LPG Shipping Outlook Special focus on India - Intertanko · PDF fileRESHAMWALA SHIPBROKERS,...

RESHAMWALA SHIPBROKERS, MUMBAI – DELHI (NCR)

Reshamwala ShipbrokersEstb. 1948

LPG Shipping Outlook

Special focus on India

INTERTANKO – Gas ForumSingapore 2016

LPG Shipping OutlookSpecial Focus on India

Prepared for

INTERTANKO GAS FORUM

Singapore 2016

Prepared by

Reshamwala Shipbrokers, India



DISCLAIMER:This presentation is for information purpose only and should not be seen as a trading recommendation or a solicitation to trade.Opinions expressed here are subject to change without notice. The information provided here has been obtained from available date and sources from the industry. Efforts are made to try and ensure accuracy of data however, Reshamwala Shipbrokers and/or any ofits affiliates and/or employees accept no liability whatsoever for any direct or consequential loss arising from the use of thispresentation. This presentation should not be distributed or otherwise reproduced.

Reshamwala Shipbrokers Pvt. Ltd.

Reshamwala Shipbrokers

- Established in 1948

- Pioneered shipbroking in India

- Presently one of India’s largest shipbroking companies

- Involved in segments of Tankers, Gas (LPG + LNG), Dry bulk, Chemicals, Palm Oil, Offshore, Research, Projects and Sales & Purchase

- Entered into the LPG business in 1975


Global LPG Production


0

10

20

30

40

50

60

70

80

90

OPEC Russia USA Others

Mill

ion

Tonn

es Iran

UAE

Qatar

Saudi Arabia

Other OPEC

Global LPG Production for 2015

• OPEC @ 80.50 million tonsSaudi Arabia @ 25

million tonsQatar @ 11 million tonsUAE @ 11.5 million tonsIran @ 8 million tonsRest of OPEC @ 25

million tons• Russia @ 12 million tons• USA @ 55 million tons• Others @ 33 million tons

Source : In-house Data, EIA

Global LPG Supply


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2010 2011 2012 2013 2013 2015

% o

f tot

al su

pply

% wise break down of LPG supply

U.S

Lat.Am

Med.

WAF

N.Sea

SEAsia

MEG

0

50000

100000

150000

200000

250000

300000

2009 2010 2011 2012 2013 2014 2015

In 1

000

barr

els

USA Exports over the years

Source : In-house Data, EIA, Thomas Reuters

Middle East LPG Exports


0

5

10

15

20

25

30

35

40

2008 2009 2010 2011 2012 2013 2014 2015

Mill

ion

Tonn

es UAE

Iran

Qatar

Kuwait

Saudi Arabia

• Supply from the Middle East Gulf was down about 1.2% in 2015, due to reduced supply from Qatar, Iran and Bahrain

Source : In-house Data, Platts

Global LPG Seaborne Demand


0

10

20

30

40

50

60

70

80

2010 2011 2012 2013 2014 2015

Mill

ion

Tonn

es

Americas

Africa

Med

NorthernEurope

Asia-Pacfic

Global Seaborne LPG trade

• Decrease in Far East Asian demand has been balanced by Chinese and Indian imports

• China and India have together imported about 5.5 million tons more LPG in 2015 than the previous year

• Together they accounted for 45% of Far East imports

• Europe and Latin America have seen a slight increase of imports in 2015

Source : In-house Data, ICIS, Platts

Far East LPG Demand


0

5

10

15

20

25

30

35

40

45

50

2009 2010 2011 2012 2013 2014 2015

Mill

ion

Tonn

es Others

China

Korea

India

Japan

• Deliveries into East accounted for about 46.78 million tons; up 7% from the previous year

• Whilst Japan, Korea and the rest of Asia saw a reduction in imports, China and India saw an increase in imports

• China’s imports were up about 70% and India’s imports were up about 7% from the previous year

• US is likely to increase its LPG export volumes. The VLGC cargo movement in 2015 grew 18% and is estimated to grow another 13% this year.

Source : In-house Data, ICIS

LPG Gas Fleet


• Due to continuous rise in LPG markets through 2014 – 2015; LPG tonnage to the tune of 32% of the existing fleet was ordered – still to be delivered

Present Fleet Orderbook Number of Vessels On order as % of

existing fleet

No. of Vessel

s

Mn. CBM

No. of Vessel

s

Mn. CBM

20152016 YTD

2016 Rest

2017 2018 2019

VLGC 221 17.84 69 5.72 35 23 28 30 7 4 32.08LGC 24 1.39 2 0.12 3 0 2 0 0 0 8.63MGC 72 2.55 43 1.62 3 4 10 29 3 1 63.31Handy 96 1.98 35 0.74 7 2 15 18 2 0 37.31SGC 298 2.31 26 0.24 24 7 12 12 2 0 10.44Total 711 26.07 175 8.44 72 35 67 89 14 5 32.37

Source : In-house Data

LPG Fleet Age Profile


0

10

20

30

40

50

60

70

80

90

SGC Handy MGC VLGC

OB

0-4 years

5-9 years

10-14 years

14-19 years

20-24 years

25+ years


Current Market Slump


22.02

35.254

55.5 55.94859.205

92.249 91.911

39.29

$8,052

$17,224

$32,263 $32,255

$37,081

$71,365

$ 79,544

$ 31,227

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

0

10

20

30

40

50

60

70

80

90

100

2009 2010 2011 2012 2013 2014 2015 2016 YTD

$/Pm

t

Annual Average BLPG rate • 2014 and 2015 amongst best years witnessed by ship Owners, where the BLPG index was in excess of US$ 90 pmt

• 2016 saw a steep decline

0

20

40

60

80

100

120

Jan Feb March2015q1 2016 q1

Illustrating LPG market in 2015/16BLPG Index

Source : In-house Data, Baltic Exchange

India’s LPG Consumption


12.2

13.1

14.3

15.415.6

16.3

18.019.6 20.6 21.6

1.5%

7.7%

9.1%

7.1%1.6%

4.7%

10.47%

10.5% 5.36%

4.85%

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

18,000,000

20,000,000

22,000,000

24,000,000

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18

LPG Consumption Growth Since Previous Year Expected LPG Consumption

• Over the past 5 years India’s LPG consumption has grown 27.37%

• At 19.55 million metric tons (2015-16), India stands at 5 position as a global consumer

• This growth is attributed to the development of India especially the rural areas


India’s LPG Production


9.33

10.3

9.62 9.55

9.83 10.03

9.84

10.6

5.27%

10.8%

-6.96% -0.72%

2.93%2.03%

-1.91%

7.72%

5,000,000

6,000,000

7,000,000

8,000,000

9,000,000

10,000,000

11,000,000

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

LPG Production Growth Since Previous Year

• India’s LPG Production has over the past years remained more or less flat at around 10 million tons per annum

• Although there are new refineries on the anvil, India’s consumption is growing at a much rapid pace

Expected LPG ConsumptionSource : In-house Data

India’s LPG Imports


2.43 2.72

4.48

5.79

6.29 6.60

8.53

9.07

-14.47%12.17%

64.70%

29.13%8.69%

4.99%

29.12%

6.37%

1,500,000

2,500,000

3,500,000

4,500,000

5,500,000

6,500,000

7,500,000

8,500,000

9,500,000

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

LPG Imports Growth Since Previous Year Expected LPG Consumption

• In 5 years since 2011, India’s LPG imports have grown almost 51.99% to 9.07 million tons

• 2nd largest importer in Asia after China – who stands at 12.095 million metric tons

• In India, LPG is primarily imported by Public (Government) Sector Companies

• About 1.7 million tons imported by private companies in 2015-16


Sourcing of LPG – by PSU’s


0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

KPC Saudi Aramco ADNOC Tasweeq

BPCL HPCL IOC

IOC HPCL BPCL TOTAL

KPC 462,000 195,000 156,000 813,000

Saudi Aramco

1,202,000

370,000 1,000,000

2,572,000

ADNOC 504,000 480,000 300,000 1,284,000

Tasweeq

1,889,000

630,000 360,000 2,879,000

TOTAL 4,057,000

1,675,000 1,816,000

7,548,000

53.74% 22.19% 24.06% 100%

Sourcing of LPG by Supplier 2015-16 (for PSU)


Port-wise LPG Imports


782 kt

532 kt

52 kt

483 kt

706 kt

1603 kt

236 kt

1421 kt1287 kt

1971 kt

4 kt0

500,000

1,000,000

1,500,000

2,000,000

Sikk

a

Dah

ej

Pipa

vav

Pirp

av/

Mum

bai

JNPT

New

Man

galo

re

Tutic

orin

Enn

ore

Viz

ag

Hald

ia

Port

Blair

West Coast India Ports East Coast India Ports

• Out of India’s 9.08 million imports;

• WCI accounted for about 46% ( 4.16 million metric tons) of total imports

• New Mangalore @ 1.603 million tons

• ECI accounted for about 54.2% (4.92 million metric tons) of total imports

• Haldia @ 1.97 million tonsSource : In-house Data


Map illustrating India’s LPG

receiving facilities


India’s Spot LPG Liftings


2008 2009 2010 2011 2012 2013 2014 2015 2016 Jan-May

VLGC 2 6 19 22 38 53 89 110 22LGC - 8 16 13 9 7 7 3 -MGC 2 24 38 18 13 9 22 26 10Handy Size 2 24 49 29 12 8 7 16 2TOTAL 6 64 122 82 87 91 125 155 34

Number of Indian LPG Spot Liftings through the years (as per date of enquiry)

2015 2016 (Jan-May)IOC HPCL BPCL TOTAL IOC HPCL BPCL TOTAL

VLGC 60 15 25 100 16 4 2 22LGC 3 - - 3 - - -MGC 23 3 - 26 5 - 5 10Handy Size 15 - 1 16 2 - - 2TOTAL 101 18 26 145 23 4 7 34

Company-wise Spot Liftings (as per date of enquiry)


Indian PSU - Time Chartered fleet


VLGC MGC SGC Semi-Ref

IOC 4 3 1 -BPCL 2 2 1 1HPCL 3 1 - -TOTAL 9 6 2 1

• 2016 has seen lesser number of spot cargoes, primarily due to the growth of Indian PSU Time Chartered fleet.

• In 2016; the Company’s in-chartered 4 VLGC’s and IOC is in the market for 1 up to 3 more vessels for a period of 12 + 12 months


The Way Ahead• Panama Canal opening June 2016 for VLGC’s – reducing

ton mile for USG – East trade & potentially dividing market into AG and USG

• Continuous decrease in Far East demand for LPG

• Present VLGC fleet around 220 vessels with 69 in the order book; majority will be delivered by end 2017

• Out of the 220 VLGC’s, about 38 are over 20 years in age, hence see little volume being scrapped

• Slump in the market may assist for vessels being demolished but unlikely to offset the influx of tonnages

• 2016 has seen lowest average BLPG in the past 6 years, averaging about US$ 39 thus far; and will continue to be under pressure with the tonnage inflow


• India has a large rural population with limited access to cooking and heating fuels; Government intends to bring LPG to every household

• By 2020; LPG demand is expected to touch 24 million metric tons

• More and improvised LPG import handling terminals – Ennore, JNPT, Mangalore

• Larger pipeline grid

• Increased tankage – Ennore, JNPT, Kandla, Haldia

• More bottling capacity – 182 million customers in FY 2015 – up 51% since FY 2010


• As you can see with India’s increasing imports, will only increase the seaborne trade

• India’s struggle with infrastructure development absorbs tonnage into waiting, and hence high turn around time

• As India continues to grow, so will her demand for LPG


18.4 19.7 20.8

21.822.5 23.3 23.9 24.3

24.8

10.3 9.8 10.6 10.8 10.8 11.0

11.2 11.2 11.2

6.68.5

9.110.6 11.5 12.0

12.3 12.6 12.9

0.0

5.0

10.0

15.0

20.0

25.0

30.0

2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22

Consumption Production Imports

India’s LPG Consumption, Production, Imports – on the anvil




Ajay Reshamwala

Reshamwala Shipbrokers

www.reshamwalashipbrokers.com

LPG Shipping Outlook Special focus on India - Intertanko · PDF fileRESHAMWALA SHIPBROKERS,...

Documents

Transcript of LPG Shipping Outlook Special focus on India - Intertanko · PDF fileRESHAMWALA SHIPBROKERS,...