2016-10 Fonasba Meeting London · 2016-11-28 · banchero costa October 2016 –Fonasbameeting 1...

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1October 2016 – Fonasba meeting

Fonasba Annual Meeting 2016

Market Outlook

Enrico Paglia

19 October 2016, London

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banchero costa groupwww.bancosta.com ; [email protected]

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dry bulk

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Dry Bulk – Fleet Growth Jan/Sep 2016 – Nr. Of Units

Fleet 01/01/2016* 2,345 Fleet 01/01/2016* 2,933 Fleet 01/01/2016* 1,990

Nb deliveries 99 Nb deliveries 165 Nb deliveries 83

Demolitions 75 Demolitions 69 Demolitions 98

Balance +24 Balance +96 Balance ‐15

Fleet 30/09/2016 2,369 Fleet 30/09/2016 3,029 Fleet 30/09/2016 1,975

Fleet 01/01/2016* 527 Fleet 01/01/2016* 1,293 Fleet 01/01/2016* 210



Balance +10 Balance +11 Balance ‐2

Fleet 30/09/2016 537 Fleet 30/09/2016 1,304 Fleet 30/09/2016 208

Supramax (40‐65,000 dwt) Panamax (65‐85,000 dwt)Handysize (20‐40,000 dwt)

Post‐Panamax (85‐120,000 dwt) Capesize (120‐220,000 dwt) VLOC (220,000 + dwt)

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Dry Bulk – Fleet Growth Jan/Sep 2016 ‐ DWT


Nb deliveries 3,635 Nb deliveries 10,064 Nb deliveries 6,781

Demolitions 2,174 Demolitions 3,123 Demolitions 7,051

Balance +1,461 +2.0% Balance +6,941 +4.3% Balance ‐271 ‐0.2%




Demolitions 88 Demolitions 11,284 Demolitions 1,508

Balance +934 +1.8% Balance +3,715 +1.6% Balance ‐291 ‐0.5%


Panamax (65‐85,000 dwt)

VLOC (220,000 + dwt)

Handysize (20‐40,000 dwt)

Post‐Panamax (85‐120,000 dwt)

Supramax (40‐65,000 dwt)

Capesize (120‐220,000 dwt)

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Dry Bulk ‐ Deliveries

• Until 2008, no more than 20 mlnDWT per year

• In 2011 and 2012 we reached 100 mln DWT

• Since 2014 we are back to 45‐50 mln DWT

• Same expected for 2016 and 2017, after allowing for 35% slippage

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

100.0

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

mln DWT

Dry Bulk Deliveries + Orderbook in DWT ‐ Annual (only units over 20,000 dwt ‐ assuming 35% slippage)

VLOC Capesize Post‐Panamax Panamax Supramax Handysize

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+7% +6% +5% +8%

+17% +15%+12%

+6% +5% +3% +3% +1% +0%

0.0

100.0

200.0

300.0

400.0

500.0

600.0

700.0

800.0

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016(f) 2017(f) 2018(f)

mln DWT

Projected Total Dry Bulk Fleet Growth(all units over 20,000 dwt ; assuming 35% slippage)

Dry Bulk Fleet Size (in mln DWT) Y‐o‐Y Growth

• Until 2008, total fleet growth was below 7% y‐o‐y

• In 2010 fleet expansion reached 17% y‐o‐y, followed by 15% in 2011

• Even though growth has now moderated, we are still suffering from previous excesses

Dry Bulk – Fleet Growth

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Dry Bulk Trade – Structure

• 50% of the trade is either Iron Ore or Coal

• 45% Steel industry‐related

• 18% agricultural‐related

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+7%+2%

‐4%

+12%+6% +6% +6% +5%

+0% +1%

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 (f)

mln to

nnes

World Dry Bulk Commodity Trade(source: various ; in mln tonnes)

Iron ore Coal Grains/Soybeans Steel Products Other Y‐o‐Y Growth

Dry Bulk Trade – Growth

• Despite perceptions, demand has remained very strong until 2015

• Total dry bulk trade in 2015 was 14% higher than in 2007, before the financial crisis

• However, growth has slowed to 0% in 2015

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Dry Bulk Trade – Coal into China

• Despite perceptions, demand has remained very strong over the last 5 years

• Total dry bulk trade in 2015 was 14% higher than in 2007, before the financial crisis

• However, growth has slowed to 0% in 2015

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crude oil tankers

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Crude Oil Tanker – Fleet Growth Jan/Sep 2016

Fleet 01/01/2016* 891 Fleet 01/01/2016* 455 Fleet 01/01/2016* 648



Balance +36 Balance +19 Balance +35

Fleet 30/09/16 927 Fleet 30/09/16 474 Fleet 30/09/16 683

Aframax & LR2 (78‐120,000 dwt) Suezmax (120‐200,000 dwt) VLCC (200,000+ dwt)




Balance +4,080 4.2% Balance +3,007 4.2% Balance +10,619 5.3%


Aframax & LR2 (78‐120,000 dwt) Suezmax (120‐200,000 dwt) VLCC (200,000+ dwt)

Nr. Of u

nits

DWT

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Crude Oil Tanker ‐ Deliveries

• Delivery scheduled for 2016 are for a total 32 mln dwt (3 x 2015)

• Horribly close to the levels registered during 2009, 2010 and 2011

• 2017 another year of strong deliveries

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• Over the last 3 years fleet growth was less than 2% on average

• 2016 growth estimated at 8%, assuming no slippage and virtually zero demolition

• Strong growth also in 2017

Crude Oil Tanker – Fleet Growth

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Crude Oil – US Production and Imports

Imports

Production

• US production increased from 6.2 mln bbl/day in 2012 to 9.3 in 2015, then to 8.5 in Sept 2016

• US imports dropped from 8.7 mln bbl/day in 2012 to 7.3 in 2015

• From the end of 2015 started improving again, 8.2 mln bbl/day over the last 3 months

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product tankers

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Product Tanker – Fleet Growth Jan/Sep 2016

Nr. Of u

nits

DWT

Fleet 01/01/2016* 693 Fleet 01/01/2016* 1,386 Fleet 01/01/2016* 347



Balance +12 Balance +78 Balance +12

Fleet 30/09/16 705 Fleet 30/09/16 1,464 Fleet 30/09/16 359

MR2 Product (42‐60,000 dwt) LR1 Product (60‐78,000 dwt)MR1 Product (30‐42,000 dwt)


Nb deliveries 866 Nb deliveries 4,032 Nb deliveries 964


Balance +439 1.7% Balance +3,897 5.8% Balance +895 3.5%


LR1 Product (60‐78,000 dwt)MR1 Product (30‐42,000 dwt) MR2 Product (42‐60,000 dwt)

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Product Tanker ‐ Deliveries

• Before 2004 deliveries did not exceed 5 mln dwt

• From 2004 to 2011 almost 12 mln dwt per year on average

• 2012‐2014 just 6.3 mln dwt

• 2016: 14.4 mln dwt scheduled (37% LR2 and 40% MR2).

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• After strong rates until 2011, the growth slowed considerably in 2012

• From 2015 to 2017 strong growth, again…

• Orderbook almost empty from 2018 onwards

Product Tanker – Fleet Growth

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Product Trade – Growth

• Product trade has been the most lively: 6% growth of 10 years with spikes over 10%

• Demand remains healthy due to the reorganization of the refining capacity worldwide

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DRY:• From the bottom in February rates started a slow improving trend.• Demoltion activity limits the fleet growth, which is slowing, but is still higher than demand growth.

• On order there are still over 90 mln dwt: 200 Handysize, 340 Supramax/Ultramax, 230 Panamax, 13 Post‐Panamax, 110 Capesize and 60 VLOC.

• Chinese coal imports sent rates to histoical low levels, a rebound of imports in recent months is supporting improving rates

CRUDE:

• After the peak at the end of 2015 rates kept steadily declining. Recently, both seasonality and improving trading patterns are offering some support.

• The orderbook is still huge, almost 63 mln dwt (including LR2): 160 Aframax, 100 Suezmax and 100 VLCC.• Atlantic cargoes are playing and will play a huge role for the developments of the market.PRODUCTS:• From a peak at the end of 2015 rates kept steadily declining.• Demand remains healthy, but tonnage supply is excessive and the fleet keeps growing too fast.• The orderbook will drop from 2017 (excluding LR2).

• The re‐organization of the refining capacity offers great demand potential and its evolution is key for a recovery.

Conclusions

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

Whilst banchero costa has used reasonable efforts to include accurate and up-to-date information in this presentation, banchero costa makes no warranties or representations as to the accuracy ofany information contained herein or accuracy or reasonableness of conclusions drawn there from.

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

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

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2016-10 Fonasba Meeting London · 2016-11-28 · banchero costa October 2016 –Fonasbameeting 1...

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