7/22/2019 Shipbuiliding market develpment
1/30
www.clarksons.com
Shipping Market Overview29 October 2013 Moore Stephens Opcost Launch
29th October 2013 Shipping Market Overview / Moore Stephens
Steve Gordon, MD, Clarkson Research Services Limited.
7/22/2019 Shipbuiliding market develpment
2/30
www.clarksons.com
About us
2
Broking
Clarksons shipbroking servicesare unrivalled: for the numberand calibre of our brokers; breadthof market coverage; geographicalspread and depth of marketintelligence; analysis and support.We aspire to be best-in-class andmarket leaders in all key sectors.
Support
Clarkson Port Services providesthe highest level of support tovessel owners, operators and
charterers at strategically locatedports in the UK and Egypt. Offeringships agency services, we arealso engaged in stevedoring andwarehousing at UK ports andsupport to the Offshore industry.
Financial
From derivative products that havebeen pioneered at Clarksons to fullinvestment banking services andtailored debt solutions, we help ourclients manage risk and fund andconclude deals that would often beimpossible via more traditionalroutes.
Research
Up-to-the-minute intelligence is thecornerstone of any shippingorganisation and Clarksons
Research Services is recognisedworldwide as the market-leadingprovider of comprehensive andreliable maritime information.
7/22/2019 Shipbuiliding market develpment
3/30
www.clarksons.com
Research
3
Offshore and energy
The leading provider of data to the offshoreindustry for more than 30 years. Providing clientswith the key information they need to operatetheir business more effectively. Marketintelligence is available on more than 25,000structures, vessels and companies and 6,000 oiland gas fields.
Shipping and trade
Market leaders in providing timely andauthoritative information on all aspects ofshipping. Data is available on over 100,000vessels either in service or on order, 10,000
companies and 600 shipyards as well asextensive trade and commercial data, and over100,000 time series.
Valuations
The worlds leading provider of valuations to theshipping industry and financial community. Morethan 20,000 valuations are handled annually,covering the full range of vessel types.
7/22/2019 Shipbuiliding market develpment
4/30
www.clarksons.com
Market Overview
October 2013 4
Agenda:
1.Market Cycle2.Seaborne Trade3.Fleet & Shipbuilding4.Ownership Dynamics5.Summary
7/22/2019 Shipbuiliding market develpment
5/30
www.clarksons.com
0
10
20
30
40
50
60
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
(ClarkSea Index is a weighted average of earnings by tankers, bulkers, containerships & gas carriers)
2004c.$40,000/day
2008$48,000/day
2000c.$24,000/day
Shipping Cycle 1965-2013: ClarkSea Index
US$000/day
Index avg value 90s: $12,018/day
Index avg value 00s: $21,690/day
Index avg value 2012: $9,957/day
18th October 2013 -$12,286 / day highestlevel this year, drivenby improved Capesize
market.
October 2013
7/22/2019 Shipbuiliding market develpment
6/30
www.clarksons.com
1.Huge Cash Pressures & Cost Focus
2.Surplus in the Volume Markets
3.Cash is King
4.Wide Spread Of Trading Regions &Demand OK
5.Some Sectors Have Done Better
6.Ships Still Trading & Slow Steaming butNot Laid Up
7.Big Change in Ship Economics Fuel &Regulations
8.Financing Squeeze
Five Years of Shipping Downturn
OPEX weighted using ClarkSea assumptions
$000/day
18th October - $12,286/ day but fell as lowas $7,920 / day in
February
ClarkSea Index 2008-13
7/22/2019 Shipbuiliding market develpment
7/30
www.clarksons.com 7
Earnings versus OPEX
ClarkSeaIndex
OpexIndex
$/day $/day
2008 32,947 6,8612009 11,407 6,6362010 15,345 6,8302011 12,463 6,9762012 9,586 7,1852013 9,539 7,400Source: Clarkson Research, October 2013
The Opex index is generated using the sameassumptions as the ClarkSea Index for
comparison purposes.
In February 2013, the two indexes reached theirsmallest differential in the downturn just $508per day across the 20,000 ships in theClarkSea fleet.
In May 2008, the differential was $40,633 perday and equated to $680 million dollars a dayacross the ClarkSea fleet.
7/22/2019 Shipbuiliding market develpment
8/30
www.clarksons.com
Cycle Position October 2013
This chart shows
average 1 year TC
rate for each ship
type as at
October 2013
compared to the
average 1 year TC
rate during the
last 10 years.
Crude stillstruggling but
Products &Chemicals better
Earnings remainclose to historic lows
7/22/2019 Shipbuiliding market develpment
9/30
www.clarksons.com
Earnings Since the Big Crash Whos Top Dog?
October 2013 9
Who Did Best Since the Crash? Whos Doing Best at Present?
7/22/2019 Shipbuiliding market develpment
10/30
www.clarksons.com 10
5 Year Old Prices
Secondhand & Newbuild Prices
24 October 2013
Source: Clarkson Research, October 2013
Newbui lding Prices
7/22/2019 Shipbuiliding market develpment
11/30
www.clarksons.com
World Seaborne Trade GrowthWorld Seaborne Trade Growth
Historically, world seaborne tradeexpansion has generally been relativelywell correlated to global economicgrowth.
In 2003, trade exceeded more than atonne for every person on the planet.
2009 was the first year of significanttrade contraction since 1983 but tradehas recovered well.
Sea trade cycles generally follow cyclesin world GDP but not precisely. 2013
2.9% GDP growth and 3.6% growth intrade.
In 2014, we expect trade to exceed 10billion tonnes for the first time.
October 2013
7/22/2019 Shipbuiliding market develpment
12/30
www.clarksons.com
World Seaborne Trade
4.1% average
Growth in world seaborne tradein last decade led by
Iron Ore
Containers
LNG
Coal
Vehicles
Average per annum rate ofaround 4% per annum.
2002-12 Trade Growth, avg pa%
Source : CRSL, 2011.
7/22/2019 Shipbuiliding market develpment
13/30
www.clarksons.com
We expect trade to grow by 3.5%in 2013 but risks remain giveneconomic developments /uncertainty and there is a lag ontrade data.
China accounts for over 40% ofthe growth in imports in the past
decade. For planning purposes, 4% per
annum growth in trade over thenext decade does not seemunreasonable, backed by
continued development of theglobalised world economy.
Seaborne Trade Outlook
Period %p.a.
1951-60 8.3%
1961-70 9.1%
1971-80 3.5%
1981-90 2.2%
1991-00 3.7%
2010-10 3.7%
October 2013
7/22/2019 Shipbuiliding market develpment
14/30
www.clarksons.com
Where Will The Trade Growth Be?
Estimated Share of Trade Growth2012-2024, Importers
Growth in world seaborne trade likely to be led
by import into China
Other Asian economies
Developing regions
According to approximate projections Chineseimport growth could account for 46% of thegrowth in tonnes in global seaborne imports,with other Indian imports accounting for 11%and other Asian economies 19%.
7/22/2019 Shipbuiliding market develpment
15/30
www.clarksons.com
Structural Patterns
US energy balance
China and India
Containers : Asia and Panama
Offshore energy contribution
Africa : energy and minerals
Unlocking the Arctic
Wildcards
Globalisation vs Protectionism;
Reshoring
Political instability
Fuel prices
Infrastructure and supply
Global economic growth story
Wildcards?
7/22/2019 Shipbuiliding market develpment
16/30
www.clarksons.com
World Offshore Producing Regions
London, September 2013 | OFC Club
September 2013
1. N. AmericaOffshore: 4.0 m bpd
Growth: 0.2% pa
2. S&CAmericaOffshore:
2.8 m bpdGrowth:2% pa
4. EuropeOffshore:2.9 m bpd
Growth: -5% pa
7. AsiaPacific
Offshore:3.4 m bpd
Growth: 1%pa
5. Med/ CaspianOffshore: 2.1 m
bpd
Growth: 0.2% pa
6. M East& India
Offshore:7.1 m bpd
Growth:2% pa
3. WestAfr ica
Offshore:4.2 m bpd
Growth:3% pa
Offshore Oil Product ion 2013 Forecasts
7/22/2019 Shipbuiliding market develpment
17/30
Shipping Market Overview | Clarkson Research
www.clarksons.com
The World Fleet: GT
From 1990 to 2004 the fleetgrew at 2-3% but then surgedto 7-9%. Fleet growth is nowstarting to slow.
Merchant Fleet August 2013:
1. 87,369 vessels over 100 GT
2. 1,125 million GT
3. $868 billion in value
The Size of the World Fleet (GT)
7/22/2019 Shipbuiliding market develpment
18/30
www.clarksons.comOctober 2013
Orderbook As & % Of FleetOrderbook % Fleet By (Dwt), Start Year
Orderbook % Fleet
Orderbook x 1.5 ofProduction but
number of activeyards declining
O/B as at August2013 is 242m dwt
$ 280bn
7/22/2019 Shipbuiliding market develpment
19/30
www.clarksons.com
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
0
200
400
600
800
1,000
1,200
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Fleet, end year
Fleet Growth % (RHS)
World Fleet Growth Development
Million GTFleet growth peaked at
c. 9% in 2010
Projected deliveries basedon current orderbook.
By 2023 ourforecasts
suggest thefleet will top1.5 billion GT
October 2013
Shipbuildingproductiondown 20% in2013 in dwtand 2012 arecord
demolitionyear.
7/22/2019 Shipbuiliding market develpment
20/30
Shipping Market Overview | Clarkson Research
www.clarksons.com
Regional Market Share Development
Global Shipbuilding Share of Contracting (CGT)Global Shipbui lding Share(2013 ytd Contracting in CGT)
7/22/2019 Shipbuiliding market develpment
21/30
www.clarksons.comOctober 2013
Offshore & Marine Orderbook by estimated contract value
Bulkers
31.3%
Contship
s
21.4%
Gas
14.5%
Other
16.2%
Tankers
16.0%
Marine $163bn $182 bn
Survey2%
Mobile OffshoreDrilling
52%
Construction11%
Mobile OffshoreProduction
20%
Logistics2%
AHTS4%
Supply8%
Rescue &Salvage
0%
Utility Support1%
Offshore $182bn
7/22/2019 Shipbuiliding market develpment
22/30
www.clarksons.com
0
5,000
10,000
15,000
20,000
25,000
30,000
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Rising Fuel Costs
$/day
MR 1 Year TimecharterRate
MR Bunker Cost $/day
October 2013
7/22/2019 Shipbuiliding market develpment
23/30
www.clarksons.com
Environmental Regulation Timeline
7/22/2019 Shipbuiliding market develpment
24/30
www.clarksons.com
Fleet(No)
Fleet(GT)
Value($bn)
2013Growth
OB(GT)
OB %
Europe 29,945 501.2 366.4 1.7% 69.9 13.9%
Asia/Pacific 36,308 448.1 295.1 4.1% 61.2 13.7%
Americas 8,982 91.5 129.2 0.9% 17.3 18.9%
Africa, Mid-East, S. Asia
7,993 75.2 55.2 4.3% 4.8 6.3%
Greece 4,673 157.5 78.6 4.2% 23.3 14.8%
Japan 8,600 157.3 104.0 2.0% 13.6 8.6%
China 6,236 110.8 68.9 4.6% 22.6 20.4%
Germany 4,316 96.5 60.4 -1.5% 8.4 8.7%
South Korea 2,657 54.4 27.9 5.8% 6.8 12.6%
Others 60,589 543.7 510.8 2.6% 92.1 16.9%
Total 87,071 1,120.2 850.6 2.7% 166.8 14.9%
World Fleet by Owner
7/22/2019 Shipbuiliding market develpment
25/30
www.clarksons.com 25
Regional Ownership Europe v Asia During the market boom, European ownershipgrew strongly and maintained market share witharound 45% of global fleet by GT.
There has been a long term trend towards AsiaPacific ownership which topped 40% in 2013.
Will changes in cargo base and financing impactthis trend further?
Greece and Japan the two biggest fleets andneck and neck. China has overtaken Germanyto take third position and the fleet is growingrapidly
In the past five years, Brazil, China, Turkey,South Korea and Indonesian fleets have grownthe most in % terms.
70% of the world fleet is in Open registriescompared to under 30% in the 1980s.
Asian Owners Growing Market Share
Source: Clarkson Research, October 2013
7/22/2019 Shipbuiliding market develpment
26/30
www.clarksons.com 26
World Fleet by Company Size The average shipping company runs 5 shipsbut this is dragged down by thousands ofowners only owning one or two ships.
28% of world tonnage is controlled by ownersrunning 21 to 50 ships.
30% of world tonnage is owned by ownersrunning over 50 ships.
There is a lot of noise in the data so identifyingclear trends towards consolidation is difficult.
World Fleet by Company Size
Source: Clarkson Research, October 2013
7/22/2019 Shipbuiliding market develpment
27/30
www.clarksons.com 27
World Fleet by Owner Type Approximately 56% of the worlds tonnage is stillowned by independent private companies.
Approximately 37% of the world fleet by tonnageis owned by corporates but this includes listedoil companies and other cargo interests.
The share of the stock listed fleet has beensteady following strong growth from 2003 to
2008 but there is some more activity at present.
With the difficulties in securing finance and thecurrent private equity interest there may bedrivers towards larger and more corporatecompanies.
Others includes state owned shippingcompanies and state owned oil companies andother cargo interests.
World Fleet by Type
24 October 2013
Source: Clarkson Research, October 2013
7/22/2019 Shipbuiliding market develpment
28/30
www.clarksons.com 28
IPO, Follow & Bond Activ ity 2004-13 NYSE exchange is the largest exchange with 60companies operating 104m gt, (9% of the worldfleet).
2005 was a record year for IPOs with 25 placedglobally.
Activity hit a low in 2012 with only 4 IPOs and 5Follow On offerings.
Activity has increased recently with a number ofIPOs placed.
Bond activity was strong in the period 2009 to2012.
Capital Market Activity
24 October 2013
Source: Clarkson Research, October 2013
7/22/2019 Shipbuiliding market develpment
29/30
www.clarksons.com
Summary In 2013, we have been at the bottom of the cycle and market conditions are sti ll
challenging but there are a few encouraging signs. Some of the niche sectors havebeen better posi tioned Offshore, Gas, Chemicals, Products.
Following the demand shock in 2009, trade has recovered well and we expect 3.5%growth in 2013. In 2014 we forecast trade will top 10 bil lion tonnes for the first t ime.4% is a reasonable base case for the future assuming globalisation.
Fleet growth is slowing, from 8% in 2011 to 5% in 2012. We expect growth to drop to4% in 2013 and below 4% in 2014 but keep an eye on ordering.
Despite the difficult spot market conditions, we have seen newbuild interest frominvestors in 2013.
Regulatory Economics & Fuel Economics are important to current investment.Financing remains diff icult and has limited investment but there are new sources
such as Private Equity and Capital Markets.
Asian owners growing market share with double the fleet growth of Europeans in2013. Greeks and Japanese the largest owners but China has surged past Germany.Norwegians, Greeks and Chinese have topped the investment charts in recent years.
7/22/2019 Shipbuiliding market develpment
30/30
www.clarksons.com
The information supplied herewith is believed to be correct but the accuracy thereof is not guaranteed and the
Company and its employees cannot accept liability for loss suffered in consequence of reliance on the
information provided. Provision of this data does not obviate the need to make further appropriate enquiriesand inspections. The information is for the use of the recipient only and is not to be used in any document for
the purposes of raising finance without the written permission of Clarkson Research Services Limited.
The statistical and graphical information contained herein is drawn from the Clarkson Research Services
Limited ("CRSL") database and other sources. CRSL has advised that: (i) some information in CRSL's
database is derived from estimates or subjective judgments; and (ii) the information in the databases of other
maritime data collection agencies may differ from the information in CRSL's database; and (iii) whilst CRSLhas taken reasonable care in the compilation of the statistical and graphical information and believes it to be
accurate and correct, data compilation is subject to limited audit and validation procedures and may
accordingly contain errors; and (iv) CRSL, its agents, officers and employees do not accept liability for any loss
suffered in consequence of reliance on such information or in any other manner; and (v) the provision of such
information does not obviate any need to make appropriate further enquiries; (vi) the provision of such
information is not an endorsement of any commercial policies and/or any conclusions by CRSL; and (vii)
shipping is a variable and cyclical business and any forecasting concerning it cannot be very accurate.
Recommended