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Shipbuilding Forecast Club
Selected Highlights
Spring 2017
www.clarksons.com
About the Shipbuilding Forecast Club
March 2017
What are the aims?
• To provide market intelligence, forecasts, analysis, education and networking opportunities to companies selling into the
shipbuilding and shipping market to support their sales, marketing and strategic planning needs. The key deliverables are
a detailed market report presented at a six monthly seminar.
What is covered?
• Freight market review and outlook
• In depth newbuilding market analysis
• Newbuild contracting forecasts to 2026 by 66 segments; fleet growth forecasts to 2029
• Equipment and financing requirement forecasts to 2027
• Trade forecasts and regional trading patterns
• Ownership trends and forecasts
• Environmental & regulatory review
Who should attend?
• Any entity selling and marketing into the shipbuilding and shipping market, be that yard space, marine equipment, class
or flag services, aftersales support, insurance or finance. Any company needing to understand the shipping and
shipbuilding markets, the latest major themes and trends and their outlook to 2026.
Next seminar 27th September 2017. See page 26 for more details on the Club.
If you are interested
in attending the
Shipbuilding and
Shipping Forecast
Club, please
contact Clarksons
Research (see page
26 for details).
2
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Under “Picture Colour”, make
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Spring 2017 Seminar Highlights
Please note that these highlights are provided for
illustrative purposes only and some information has
been redacted.
www.clarksons.com
1. Bottom of market cycle. Possibly some of the toughest years in 2016 since financial crisis for shipping
but now some building blocks for the future. Oversupply after ordering in 2010 and 2013 but some
improvements in bulker markets and very strong investor interest, tankers OK in 2016 but now easing
back. Huge pressures built up container market across 2016 but perhaps past bottom on freight, major
stress across offshore driven by oil price collapse. Better markets in some niches (Cruise, Ferrry, Ro Ro).
2. Trade Growth. Still Growth potential in Seaborne Trade but Offshore requirements weak in short term.
Trade impacted by Chinese economy and policy (one belt, one road). But still 85% of trade by sea and
still long term growth potential despite range of scenarios. Offshore driven by different fundamentals and
structurally longer to recover.
3. Fleet Growth Slowing. But still 50% bigger than after financial crisis so larger market for service sector.
Deliveries declining in 2017 and an accelerated decline in 2018 and 2019 expected. Lower fleet growth in
2017 and in medium term and consolidation of client base expected.
4. Shipyard Orders Drought. Shipyard ordering very weak in 2016 and pressures building for further
consolidation and capacity reductions. “Non-delivery” of orderbook continues. Weakest ordering since
1980s in 2016 – continued weakness in 2017 anticipated with focus on small and niche (passenger not
offshore). Some speculative investment now expected in 2017 however.
5. Major change in financial landscape including regulation and banks exiting shipping.
6. Environment & Technology Change. Regulation accelerating and creating demand for solutions.
Technology and innovation opportunities with e-commerce, data, IT and satellite communication to ships
to support productivity and regulation.
Key Takeaways
4 March 2017
www.clarksons.com
Shipping Since the Financial Crisis
US$’000/day
Note: OPEX Index basis Moore Stephens’ published statistics, weighted using ClarkSea assumptions.
Annual
Average ClarkSea Index
(US$/day)
OPEX Index
(US$/day)
2008 32,659 6,823
2009 11,331 6,597
2010 15,480 6,789
2011 12,314 6,931
2012 9,577 6,722
2013 10,263 6,672
2014 11,743 6,627
2015 14,410 6,397
2016 9,441 6,394
2017* 9,675 6,412
The ClarkSea Index, 2008-Present
March 2017
0
5
10
15
20
25
30
35
40
45
50
Ja
n-0
8
Ju
n-0
8
No
v-0
8
Ap
r-0
9
Sep
-09
Feb
-10
Ju
l-1
0
De
c-1
0
Ma
y-1
1
Oct-
11
Ma
r-12
Au
g-1
2
Ja
n-1
3
Ju
n-1
3
No
v-1
3
Ap
r-1
4
Sep
-14
Feb
-15
Ju
l-1
5
De
c-1
5
Ma
y-1
6
Oct-
16
17th March 2017
US$10,701/day
2017* = year to date
Data provided as part of
Shipbuilding Forecast
Club
5
www.clarksons.com
-100% -80% -60% -40% -20% 0% 20% 40% 60%
ClarkSea Index
VLCC
Suezmax
Aframax
Clean Products (MR)
SS Chem Tanker 20k dwt
Capesize
Panamax
Handymax
Handy
Container 6,800 teu
Container 4,500 teu
PCC 6,500 ceu
Ro-Ro 3,500 lm
LPG
LNG
Offshore - Jackups
Offshore - Floaters
Offshore - PSV
% deviation from 2009 - 2017 average
This chart shows average earnings for
each ship type, compared to the average
earnings since January 2009
Tanker markets coming
off after great 2015 and
OK 2016
Containership rates
improving but still in
the doldrums, PCC
weak, Ro Ro firm
Offshore sector
very weak
Bulkcarrier rates showing
some improvement & lots
of investor interest
Cycle Position: March 2017
LPG and LNG
sectors weak
ClarkSea Index
relatively low
March 2017
Note: Current position based on March to date average.
6
www.clarksons.com
Monthly Newbuild Contracts by Number
0
100
200
300
400
500
600
700
800
900
1,000
Jan
-96
Ju
l-96
Jan
-97
Ju
l-97
Jan
-98
Ju
l-98
Jan
-99
Ju
l-99
Jan
-00
Ju
l-00
Jan
-01
Ju
l-01
Jan
-02
Ju
l-02
Jan
-03
Ju
l-03
Jan
-04
Ju
l-04
Jan
-05
Ju
l-05
Jan
-06
Ju
l-06
Jan
-07
Ju
l-07
Jan
-08
Ju
l-08
Jan
-09
Ju
l-09
Jan
-10
Ju
l-10
Jan
-11
Ju
l-11
Jan
-12
Ju
l-12
Jan
-13
Ju
l-13
Jan
-14
Ju
l-14
Jan
-15
Ju
l-15
Jan
-16
Ju
l-16
No. Vessels
May 2009:
23 contracts
Feb 1999:
18 orders
2016: Only 500 orders placed -
record low from “perfect storm” of all
major freight markets being weak,
over ordering in 2013 (private equity /
eco) and 2015 (Tier III), financing
conditions, yard pricing and very
weak sentiment. Oil price impacting
offshore.
Reported Shipbuilding Orders Per Month
March 2017 7
2016: Lowest
number since
1980s
www.clarksons.com
Bulkcarriers – Historically Low Ordering
March 2017
• Just 48 bulkcarriers were ordered last year.
• Contracts were generally backed by long-term charter, with very few
speculative orders.
• More ‘bespoke’ designs including 31 Valemax orders.
• Despite record low newbuild prices, lower resale values meant that
speculative activity was focussed on the secondhand market in 2016.
Sector Focus:
Capesize: 33 orders +14% y-o-y
Panamax: 2 orders -98% y-o-y
Handymax: 7 orders -94% y-o-y
Handysize: 6 orders -95% y-o-y
8
www.clarksons.com
Sector Focus – Cruise Ships
9 March 2017
www.clarksons.com
Cruise - Major Brands (60,000+ GT ships)
Fleet Orderbook New Orders
Group Brand No. Berths No. Berths 2016 2017 (f) 2018 (f)
Carnival 25 65,944 2 8,154
16 42,648 3 10,680 2
12 35,524 4 18,400 2
11 19,818 1 2,650
8 18,458 3 13,286
Other 13 28,943 1
Royal Caribbean (includes joint venture
with TUI)
23 70,388
9 22,326 2 5,800
5 11,376 3 8,288
Other 3 10,082 3 13,760
Norwegian 14 38,610 7 25,800
2 2,502
MSC 12 30,125 6 29,480 2
Disney 4 8,508 2 5,000 2
Genting 1 1,964 2 10,000 2
1 1,070 1 1,000 1
1 3,364 1 3,364
All Other 2 3,618 3 8,400 3
Total 162 415,268 43 164,062 15
March 2017 10
More detailed
projections
provided as part
of Shipbuilding
Forecast Club
www.clarksons.com
Historical Shipbuilding Shares (GT)
USA
Japan
Korea
China
Europe
Japan
Korea
China
Other Countries
% Global Deliveries
US
March 2017 11
www.clarksons.com
Clarksons Newbuilding Price Index
March 2017 12
Guide Newbuilding Prices*
VLCC: $81m
18.5k TEU boxship: $145.0m
174k m3 LNG unit: $193m
Capesize: $42m
*as of 01/03/2017
www.clarksons.com
Focus - Rest of the World Ordering
March 2017 13
Vietnam: 17 orders of 0.2m CGT
•3 x 50,000 dwt handy products tankers
•3 x 6,500 dwt chemical tankers
•2 x MPP
•2 x passenger ferries
•7 x transport (heavy lift)
Total ‘Other World’ Orders = 44 ships of 0.61m CGT
Azerbaijan: 4 orders
•2 x Ro-Ro
•2 x 8,000 dwt chemical tankers
USA: 5 orders
•3 x AHTS
•2 x 3,500 TEU containerships
Taiwan: 4 orders
•4 x feeder boxships at CSBC
Philippines: 2 orders
•2 x 115,000 Aframax crude
tankers
Indonesia: 2 orders
•2 x 6,500 dwt product tankers
Australia: 2 orders
•2 x passenger ferries
Bangladesh: 1 order
•1 x 581 cu.m. LPG carrier
India: 4 orders
•4 x passenger ferries
(2 x 1,200 pax, 2 x 500 pax)
Brazil: 2 orders
•2 x 16,316 HP AHTS
Chile: 1 order
•1 x 210 berth cruise ship
www.clarksons.com
Major Owner Clusters
Note: Based on Beneficial Owner, excludes unknown owners, company size based on overall world fleet including small ships (< 2,000 DWT/GT). Above covers
40,000 ships of 1.2 bn dwt.
14 March 2017
Consolidation Potential
Vessels > 2,000 DWT/GT: Consolidation Potential?
Company Size No.
Companies
% Fleet
(No. Vessels)
% Fleet
(GT)
Ships per
Company
Very Small (1-5)
Small (6-10)
Medium (11-20)
Large (21-50)
Very Large (51-100)
XXL (100+)
Total
• x% of tonnage owned by public listed companies (includes oil
companies & cargo interest).
• x% owned by private. Hamburg 4th largest shipping cluster
globally.
0
20
40
60
80
100
120
140
160
180
200
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
m GT
China
Greece
Japan
Germany
United States
*Start of Year
Detailed breakdown
of ownership
statistics provided as
part of Shipbuilding
Forecast Club
www.clarksons.com
0 50 100 150 200
Mumbai
Kuala…
Antwerp
Istanbul
New York
Geneva
Monte Carlo
Oslo
Taipei
Copenhagen
Hamilton
London
Shanghai
Imabari
Seoul
Hong Kong
Hamburg
Singapore
Tokyo
Athens
15
Top Owner Zones
• Owners based in the top 10 ‘owner zones’
account for a combined fleet of 646m GT,
representing 52% of the total fleet.
• Owners based in the top 20 ‘owner zones’
control 823m GT, accounting for two thirds of world
capacity.
• Athens is by far the largest ‘owner zone’, with
companies based here controlling a combined fleet
of xm GT.
• The second largest zone is Tokyo (xm GT)
followed by Singapore (xm GT) and Hamburg (xm
GT).
Owner Zones are defined as areas of a 40km radius around major shipping
cities. All zones have a cumulative fleet of over 1 million GT. Data is based
on the recorded location of the ‘beneficial owner’, defined as the ship
owning company with the main commercial responsibility for the ship.
Top 20 Owner Zones (million GT)
March 2017
Sector by sector
analysis of
shipowning
clusters around
the world
www.clarksons.com
Significant change in financial landscape
1. Significantly fewer European ship finance
banks. No KG today.
2. Increasing regulation
3. More conservative terms
4. More export credit and leasing (especially
China)
5. Private equity investment 2012-2014 but
not now
6. Capital markets “window” largely closed in
2015 and 2016
7. Market stress and restructuring including for
recent loans and offshore
8. Weak financing activity in 2016 to date
9. 1 yr TC on balance sheet
Source: Clarksons, Marine Money, Petrofin, Industry Sources
0 2 4 6 8 10 12
China Development Bank
SMBC
RBS
EksportKreditt
HSBC
Deutsche Bank
Bremer Landesbank
Danske Bank
Commerzbank (ex-DSB)
Danish Ship Finance
ING Bank
Standard Chartered
Bank of America ML
SEB
DBS Bank
HSH Nordbank AöR
KDB
Unicredit
Swedbank
SocGen CIB
Santander
JBIC
CIT Group
Commonwealth Bank of Australia
Piraeus Bank
The National Bank of Greece
Alpha Bank
CIC
Helaba
DekaBank
Portfolio Size July 2016 ($bn)
16 March 2017
Shipbuilding
Forecast Club
includes
investment
forecast up to
2027
www.clarksons.com
Seaborne Trade: Long-Term Scenarios
17 March 2017
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
19
83
19
85
19
87
19
89
19
91
19
93
19
95
19
97
19
99
20
01
20
03
20
05
20
07
20
09
20
11
20
13
20
15
20
17
20
19
20
21
20
23
20
25
20
27
20
29
Base Case
Low Case
High Case
Long-Term Seaborne Trade Scenarios
mt
Multiple trade
scenarios modelled
as part of
Shipbuilding
Forecast Club
International Transport Forum Transport
Outlook 2017 (OECD/ITF): Sea freight transport
demand growth 2015-30 - 3.4% per annum
Source: Clarksons Research
www.clarksons.com
Environmental Regulation Timeline
Date
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
Baltic Sea ECA in effect
ECA
North Sea ECA in effect Global NOx Tier I Limit NOx
1.0% ECA Sulphur Limit
SOx
EEDI for newbuildings formally adopted
Global NOx Tier II Limit
3.5% global sulphur limit
North American ECA entered into force
EEDI
EEDI & SEEMP Mandatory (Phase 0)
Ratification of Ballast Water Management Convention
Ballast Water Convention
US Caribbean ECA enters into force
Ballast Water Convention enters into force
Lower EEDI reference line (Phase 1)
0.1% ECA Sulphur limit
ECA NOx Tier III emission limit takes effect*
Potential entry into force of Hong Kong Convention
Hong Kong Convention
Lower EEDI reference line (Phase 2) 0.5% global sulphur limit
Lower EEDI reference line (Phase 3)
Key
*At the MEPC 66 it was decided that, as of 1st September 2015, Tier III limits within
future ECAs will only apply to ships built after the date of adoption of the ECA, or a
later date as may be specified in the amendment designating the NOx Tier III ECA.
EU Monitoring, Reporting & Verification
MRV
18
MRV becomes mandatory in EU ports
MRV certification comes into force
North Sea & Baltic Sea to be adopted as NOx ECAs
March 2017
www.clarksons.com
Update: BWMC Retrofit Demand Scenario
• Not every vessel in the fleet will be retrofitted with a BWMS, retrofit demand depends on a number of
factors including market conditions, vessel type and age and trading patterns.
Scenario: How Many Vessels Need to be Retrofitted?
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
Global Fleet BWMSEquipped
DomesticTrading
ScrapPotential
ProjectedDemand
No. Ships
Shipbuilding Forecast Club
includes analysis of ballast
water retrofit demand, LNG
capable fleet scenarios and SOx
scrubber demand.
March 2017
Scenario Assumptions:
• Exclude BWMS equipped ships
(including allowances for late reporting)
• Exclude ‘domestic trading’ ships – proxy
for units operating in same ‘risk area’
• Exclude vessels of x+ years as the
economics do not support retrofit, these
ships are potential scrap candidates.
Lower age of x+ years in certain sectors.
19
www.clarksons.com
Contracting Forecast (Ship Nos)
• Number of contracts projected to remain
subdued in short-term, rising to x in 2020.
• Contracting remains below the historical
average throughout the forecast period,
significantly below the 2000-16 average
throughout the forecast period in terms of both
number of ships (on average down x%) and GT
(x%).
• Overall contracting forecast 2017-25 at an
average of x p.a. in number terms, down x%
compared to Autumn 2016.
• Product mix changing in long-term.
Long-Term Contracting 2000-26
Sh
ip n
os
0
1,000
2,000
3,000
4,000
5,000
6,000
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
Grand Total ContractingSmall Ships
History Forecast
March 2017 20
hist avg
Forecast broken
down by 66 shiptypes
and size sectors in
number, dwt, $.
Delivery and fleet
growth forecasts are
also available.
To change the photo, right-click
on the background and choose
“Format Background”. Click on
“Insert from File” and select the
grayscale JPG you want to use.
Under “Picture Colour”, make
Saturation 400% and choose
the dark blue from the Recolour
presets. You may have to
change the Brightness and
Contrast settings in Picture
Corrections tab to make the
text read more clearly.
More Information about the Club
www.clarksons.com
Shipbuilding & Shipping Forecast Club Membership
March 2017 22
• The Shipbuilding Forecast Club provides a tailored shipbuilding research service for
those who need more in-depth knowledge, analysis and forecasts about the
shipbuilding industry.
Aims: • Market Intelligence
• Analysis and Marketing
• Education
• Research
• Forecasts
• Networking
Membership Includes: • Regular market intelligence
• Regular market forecasts and monitoring
• Bi-annual seminars including intelligence,
education and networking
• Ad hoc support and telephone hotline
www.clarksons.com
Shipbuilding Forecast Club Membership
23
• Seminars twice a year
• Review of the newbuilding market
• Newbuilding Forecasts (2017-2026)
- Forecasts are generated for 66 ship
types and size-ranges
• Trends in key shipping segments
• Newbuilding broker expert panel
• Discussion and exchange of views
• Networking opportunities
March 2017
www.clarksons.com
Report Contents
24 March 2017
www.clarksons.com
Focus Sessions 2009-17
25
• Container Focus
• Development of Chinese
Shipbuilding
• Development of Chinese
Economy
• LNG Overview
• LNG Shipbuilding
• Offshore Focus
• Containerships with focus on
very large designs
• Cruise Industry
• New Entrants, Clusters and
Growth Companies
• Public Shipping Companies
• Small Ship Market
• Propulsion
• Container Recovery
• FPSO focus
• Rationale of 18,000 TEU
• Regulatory Agenda
• Naval, Superyacht and Fishing Market
• LNG Newbuild Order Potential
• Global Shipbuilding Capacity
• Smart Shipping
• Environmental + Regulatory Update
March 2017
www.clarksons.com
Shipbuilding Forecast Club Membership
26
Shipbuilding Forecast Club Monthly Update:
• Monthly Newsletter looking at recent contracting activity by ship type and builder
country in addition to developments in newbuilding prices, currencies and interest
rates
• Monthly Contracting Overview
- Complete list of new orders, options and rumoured contracts
- Summary of contracting by ship type and country
• Monthly Non-Delivery Monitoring
- Summary of Slippage and Cancellation trends by ship type and country
March 2017
www.clarksons.com
Shipbuilding Forecast Club Membership
27
Membership spans a variety of sectors including:
• Shipyards (6)
• Engine Manufacturers (9)
• Paint Suppliers (5)
• Classification Societies (3)
• Marine Equipment Suppliers (12)
• Government/Trade Associations (4)
• Financiers (5)
• Insurers (2)
March 2017
www.clarksons.com
Contacts At Clarksons Research
28
For more information on pricing and membership to the Shipbuilding & Shipping
Forecast Club please contact us for more information. Information on Clarksons
Research’s offshore focus multi-client group available on request.
Stephen Gordon
Managing Director
Tel: +44 (0) 20 7334 3439
Email: [email protected]
Alex Springer
Shipbuilding and Fabrication Group
Tel: +44 (0) 20 7334 5488
Email: [email protected]
March 2017
www.clarksons.com 29
The next meeting of the Shipbuilding Forecast Club will be held on
Wednesday 27th September 2017. The next Offshore Forecast Club
meeting will be held on Thursday 28th September.
Please note that a Spring 2017 update of the attached content is available
through membership of the Shipbuilding Forecast Club.
March 2017
www.clarksons.com
Disclaimer
The material and the information (including, without limitation, any future rates) contained herein (together, the "Information") are provided by CLARKSON RESEARCH
SERVICES LIMITED ("Clarksons Research") for general information purposes. The Information is drawn from Clarksons Research database and other sources. Clarksons
Research advises that: (i) any Information extracted from Clarksons Research database is derived from estimates or subjective judgments; (ii) any Information extracted from
the databases of other maritime data collection agencies may differ from the Information extracted from Clarksons Research database; (iii ) whilst Clarksons Research has
taken reasonable care in the compilation of the Information and believes it to be accurate and correct, data compilation is subject to limited audit and validation procedures
and may accordingly contain errors; (iv) the provision of the Information does not obviate any need to make appropriate further enquiries; (v) the provision of the Information
is not an endorsement of any commercial policies and/or any conclusions by Clarksons Research and its 'connected persons', and is not intended to recommend any decision
by the recipient; (vi) shipping is a variable and cyclical business and any forecasting concerning it may not be accurate. The Information is provided on "as is" and “as
available” basis. Clarksons Research and its ‘connected persons’ make no representations or warranties of any kind, express or implied about the completeness, accuracy,
reliability, suitability or availability with respect to the Information. Any reliance placed on such Information is therefore strictly at the recipient's own risk.
This Information is confidential and is solely for the internal use of the recipient. Neither the whole nor any part of the Information may be disclosed to, or used or relied upon
by, any other person or used for any other purpose without the prior written consent of Clarksons Research. Especially, the information is not to be used in any document for
the purposes of raising finance whether by way of debt or equity. All intellectual property rights are fully reserved by Clarksons Research, its ‘connected persons’ and/or its
licensors.
To the extent permitted by law, Clarksons Research and its ‘connected persons’ shall not be liable to the recipient or any th ird party for any loss, liability or damage, cost or
expense including without limitation, direct, indirect, consequential loss or damage, any loss of profit, loss of use, loss of or interruption in business, loss of goodwill, loss of
data arising out of, or in connection with, the use of and the reliance on the Information whether in contract, tort, negligence, bailment, breach of statutory duty or otherwise,
even if foreseeable.
These exclusions do not apply to (i) death or personal injury caused by the negligence of Clarksons Research and its ‘connected persons’ or (ii) the liability of Clarksons
Research and its ‘connected persons’ for fraud or fraudulent misrepresentation. In this disclaimer 'connected persons' means, in relation to Clarksons Research, its ultimate
holding company, subsidiaries and subsidiary undertakings of its ultimate holding company and the respective shareholders, directors, officers, employees and agents of
each of them. This disclaimer shall be governed by and construed in accordance with English law.
CLARKSON RESEARCH SERVICES LIMITED, COMMODITY QUAY, ST. KATHARINE DOCKS, LONDON, E1W 1BF
30 March 2017
