April 11-13, 2011 Cairo Marriott Hotel, Egypt
Ammonia Freight Market Developments
Miss. Nichola Williams Director, Clarksons Gas Department
UK
Ammonia Freight Market Developments Nicola Williams Clarksons Gas Department www.clarksons.com
3rd February 2011 www.clarksons.com
Structure of the Ammonia Carrier Market Main sizes Trading Ammonia LGC’s – Fully Ref Gas Carriers (40-60,000 cbm)
Midsizes ds es – Fully u y Ref e (typically defined as vessels sized from 17-40,000 cbm)
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Structure of the Ammonia Carrier Market ďƒ˜ Some large Semi-Refrigerated units (inc, large Ethylene carriers on occasion)
- A handful of smaller Semi-Refs (Semi-Ref vessels combine some pressure
capability, though less than for a true pressure Type, with a refrigeration system and insulated cargo tanks)
A small number of pressure carriers are also capable of transporting Ammonia for coastal business ďƒ˜
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Ammonia Trading Patterns by Vessel Sizes Liftings by Vessel Size ex Middle East
Liftings by Vessel Size ex Black Sea Larger Midsize
LGC's GC
Handy/Small Midsize
1.8
1.8
1.6
1.6
1.4
1.4
1.2
1.2
Million MT
2.0
1.0 0.8
LGC's
0.8 0.6
0.4
0.4
0.2
0.2
0.0
Larger Midsize
1.0
0.6
B.Sea-US
B.Sea-Euro
B.Sea-N.Af
B.Sea-East
M.East-India
M.East-Asia
M.East-West
'09
'08
'07
'09
'08
'07
'09
'08
'07
'09
'08
'07
'09
'08
'07
'09
'08
'07
'09
'08
'07
'09
'08
0.0
'07
Million MT
Handy/Small /S Midsize 2.0
M.E-M.E/Af
Source: Fertecon www.clarksons.com
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Change in Key Seaborne Ammonia Routes 2009 Trade Flows
M .Eaast-A fr
M .Eastt-W est
B.Seaa-East
Caribs-EuroM ed & N.A f
N .Af-O Others
N .Af-Euro o/Turk
C IS-U S
B .Sea-EuroM ed & N.A f
M .East-Asia/A Austal
L.A Am-US
Intra-A sia/A A ustal
5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0
M.Ea st-Afr
M.East-West
B.Sea a-East
Caribs-EuroMed & N.Af
N.Af-O Others
N.Af-Euro o/Turk
CIIS-US
B.Sea-EuroMed & N.Af
M.East-Asia/A Austal
L.A m-US
M illion M T
5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Austal Intra-Asia/A
Million MT
2008 Trade Flows
Source: Fertecon www.clarksons.com
Freights Across Size Sectors ● LGC TC rates traditionally at a premium to
2008 2009 2010 Ytd 2011
1400 1200 1000
LGC Midsize Handysize Average
800 600 400 200 J an-00 J un-00 D ec -00 M ay -01 N ov -01 A p r -0 2 O c t- 0 2 M a r- 0 3 S e p -0 3 F eb-04 A u g -0 4 J an-05 J u l- 0 5 D ec -05 J un-06 D ec -06 M ay -07 N ov -07 A p r -0 8 O c t- 0 8 M a r- 0 9 S e p -0 9 F eb-10 A u g -1 0 J an-11
●
Assessed 12 Month TC levels
$ '000 pc m
●
the smaller units. Freights g peaked p end ’05/early ’06 supported by a wave of Ammonia Yuzhnyy-US. The downward correction accelerated 2H’08 as VLGC rates collapsed and as trade declined. Freights started to creep up in 2010 The Midsizes also peaked late’05/early ‘06 supported by limited fleet growth & healthy demand. Freights fell, thereafter with levels collapsing from 4Q’08, especially in Ammonia, as newbuilding deliveries coincided with a contraction in trade. Some recovery witnessed from 2H10 Handysize rates have shown some more resilience, with the erosion proving less dramatic as Petchem trade helped support trading opportunities
Source: Clarksons
www.clarksons.com
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Main Gas Carrier Trades In 2009 Total Trade = 78.3 m mt
In 2010 Est. Total Trade = 81.4 m mt
2009
2010
9%
10%
LPG
21%
20%
Ammonia 70%
70%
Petchems
Ammonia is a very important source of employment for the LGC’s & Midsizes, but LPG accounts for the largest volume of trade
www.clarksons.com
Trade Growth Delayed… Projected Trade Growth 2006
Ammonia
Petchems
80 70
60
60
50
50 40
End Year
* Projected volumes
2009
2002
2010*
2009*
2008*
2007*
2005
2006*
0
2004
10
0 2003
20
10
2010*
30
20
2008
30
2006
40
2003
Million MT
70
2002
Million MT
LPG
2007
Petchems
2005
Ammonia
80
2004
LPG
Actual Trade Growth as of end 2010
End Year
* Est end year volume
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LGC Fleet profile at a glance…. Forward Fleet development – 40-60,000 cbm Fully-Ref Age Profile – start 2011 Scrap
Deliveries
Fleet (number)
6
30
25
2 20 0 15 -2 10
25 ys +
8%
Fleet - number of vessels
9%
28%
20-24 yrs 9%
15-19 yrs
-4
5-9 yrs
46%
<5 yrs
2015
2015
2013
2012
2011
0 2010
-8 2009
5
2008
-6
2007
essels scrapped/delivered no of ve
4
www.clarksons.com
….Midsize Fleet growth Forward Fleet development – 17-40,000 cbm Fully-Ref Age Profile – start 2011 Scrap
65 2 60 0
55
45
-6
40 2015
50
-4
2014
-2
2013
<5 yrs
70
4
2012
5-9 yrs
75
6
2011
23%
10-14 yrs
80
2010
8%
85
8
2009
9%
90
10
2008
15-19 yrs
Fleet (number)
Fleet - number of vessels
14%
37%
20-24 yrs
no of ves ssels scrapped/delivered
9%
Deliveries
12
2007
25 ys +
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Semi-Refs also trade in NH3 Forward Fleet development - Semi-Ref Fleet 15-24,999 cbm+ (inc. Ethylene) S Scrap
D li i Deliveries
Fl t (number) Fleet ( b )
Age Profile – start 2011
70
12
60
8 6
50
4 2
40
0 -2
25 ys +
Fleet - number of vessels
no off vessels scrapped/delivered
10 14%
20-24 yrs 8%
38%
15-19 yrs 10%
10-14 yrs 7%
30
23%
5-9 yrs
-4
This sector ideally seeks employment in Petchems trade
2015
2014
2013
2012
2011
2010
2009
2008
20 2007
-6
<5 yrs
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Ammonia Export Growth Europe
CIS
Africa
M East M.East
Asia
Americas
20 18 16 14 12 10 8 6 4 2
15 20
10 20
05
0 20
East in 2009 ● For 2010, balance shifted West again with growth in FSU & North African exports ● Export volumes will continue to recover going forward ● Longer term, fundamental shift hift away from f “traditional” “t diti l” key exporters. Increased Middle Eastern (‘11) and North African (’10/‘12) supply focus
Exports by Region
'000 MT
● Activity mainly focused in the
Data source: Fertecon
www.clarksons.com
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Ammonia Import Growth ● US imports from the Black
Imports by Region Europe
Africa
M.East
Asia/East
US
Sea recovered from 2009 lows of 0.5 m mt, but remained weak at an est.0.8 m mt. Softer Nat Gas prices have helped support Domestic production ● Asian/Australasian import volumes expanded in 2010, rising to over 5 m mt ● Most of the growth in import demand is expected to originate from Asia and also Africa
L.America
20 18 16
'000 MT
14 12 10 8 6 4 2
20 15
20 10
20 05
0
Data source: Fertecon
www.clarksons.com
LPG & Petchem Gas Trade Outlook LPG Trade Projections through 2015 Middle East
Africa
Americas
Asia
Australasia
Ethylene
North Sea
Propylene
Butadiene
% Change
6
8
4
6
2
5 M illio n M T
3
1 0 -1
4 3
-2
1
1.28
1.00
35 1.13
1.19
1.10
0.98 3.33 0.91
0.92
2.84
3.22
3.10
2.97
2.78
2.78
5 1.89
1.79
2.50
2.84
3.07
2.87
2.85
2.90
2.80
2.62
2.27
2015*
2014*
2013*
2012*
2011*
2009
2010*
2008
2007
0 -5
0 2006
15 10
2.07
-3 -4
25 20
2.89
2.66 1.90
30
1.20 1.12
2
2005
Year on Year Change M MT
40 1.28
7
% C hange
5
-10
-1
-15
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Data as of Dec’10 www.clarksons.com
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Factors Shaping Fleet Replenishment Assessed Newbuilding g Prices
1400 1300 1200 1100 1000 900 800 700 600 500 400 300 200
100 Handy (22-24 k F/R) Midsize F/R LGC
90 80
Japan Steel Plate price
$ Million
70 60 50 40 30 20 10
Source: Clarksons
2010-01
2008-01
2006-01
2004-01
2002-01
2000-01
1998-01
1996-01
1994-01
1992-01
1990-01
1988-01
1986-01
1984-01
1982-01
1980-01
0 1999-08 2000-02 2000-08 2001-02 2001-08 2002-02 2002-08 2003-02 2003-08 2004-02 2004-08 2005-02 2005-08 2006-02 2006-08 2007-02 2007-08 2008-02 2008-08 2009-02 2009-08 2010-02 2010-08 2011-02
$/Tonne
Steel Prices
Source: Clarksons
www.clarksons.com
Market Summary & Prospects ● The Freight market pressured from the combined impact of newbuilding deliveries & a contraction in trade
● In 2010/early 2011, the market has shown some upside as trade ● ● ● ●
volumes have recovered. However, there are remaining newbuildings to be absorbed into the Mid & Handysize fleets Some length expected to persist in the near to medium term, but the demand/supply balance will start to tighten as volumes grow and as the number of vessel deliveries shrink Upward pressure on freights expected to accelerate from 2012, but future newbuildings a consideration, as are any interruptions to export growth External pressures likely also to have an impact on freights and changes in trading patterns could also impact tonne-mile demand An opportune time to start to formulate a freight and marketing strategy before the market dynamics start to change www.clarksons.com
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Disclaimer THIS PRESENTATION IS CONFIDENTIAL AND IS SOLELY FOR THE USE OF THE RECEPIENT . NEITHER THE WHOLE NOR ANY PART OF THE INFORMATION CONTAINED IN THE PRESENTATION MAY BE DISCLOSED TO, OR USED OR RELIED UPON BY, ANY OTHER PERSON OR USED FOR ANY OTHER PURPOSE WITHOUT THE PRIOR WRITTEN CONSENT OF H. CLARKSON & CO. LTD (CLARKSONS). THE INFORMATION CONTAINED IN THE PRESENTATION, AND UPON WHICH THE PRESENTATION IS BASED, HAS BEEN DERIVED FROM PUBLICLY AVAILABLE INFORMATION. NONE OF THE INFORMATION ON WHICH THE PRESENTATION IS BASED HAS BEEN INDEPENDENTLY VERIFIED BY ANY MEMBER OF CLARKSONS NOR ANY OF ITS CONNECTED PERSONS. ACCORDINGLY, NO MEMBER OF CLARKSONS NOR ANY OF ITS CONNECTED PERSONS MAKE ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO THE ACCURACY OF THE INFORMATION CONTAINED IN THE PRESENTATION, OR ON WHICH THE PRESENTATION IS BASED, OR THAT THIS INFORMATION REMAINS UNCHANGED AFTER THE ISSUE OF THE PRESENTATION. THE PRESENTATION IS NOT TO BE CONSTRUED AS CARRYING THE ENDORSEMENT OF CLARKSONS OR ANY OF ITS CONNECTED PERSONS. CONSEQUENTLY, NEITHER CLARKSONS NOR ANY OF ITS CONNECTED PERSONS CAN BE HELD LIABLE TO ANY PERSON TO WHOM INFORMATION DERIVED FROM THE PRESENTATION IS MADE AVAILABLE FOR THE ACCURACY OF THE INFORMATION CONTAINED IN IT. THE PRESENTATION IS NOT INTENDED TO RECOMMEND ANY STRATEGIC DECISION BY THE COMPANY AND SHOULD NOT BE CONSIDERED AS A RECOMMENDATION SUPPORTING ANY OF THE OPTIONS DISCUSSED HEREIN BYANY MEMBER OF CLARKSONS OR ANY OF ITS CONNECTED PERSONS TO ANY RECIPIENT OF THE INFORMATION. EACH PERSON TO WHOM THE INFORMATION IS MADE AVAILABLE MUST MAKE THEIR OWN INDEPENDENT ASSESSMENT OF THE OPTIONS AVAILABLE. AVAILABLE NOTHING IN THE PRESENTATION IS, OR SHOULD BE RELIED UPON AS, A PROMISE OR REPRESENTATION AS TO THE FUTURE. IN THIS NOTICE, ‘CONNECTED PERSONS’ MEANS, IN RELATION TO CLARKSONS, ITS HOLDING COMPANY, THE SHAREHOLDERS, SUBSIDIARIES AND SUBSIDIARY UNDERTAKINGS OF ITS HOLDING COMPANY AND THE RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS OF EACH OF THEM H. CLARKSON & CO. LTD ST. MAGNUS HOUSE, 3 LOWER THAMES STREET, LONDON, EC3R 6HE TELEPHONE +44 (0) 207-334-5420
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