A Presentation

By

A Presentation for AFOA 2013

Chemical Tanker Market Analysis Brian A. Cleary

New York 10 October, 2013

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GLOBAL SHIPBROKING

MARKET RESEARCH

CONSULTANCY

INTEGRATED LOGISTICS SOLUTIONS

GENERAL AGENCY

Services :

Vision :

cost effective bulk shipping and logistics solutions, placing us at the forefront of the industry's best practice.

Presence :

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Part 1 . GDP GROWTH

PRODUCT FLOWS

FLEET GROWTH

Part 2 . FATS AND OILS (USA MARKET)

Part 3 . INDUSTRY ISSUES

Contents:

The contents of this presentation includes information that was derived from the following sources: PIERS, Platts, Drewry Shipping Consultants, CMAI,

Tradewinds News, Bloomberg, ICIS, Apic-online, Economics & Statistical Department of American Chemistry Council, IMF, Chem.cn, IE Singapore, Eurostat,

Energy Information Administration, financial reports and articles of publicly listed companies.

https://www.fatsandoils.org/

Part 1. GDP GROWTH

PRODUCT FLOWS

FLEET GROWTH

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http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=yhoGYIyKovvjCM&tbnid=ygMkeVN1QSP9LM:&ved=0CAUQjRw&url=http://designm.ag/resources/100-free-vector-map-files/&ei=_pVJUtv1Kc-w4APax4GQCg&bvm=bv.53217764,d.dmg&psig=AFQjCNE7lXcQRygvPL5w13qkBVjWtKTGeA&ust=1380640608011512

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Market Outlook: Global Economic Outlook

Global Economic conditions remain weak . As of July 2013, the IMF projected global growth to

remain subdued at less than 4%. Europe still faces sovereign debt issues and will remain in recession for 2013. Emerging markets and developing economies are now expected to grow by 6%. Advanced economies are expected to reach growth levels of just over 2% by the end of 2013. All areas are expected to improve in 2014.

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Market Demand: US Chemical Flows- Basket Sample of Products

US Chemical imports increased considerably in 2011 by 26.3% before coming off

slightly to stabilize around 14.3M tons in 2012

US Chemical exports increased significantly in 2011 by 16.2% with volumes stabilizing

around 15.1M tons in 2012

12,485,365t12,765,134t

16,119,830t

14,314,650t

12,685,835t 12,868,294t

14,947,147t 15,054,535t

0t

2,000,000t

4,000,000t

6,000,000t

8,000,000t

10,000,000t

12,000,000t

14,000,000t

16,000,000t

18,000,000t

2009 2010 2011 2012

Vo

lum

e (

T)

USA Chemical Import/Export 2009-2012

US Chemical Imports US Chemical Exports

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Fleet: Parcel/Product Tanker Fleet Growth

The global fleet grew by approximately 25% between 2008 and 2012.

2013 is expected to grow by another 5-6%.

The placement of firm orders for delivery in 2014-2016 is low and potential

scrapping could result in a very small increase in overall fleet growth .

-10

0

10

20

30

40

50

60

70

80

90

2008 2009 2010 2011 2012 2013 2014 2015 2016

DW

T in

Mill

ions

Global Chemical Fleet Development from 2008 to 2016(Vessel size range upto 53,500dwt)

Fleet Added Scrapped Potential Scrapping

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Fleet: Size Distribution

During the when financing was readily available, Owners, Investors and

Shipyards became embarking on ambitious fleet expansion

programs .

This was coupled with a trend towards larger ships used in inter -continental trades and

fewer small ships were built which will lead to tighter supply of vessels to service short sea

regional trade lanes .

The future will see fewer sophisticated ships to service smaller multi -grade parcels

shipped by Producers and Traders on various trade -lanes . Once the demand/supply

balance for tonnage tips, the uptrend in the freight curve to lift smaller grades will be

steeper than for large lots of commodity chemicals .

47%

13%

9%

8%

23%

Global Fleet by Size in 2005(by number of ships)

Under 10k

10-18k

18-28k

28-35k

36-54k

40%

20%

9%3%

28%

Global Fleet by Size in 2012 (by number of ships)

Under 10k

10-18k

18-28k

28-35k

36-54k

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Intercontinental Fleet

0

2

4

6

8

10

12

14

16

18

20

0

50

100

150

200

250

300

350

400

450

15-17,999 18-22,999 23-29,999 30-34,999 35-39,999 40-44,999 45-49,999 50-53,500

To

ns (

'00)

No

. o

f S

hip

s

Vessel Size

Intercontinental Fleet 15,000-53,500 DWT

1,915 Ships/68 Million DWT

No. of Ships Tons ('000)

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Freight Forecast: Supply/Demand Cycles History Repeating itself

During freight market upturns, placement of new orders for ships rise

resulting in oversupply, which in turn leads to the next freight market down

cycle .

After nearly 5 years of a poor shipping market, we are at the cross roads of

a new cycle . Delivery of new ships is declining, recycling remains at current

levels and demand for long -haul transportation is rising.

Increasing Order Book

Market Downturn

Increasing Order Book Increasing Order Book

Market Downturn

Peak in Vessel Deliveries Peak in Vessel Delivery

Market Boom Market Boom Market Boom

Length Length Length

?

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Freight Trends: US Trade Routes

Part 2. FATS AND OILS (USA MARKET)

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Exports increased through 2010 but are now in decline

Imports have been on the rise since 2010

2013 figures reflect imports/exports through June

USA Imports / Exports

2,806,000 MT 2,636,000 MT

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USA Exports by Product

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USA Imports by Product

Metric Tons

Protocols for preventing contamination during the shipping of oils in bulk by sea

FOSFA - Federation of Oils, Seeds and Fats Assoc.

EU1 - European Commission, European Food Safety Authority

NIOP - National Institute of Oilseed Products

CIQ - China Inspection & Quarantine Services

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USA Imports of FOSFA Acceptable Last Cargoes in 2012 (14,076,000 MT)

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Adjusted USA Imports of FOSFA Acceptable Last Cargoes 2012 (excludes carriage on dedicated ships and only 50% of Caustic Soda) 8,509,000 MT (60%)

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