scrapped or lost Trading (SS) Trading (DS+DB) Trading (DH) NewbuildingJ 2009 Scrapped or lost Trading (SS) Trading (DS+DB) Trading (DH) NewbuildingJanuary 2009


Suezmax Tanker (120,000-199,999 dwt) Orderbook/Trading


( , , ) Age Profile Pie

26-30 yrs (79-83) 30 yrs + (< 79)2%21-25 yrs (84-88)


1% up to 5 yrs (blt 04-09)32%

2%21-25 yrs (84-88)4%

16-20 yrs (89-93)17%

6-10 yrs (99-03)28%

11-15 yrs (94-98)16%

28%Updated: January 2009


Aframax Tanker (78,000-119,999 dwt) Age Profile


100

120

60

80

mbe

r of v

esse

ls

20

40

num

0

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

Demo Trading (SS) Trading (DS+DB) Trading (DH) NewbuildingJ 2009 Demo Trading (SS) Trading (DS+DB) Trading (DH) NewbuildingJanuary 2009


Aframax Tanker (78,000-119,999 dwt) Orderbook/Trading


Aframax Tanker (78,000 119,999 dwt) Age Profile Pie

26-30 yrs (79-83) 30 yrs + (< 79)0%


3% up to 5 yrs (blt 04-09)34%

0%21-25 yrs (84-88)9%

16-20 yrs (89-93)16%

6-10 yrs (99-03)25%

11-15 yrs (94-98)13%



Aframax Tanker Trading (78,000-119,999 dwt)


g ( , , )

Product Carrier16%16%

C d C iCrude Carrier84%



Aframax Tanker Orderbook (78,000-119,999 dwt)


( , , )

Product Carrier38%

Crude Carrier62%

d d J 2009updated: January 2009


MR2 Tanker (42,000-59,999 dwt) Age Profile


180

210

240

120

150

180

mbe

r of v

esse

ls

30

60

90num

0

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

Scrapped Trading (SS) Trading (DS+DB) Trading (DH) NewbuildingJanuary 2009 Scrapped Trading (SS) Trading (DS+DB) Trading (DH) NewbuildingJanuary 2009


MR2 Tanker (42,000-59,999 dwt) Orderbook/Trading


a e (42,000 59,999 dwt) Age Profile Pie

26-30 yrs (79-83)2% up to 5 yrs (blt 04-09)

57%

30 yrs + (< 79)0%

21-25 yrs (84-88)6%


57%16-20 yrs (89-93)

5%

11-15 yrs (94-98)10%

6-10 yrs (99-03)20%



VLCC (200-350,000 dwt) Fleet Growth assuming Current Orderbook and Reasonable Demolition


In terms of Number of Units

"Low Demolition" Scenario VLCC (number) 2008 2009 2010 2011 2012 Total( )Deliveries 60 68 90 19 237Demolitions 11 11 11 11 44Net Increase 49 57 79 8 193Total Fleet 590 639 696 775 783

All units which are currently over 25 Years Old are scrapped before

Y-o-Y Growth 8.3% 8.9% 11.4% 1.0%

"High Demolition" Scenario VLCC (number) 2008 2009 2010 2011 2012 TotalDeliveries 60 68 90 19 237

2012

Demolitions 18 18 18 18 72Net Increase 42 50 72 1 165Total Fleet 590 632 682 754 755Y-o-Y Growth 7.1% 7.9% 10.6% 0.1%

All units which are currently over 20 Years Old are scrapped before 2012


Suezmax (120-200,000 dwt) Fleet Growth assuming Current Orderbook and Reasonable Demolition



"Low Demolition" Scenario Suezmax (number) 2008 2009 2010 2011 2012 Total( )Deliveries 67 47 49 13 176Demolitions 3 3 3 3 12Net Increase 64 44 46 10 164Total Fleet 366 430 474 520 530


Y-o-Y Growth 17.5% 10.2% 9.7% 1.9%

"High Demolition" Scenario Suezmax (number) 2008 2009 2010 2011 2012 TotalDeliveries 67 47 49 13 176

2012




Aframax (78-120,000 dwt) Fleet Growth assuming Current Orderbook and Reasonable Demolition



"Low Demolition" Scenario Aframax (number) 2008 2009 2010 2011 2012 Total( )Deliveries 89 90 42 3 224Demolitions 8 8 8 8 32Net Increase 81 82 34 -5 192Total Fleet 856 937 1019 1053 1048


Y-o-Y Growth 9.5% 8.8% 3.3% -0.5%

"High Demolition" Scenario Aframax (number) 2008 2009 2010 2011 2012 TotalDeliveries 89 90 42 3 224

2012

Demolitions 28 28 28 28 112Net Increase 61 62 14 -25 112Total Fleet 856 917 979 993 968Y-o-Y Growth 7.1% 6.8% 1.4% -2.5%



MR2 (42-60,000 dwt) Fleet Growth assuming Current Orderbook and Reasonable Demolition



"Low Demolition" Scenario MR2 (number) 2008 2009 2010 2011 2012 Total( )Deliveries 205 150 85 18 458Demolitions 5 5 5 5 20Net Increase 200 145 80 13 438Total Fleet 781 981 1126 1206 1219


Y-o-Y Growth 25.6% 14.8% 7.1% 1.1%

"High Demolition" Scenario MR2 (number) 2008 2009 2010 2011 2012 TotalDeliveries 205 150 85 18 458

2012




Demand


World Seaborne Crude Oil Trade


(estimates, in thousand barrels per day)

40000

45000

50000

25000

30000

35000

40000

ds b

arre

ls d

aily

7.1% 7.8% 6.4% 3.0% 2.4% 2.6% 1.0%5000

10000

15000

20000

Tho

usan

d

-3.8% -3.3%

0

5000

2000 2001 2002 2003 2004 2005 2006 2007 2008

Crude Oil Trade Y-o-Y Growth


World Seaborne Petroleum Products Trade


(estimates, in thousand barrels per day)

16000

18000

8000

10000

12000

14000

ds b

arre

ls d

aily

6.2% 5.6% 0 9% 6.1% 8.2% 8.3% 7.0% 3 3% 1 3%2000

4000

6000

8000

Tho

usan

d

5.6% 0.9% 3.3% 1.3%

0

2000

2000 2001 2002 2003 2004 2005 2006 2007 2008

Product Trade Y-o-Y Growth


CHINACHINA //中国中国CHINA CHINA //中国中国


World's Top 10 Seaborne Oil Importers in 2008p p(estimates)

7,000

8,000

4 000

5,000

6,000

barr

els d

aily

2,000

3,000

4,000

Tho

usan

d

0

1,000

USA Japan China Korea India Italy France Germany Canada Singapore


Share of World Seaborne Oil Imports in 2008Share of World Seaborne Oil Imports in 2008(estimates)

USA20%

Others16% 20%

Other Asia7%

India5%

Korea6% China

8% Japan10%

EU28%


Seaborne Imports of Iron Ore by Country in 2008


Seaborne Imports of Iron Ore by Country in 2008(estimate, all bulkcarriers, as % of volumes in tonnes)

Middle East3%

Others3%3%Western Europe

17%

Japan19% China

58%


China - Refinery Capacity and Product Demand C a e e y Capac ty a d oduct e a d(estimates)

7 000

8,000

9,000

4 000

5,000

6,000

7,000

nd b

arre

ls d

aily

1,000

2,000

3,000

4,000

Tho

usan

0

1,000

1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Refinery Capacity Product Demand


China - Crude Oil Production and Consumption


p(estimates, in mln tonnes)

350

400

tonn

es

200

250

300

cons

umpt

ion

in m

ln

50

100

150

oil p

rodu

ctio

n an

d c

0

50

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008(f)

Chi

nese

Consumption Production


China - Comparison of Iron Ore and Crude Oil Imports


(customs data, in million tonnes gross)

400

500

300

400

nnes

per

yea

r

100

200

mln

ton

02001 2002 2003 2004 2005 2006 2007 2008(f)

Iron Ore Imports Crude Oil Importsp p


China - Seaborne Crude Oil ImportsChina Seaborne Crude Oil Imports (customs data, in million tonnes gross)

160

180

200

100

120

140

160

on to

nnes

+35%

+3%

+14% +12% +10%+7%

+31%

40

60

80mill

io

-8%

0

20

2001 2002 2003 2004 2005 2006 2007 2008(f)

Crude Oil Imports Y-o-Y Growthp


Number of Vehicles per 1000 People over 16 y.o.


p p y(source: abc news)

USA, 1023

1,200y.

o.

France, 702Japan, 608

900

0 pe

ople

ove

r 16

y

300

600

of c

ars e

very

100

0

India , 11 China, 90

no. o


C i i ? Wh C i i ?C i i ? Wh C i i ?Crisis? What Crisis?Crisis? What Crisis?


• The obsession with GDP – going for the magic ‘8’

• China’s credit and fiscal situation is better than most countries

• Total official government debt is approx 20% of GDP

• Required reserves at banks are high (15%)Required reserves at banks are high (15%)

• Property sector cooled down and now being reheated again

• Power generation -9.6% YoY in Nov 08, in March back to -0.7% YoY


• Fixed Asset Investments up 30% YoY in March, up 4.2 ppts from 1Q08

• Retail consumption up 16% YoY in March, up from 15.7% in jan-feb 09Retail consumption up 16% YoY in March, up from 15.7% in jan feb 09

• Real income growth 11.2% urban & 8.6% rural in 1Q09

• Air passenger traffic up 17% YoY in March

• Car sales up 8% YoY in March (small cars 22%)• Car sales up 8% YoY in March (small cars 22%)


Back to Planet Earth…


Aframax Tanker (78,000-119,999 dwt) Age Profile


100

120

60

80

mbe

r of v

esse

ls

20

40

num

0

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

Demo Trading (SS) Trading (DS+DB) Trading (DH) NewbuildingJ 2009 Demo Trading (SS) Trading (DS+DB) Trading (DH) NewbuildingJanuary 2009


MR2 Tanker (42,000-59,999 dwt) Age Profile


180

210

240

120

150

180

mbe

r of v

esse

ls

30

60

90num

0

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

Scrapped Trading (SS) Trading (DS+DB) Trading (DH) NewbuildingJanuary 2009 Scrapped Trading (SS) Trading (DS+DB) Trading (DH) NewbuildingJanuary 2009

banchero costabanchero costa

head office - genoa via pammatone, 2 16121 genoa (italy)

phone: + 39.010.5631 - 1 p

dry c. - cape/pmx 5631-200 [email protected] derivatives 5631-251 [email protected]

dry c. - handy 5631-200 [email protected] research 5631-558 [email protected]

dry c. - operating 5631-200 [email protected] lng projects 5631-554 [email protected]

tankers 5631-300 [email protected] agency 5631-600 [email protected]

containers 5631-515 [email protected] insurance 5631-700 [email protected]

s&p 5631-500 [email protected] p&i 5631-775 [email protected]

ship finance 5631-559 [email protected] accounting 5631-400 [email protected] p g

bancosta monaco bancosta geneva bancosta uk bancosta moscow monte carlo geneva london moscow

phone: +377.97.707.497 phone: +41.22.37.30.300 phone: +44.207.25.63.418 phone: +7.095.93.58.535

i f @b t i f @b t h i f @b t k ji te k @b t [email protected] [email protected] [email protected] [email protected]

bancosta oriente bancosta oriente bancosta oriente hong kong singapore beijing

phone: +852.28.651.535 phone: +65.63.27.67.82 phone: +86.10.84.53.49.93

[email protected] [email protected] [email protected]

Documents

Ralph Leszczynski