Roads to Recovery: Comparing and ... - Marine Money€¦ · • MSI Forecast Marine eValuator (FMV) is the first web-based tool to provide forecast and historical price data covering

Roads to Recovery: Comparing and Contrasting the Outlook for Distressed Sectors Niklas Carlén – Maritime Strategies International (MSI) 18th Annual Marine Money Greek Ship Finance Forum – 11th October 2016

Introduction

Peak to Trough Comparision: Peak 2006-08 Levels Vs Q2 2016

© Maritime Strategies International www.msiltd.com 3

-100%

-90%

-80%

-70%

-60%

-50%

-40%

-30%

-20%

-10%

0%

Bulk

er

Gen

Car

go

Oil

Tank

er

Chem

Tan

ker

LNG

LPG

Cont

aine

r

Car C

arrie

r

RoRo

T/C Rate 5-Yr Old Price

Demand

Iron Ore: Chinese Imports Growing Despite Stagnant Steel


Chinese Steel Production Chinese Iron Ore Imports

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MnTRest of World IndiaS Africa BrazilAustralia

Forecast

-5%

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15%

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45%

-100

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MnT Steel Production Yoy% ChForecast

Coal: Indian Outlook Shrouded in Uncertainty


Chinese and Indian Coal Imports Coal Seaborne Trade

0

50

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350

2000

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MnT China IndiaForecast

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MnT Coking Coal Steam CoalForecast

Other Bulks: Short-Term Plateau, Medium-Term Growth


Grains+Soya Seaborne Trade Minor Bulks Seaborne Trade

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MnT Soyabean+Meal GrainsForecast

-15%

-10%

-5%

0%

5%

10%

15%

20%

2000

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2006

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YoY % Ch

TEU Trade and TEU Miles


Asia-Europe isn’t dominant in volume terms, but is in terms of capacity required

0.0

0.5

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2.5

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0

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Asi

a-Eu

rope

Tran

spac

ific

FE-M

E/IS

C

FE-L

at. A

m.

intr

a-A

sia

Mn TEU of shipping capacity

Mn TEU of trade

Trade volume

Shipping capacity required (RH Axis)

Container Demand: 2016 Volume Weakness


North-South trades have been the worst affected, but trade disappointing across the board

-8%

-6%

-4%

-2%

0%

2%

4%

6%

Asi

a-Eu

rope

Tran

spac

ific

Tran

satla

ntic

intr

a-A

sia

intr

a-Eu

rope

Asi

a-La

tin A

mer

ica

Asi

a-M

iddl

e Ea

st/IS

C

Euro

pe-L

atin

Am

eric

a

Oth

er

2016 growth

Trade Growth is Key to Cascading


• The cascade has currently broken down – four reasons: Low fuel price Slow trade growth Service fragmentation Alliance reshuffle

• In our view, trade growth is the most

important of these; lines upsized in anticipation of trade growth, when that disappointed then swiftly downsized.

• Huge supply of spot ships puts lines under no pressure to secure tonnage – can keep flexibility (2-12 month fixtures).

Non-Mainlane East/West Trade

0%

1%

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5%

6%

7%

8%

9%

0

100

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Dec-13 Dec 14 Dec 15 Aug 16

Headhaul E/W Trade YoY % Ch

Vessel Deployment, k TEU

0.1-2.9k TEU 2.9-5.2k TEU5.2-7.6k TEU 7.6-12k TEU12k TEU+ Demand (RH Axis)

Container Cascade


Evolution of Asia-Europe Deployment Intra-Asian Deployment

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2001

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Mn TEU

12k + TEU 7.6-12k TEU 5.2-7.6k TEU3.9-5.2k TEU 2.9-3.9k TEU 1.3-2.9k TEU

0.0

0.5

1.0

1.5

2.0

2.5

End2011

End2012

End2013

End2014

End2015

Aug2016

Mn TEU7.6-12k TEU 5.2-7.6k TEU 3.9-5.2k TEU2.9-3.9k TEU 1.3-2.9k TEU 0.1-1.3k TEU

Seaborne Growth Prospects Compared: Dry Bulk Vs Container Trade


0%

2%

4%

6%

8%

10%

12%

1991-95 1996-00 2001-05 2006-10 2011-15 2016-20

YoY % Ch Container Dry Bulk

Average Annual Trade Growth Over 5-Year Periods (CAGR)

Supply

Current Orderbook: Sectors Over-Exposed


Required Ships* Vs Orderbook YTD Capacity Adjustment

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600

Bulker Container

# of Vessels

Ships RequiredShips on order

*Required ships to meet incremental demand, irrespective of current over-capacity

-15

-10

-5

0

5

10

Bulker Container

Mn GT

Contracting Scrapping

Old Tonnage versus Orderbook


Bulk Carriers Containerships

0.0

0.5

1.0

1.5

2.0

2.5

0.1-2.9kTEU

2.9-5.2kTEU

5.2-7.6kTEU

7.6-12kTEU

12k+TEU

Mn TEU

Over 15 Years Orderbook

0

5

10

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45

50

10-40k Dwt 40-65k Dwt 65-120k Dwt 120k+ Dwt

Mn Dwt

Over 15 Years Orderbook

© Maritime Strategies International www.msiltd.com

Help from Unusual Places?

Imminent Significant (3rd+) Special Surveys


Bulk Carriers Containerships

0%

1%

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5%

6%

0

10

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2017 2018 2019

Mn Dwt

6th+5th4th3rd% of current fleet (RH Axis)

0%

1%

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4%

5%

6%

7%

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

2017 2018 2019

Mn TEU6th+5th4th3rd% of current fleet (RH Axis)

0%

2%

4%

6%

8%

10%

12%

14%

1991-95 1996-00 2001-05 2006-10 2011-15 2016-20

YoY % Ch Container Dry Bulk

Fleet Growth Compared: Dry Bulk Vs Container Trade


Average Annual Fleet Growth Over 5-Year Periods (CAGR)

Roads to Recovery

Roads to Recovery: Weighted Average Timecharter Indices Compared


0

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18020

15

2016

2017

2018

2019

2020

T/C Index (2015=100)

Bulker Container

MSI - FMV


• MSI Forecast Marine eValuator (FMV) is the first web-based tool to provide forecast and historical price data covering virtually all of the deepsea shipping fleet.

• Data includes forecasts of newbuilding, second-hand prices, 1 year timecharter rates and operating costs for specific vessels.

• MSI FMV draws on MSI’s proven, proprietary models and a consistent cross-sectional view across all principal shipping sectors. It puts asset values in the context of the near term market to enable reliable benchmarking with outputs based on annual averages.

• Coverage: Crude Oil Tanker

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Chemical Tanker

LPG Carrier

LNG Carrier

Multi Purpose

Containership

PCC/PCTC

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http://www.msiltd.com/fmv

FMV Output


Quarterly Fair Market Value & 1 Year Time Charter Rate (1Q history, current Q, 2Q forecast

Annual average: • Newbuilding contract price • Fair Market Value • 1 Year Time Charter Rate • Operating Cost 5 years history and 15 years forecast

Price Development Chart detailing forecast price development in relation to historical metrics

www.msiltd.com/fmv

http://www.msiltd.com/fmv

© Maritime Strategies International www.msiltd.com

Asset Play Prognosis Buy 5 year old today – sell in 5 years time

23

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Roads to Recovery: Comparing and ... - Marine Money€¦ · • MSI Forecast Marine eValuator (FMV) is the first web-based tool to provide forecast and historical price data covering