MARITIME
Market Update – Time to redesign our models?
INCENTRA Council Meeting - Haugesund
Jakub Walenkiewicz
01 September 2015
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SAFER, SMARTER, GREENER
JM Keynes – AGGREGATED DEMAND
 Boost the economy
 Increase spending
 CREATE additional demand! (called aggregated demand)
 USE public sector if the private one is insufficient
John Maynard Keynes
British economist
1883-1946
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Contracting vs earnings
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Demand vs Supply
 Seaborne trade growth has
been satisfactory, with annual
growth 3-4%
 Sizable drop in world trade in
2009 is casually neglected
 Yet the fleet growth is
notoriously faster then demand
 There seems to always be a
reason to contract a new ship
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Reasons for contracting
Reasonable
Speculative/political
Insane
 Renewal
 Counter cyclical orders
 Purpose built (for
complex projects)
 Capital availability (PE)
 “my ship will be ready
by the time the market
has recovered”
 Trading areas – ECA
 Increased efficiency
and/or competitiveness
 Cargo demand (very
specific segments only)
 Incentive schemes (i.e.
China)
 Limited capacity in
yards?
 “Last one in the queue”
syndrome
 Stakeholders pressure
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 currency exchange
 killer offers from yards
(and financiers)
Contracting 2015 1H
 Continued slow-down in the NB market
 Substantially lower volume of contracts
– 1H 2015 over 50% below 1H 2014
 South Korea - 38% share (GT) :
– crude, container, products, gas
 China – 27% share (GT):
– crude, bulk, containers, gas
 Japanese - 25% share (GT):
– bulk, containers, crude, products,
gas
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INSANITY
“doing the same thing over and over again,
each time expecting different results”
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New contracts activity
 Obvious slow down y-o-y
 Biggest correction in bulk and
offshore segments
 Despite fewer vessels ordered, the
tanker segment remains strong
 Container market stronger!
 Still positive sentiment in the gas
sector despite large orderbook
 So far 1050 contracts (41.9 mill. GT)
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World Seaborne Trade
 Seaborne trade in 2014 reached
10.537 billion tonnes
 Expected growth in 2015 – 10.959
billion tonnes (UP 4.1%)

Iron Ore
+ 6.4%

Coal
+ 2.3%

Crude Oil
+ 1.4%

Oil Products
+ 3.4%

Containers
+ 7.1%

Gas & Chem + 5.1%
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Orderbook composition
Orderbook
acc.by
bycountry
country
ofship
domicile
builder
as
Orderbook
acc.
of
domicile
operator
asof
of2015.06.01
2015.06.01
Orderbook
acc. by
type as
of 2015.06.01
Builder
Number of vessels Share (%)
DWT
Share (%)
Operator
Country
Ship Country
Type
China
2576
39,2%
570
42,8%
Greece
397
6,0%
41
309 167
879
14,2%
Bulker
1624
24,7
% 124
133963997
46,0
%
Korea
(South)
870
13,2%
666
29,4%
Singapore
599
9,1%
2778851704
991 353
740
9,6%
Tanker
1027
15,6
% 85
27,1
%
Japan
954
14,5%
959
18,5%
China
456
6,9%
2340511835
742 996
634
8,2%
Container
445
6,8
% 53
13,9
%
Philippines
102
1,6%
812354974
742
3,0%
JapanCarrier
366
5,6%
497 504
906
6,4%
LNG
159
2,4
% 18
4,2
%
Brazil
161
2,4%
510806838
607
1,9%
Norway
254
3,9%
968 710
913
4,5%
Offshore
1317
20,0
% 12
3,7
%
Romania
74
1,1%
3 6934009
263
1,1%
HongCarrier
Kong
209
3,2%
948 884
166
3,8%
LPG
220
3,3
% 10
2,4
%
Vietnam
212
3,2%
2 4445869
220
0,8%
Bermuda
133
2,0%
848 439
428
3,7%
Dry
Cargo
337
5,1
% 10
1,5
%
Chinese
36
0,5%
1 1513708
531
0,5%
GermanyTaipei (Taiwan)
202
3,1%
765 281
474
3,7%
Roro
128
1,9
% 10
0,5
%
United
States
America
131
2,0%
1
291
0,4%
Chinese
Taipeiof(Taiwan)
84
1,3%
9 1136413
783 256
895
3,4%
Miscellaneous
1134
17,2
%
0,4
%
Croatia
33
0,5%
867
0,2%
Korea (South)
116
1,8%
9 552
637
972
3,3%
Pass./Ferry
175
2,7
%
484395
0,2
%
Singapore
84
1,3%
318
0,1%
Monaco
128
1,9%
9 414
460
264
3,3%
Reefer
9
0,1
%
68060
0,0
%
Others
1342
20,4%
3 251
1,1%
3631
55,2%
116 027
531
36,1%
0,0 % 105
0,0
%
Grand Total
6575
100,0%
071 802
100,0%
100,0
% 291
291071802
100,0
%
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2009 vs 2015?
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2015 World Economy – 4 drivers
1. Uneven global growth

World – 3.5% 3.3%
 advanced world - 2.4%
2.1%

developing world - 4.3%
4.2%
2. Weak banks and high debt

public, household, corporate, bank debt

interest rates low

relaxed fiscal policy
3. Low oil prices

always good news for oil importers

oil exporters will survive
4. Strengthening of the US dollar

substantial help for importing countries

stimulates exporters outside US dollar
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Developed
economies
World
average
Emerging
economies
Commodities
$ 40-ish
$ 55-ish
$ 60-ish
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Drivers
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Drivers
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Weather chart
CRUDE OIL
PRODUCTS
BULKERS
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LPG
LNG
CONTAINERS
OFFSHORE
Contracting
Forecast
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Conclusions
 Our models gradually stop working
 Read between the lines as supply/demand changes directions and forms
 Excess of capacity!
 Reduction in the NB activity, shipyards squeezed, orderbook on a downhill trend
 …but there are many reasons to order new ships, particularly is there is money to
be spent
 Don’t expect the supply/demand calculations to provide you with the accurate
number of new contracts
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Thank You
Jakub Walenkiewicz
[email protected]
www.dnvgl.com
SAFER, SMARTER, GREENER
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