Prepared by Dr. Mariniki PSIFIA, 2016
The VLGC Market
Latsco Shipping Limited
Prepared for the IMSF, ALBA, Athens, May 2016
Presented by Dr. Mariniki Psifia, Market Analyst Latsco Shipping Limited IMSF Forum (9th – 11th May 2016)
The VLGC Market Prepared for the IMSF, ALBA, Athens, May 2016 - - PowerPoint PPT Presentation
Latsco Shipping Limited The VLGC Market Prepared for the IMSF, ALBA, Athens, May 2016 Presented by Dr. Mariniki Psifia, Market Analyst Latsco Shipping Limited IMSF Forum (9 th 11 th May 2016) Prepared by Dr. Mariniki PSIFIA, 2016
Prepared by Dr. Mariniki PSIFIA, 2016
Latsco Shipping Limited
Presented by Dr. Mariniki Psifia, Market Analyst Latsco Shipping Limited IMSF Forum (9th – 11th May 2016)
Prepared by Dr. Mariniki PSIFIA, 2016
This presentation (including any oral presentation) (the “presentation”) is intended solely for the purposes of the IMS Forum 2016 and its
person at any time without the prior written consent of Dr. Mariniki Psifia. Without prejudice to the generality of the foregoing, this presentation may not be published, distributed or transmitted by any means or media, directly or indirectly, in whole or in part, in or into the United States. This presentation is for information purposes only. The information and opinions provided in this presentation are, unless otherwise stated herein, provided as of the date of this presentation and are subject to change. Certain statements are forward- looking statements. The forward-looking statements include statements typically containing the words “intends”, “expects”, “anticipates”, “targets”, “plans”, “estimates” and words of similar import. These forward-looking statements speak only as at the date of this presentation or as otherwise specifically provided herein. The forward-looking statements are based on numerous assumptions and such assumptions may or may not prove to be correct. No one undertakes to update or revise such forward-looking statements. This presentation does not constitute legal, valuation, tax, or financial consulting advice, nor is it a statement on the performance, management capability or future potential (good or bad) of the company(ies), industry(ies), product(s), region(s) or country(ies) discussed. Those interested in specific guidance for shipping, legal, strategic, and/or financial or accounting matters should seek competent professional assistance from their own advisors. Any commentary, observation or discussion contained in this presentation about a country, industry or company does not constitute a recommendation to buy or sell company shares or make investment decisions. Although the statements in this presentation are derived from or based upon various and credible information sources and/or economic models that the author believes to be reliable, the author does not guarantee their accuracy, reliability, or quality, and any such information, or resulting analyses, may be incomplete, rounded, inaccurate or condensed. All estimates included in this presentation are subject to change without notice. This presentation is for informational purposes only and may or may not be intended as a recommendation to invest or an offer or solicitation with respect to the purchase or sale of a security, stock, limited partnership instrument, or financial vehicle. This presentation reflects the views of its author and not of any one else (including of any former or current employer).
Prepared by Dr. Mariniki PSIFIA, 2016
Prepared by Dr. Mariniki PSIFIA, 2016
Natural Gas well Gas Plant Pipeline Power Generation
LNG liquefaction
LNG Residential / Commercial
Petrochemical gases
Industrial Auto Oil well Refinery Further refining Chemicals Agricultural
User Sources Transport
LPG
Dirty Products
Processing industries
Natural Gas LPG Ammonia Condensates (CPP) Clean Products
Source: Various
Prepared by Dr. Mariniki PSIFIA, 2016
Source: The Baltic Exchange
Prepared by Dr. Mariniki PSIFIA, 2016
U.S. Exports of Propane and Propylene are expected to hit unprecedented levels by 2017 due to additional export projects
Source: U.S. E.I.A, 2016
Prepared by Dr. Mariniki PSIFIA, 2016
Data Source: GTIS, IHS
Prepared by Dr. Mariniki PSIFIA, 2016
Data Source: Clarksons SIN, Platts LPGaswire, Factsset, GTIS, IHS
Prepared by Dr. Mariniki PSIFIA, 2016
Prepared by Dr. Mariniki PSIFIA, 2016
Prepared by Dr. Mariniki PSIFIA, 2016
Propane Mont Belvieu vs WTI WTI vs Henry Hub Natural Gas Propane Mont Belvieu vs Henry Hub Natural Gas
Prepared by Dr. Mariniki PSIFIA, 2016
200,0 250,0 300,0 350,0 400,0 450,0 500,0 550,0 600,0 650,0 700,0 750,0 800,0 850,0 900,0 950,0 1 000,0
Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16
$/mt FOB Houston FOB Arab Gulf
($125) ($100) ($75) ($50) ($25) $0 $25 $50 $75 $100 $125 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 ARB OPEN ARB CLOSED
0,0% 10,0% 20,0% 30,0% 40,0% 50,0% 60,0% 70,0% Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Houston to Japan AG to Japan
The West- East Arb FOB Propane Houston vs Arab Gulf Percentage of the Freight element to Japan CFR Price
Data Source: FactSet, Platts
Prepared by Dr. Mariniki PSIFIA, 2016
Data Source: FactSet, Platts, GTIS
Prepared by Dr. Mariniki PSIFIA, 2016
Prepared by Dr. Mariniki PSIFIA, 2016
Freight: AG-Chiba / Houston - Chiba VLGC Net Timecharter Rates
Source: The Baltic Exchange
Prepared by Dr. Mariniki PSIFIA, 2016
2002-des; $400,0
2015-jul; $2 219,0 2016-apr; $816,0 $1 257,9 $938,9 250 500 750 1 000 1 250 1 500 1 750 2 000 2 250
Oct-95 Oct-96 Oct-97 Oct-98 Oct-99 Oct-00 Oct-01 Oct-02 Oct-03 Oct-04 Oct-05 Oct-06 Oct-07 Oct-08 Oct-09 Oct-10 Oct-11 Oct-12 Oct-13 Oct-14 Oct-15 Oct-16 Oct-17 Oct-18
,000 per Month
1 Yr Time-Charter 5 years average 10 years average
$4 038,8 $704,0 $1 646,9 $1 174,8 500 1 000 1 500 2 000 2 500 3 000 3 500 4 000 4 500 Jan-08 Aug-08 Mar-09 Oct-09 May-10 Dec-10 Jul-11 Feb-12 Sep-12 Apr-13 Nov-13 Jun-14 Jan-15 Aug-15 Mar-16 Oct-16 May-17 Dec-17 Jul-18 ,000 per Month 82/84K CBM LPG TCE 5 years average 8 years average
1 Year VLGC TC Rates decreased by 63.2% since Jul. 15 84,000 cbm LPG TC Equivalent decreased by 84% since Jul15
Source: Clarksons SIN
Prepared by Dr. Mariniki PSIFIA, 2016
0,0% 10,0% 20,0% 30,0% 40,0% 50,0% 60,0% 70,0% 80,0% 90,0% 100,0% Dec-02 Apr-03 Aug-03 Dec-03 Apr-04 Aug-04 Dec-04 Apr-05 Aug-05 Dec-05 Apr-06 Aug-06 Dec-06 Apr-07 Aug-07 Dec-07 Apr-08 Aug-08 Dec-08 Apr-09 Aug-09 Dec-09 Apr-10 Aug-10 Dec-10 Apr-11 Aug-11 Dec-11 Apr-12 Aug-12 Dec-12 Apr-13 Aug-13 Dec-13 Apr-14 Aug-14 Dec-14 Apr-15 Aug-15 Dec-15 Apr-16
Bunkers Cost to Gross TCE ~ Ratio
Prepared by Dr. Mariniki PSIFIA, 2016
Prepared by Dr. Mariniki PSIFIA, 2016
For 2016 LPG exports are expected to increase by 12% to 82 mio mt
Major LPG Importers Major LPG Exporters
Data Source: GTIS. ^forecasting as per various sources
Prepared by Dr. Mariniki PSIFIA, 2016
Data Source: GTIS. * Preliminary data as per data collection on 4th May 2016
Prepared by Dr. Mariniki PSIFIA, 2016
Data Source: GTIS - IHS, May 2016
Prepared by Dr. Mariniki PSIFIA, 2016
6,81 7,37 11,69 16,00 1,88 5,1 6,70 6,70 3,40 6,20 6,20 6,20 6,20 6,20 4,25 5 10 15 20 25 30 35 40 45 50 2013 2014 2015 2016 2017 2018 2019 2020 Mio MT KinderMorgan Sage Phillips 66 Oxy Sunoco DCP Petredec/Martin Gas Trafigura Sunoco/MarkWest PetroGas Targa Enterprise
Estimated North America LPG Export Volume Capacities
US LPG Export Scenarios based on Terminal Capacity VLGC Estimated Liftings from Targa and Enterprise, TX (mio mt)
Data Source: GTIS / IHS. Lifting data are from AIS
26,16 19,69 37,14 26,00 27,95 29,71 15 20 25 30 35 40
Terminal Capacity Exports 70.0% 75.3% 80.0% 2015 Terminal Capacity 2016 2016 Export Scenarios (% of Terminal Capacity)
Terminal utilization 75.3%
0,40 0,60 0,80 1,00 1,20 J-14 F-14 M-14 A-14 M-14 J-14 J-14 A-14 S-14 O-14 N-14 D-14 J-15 F-15 M-15 A-15 M-15 J-15 J-15 A-15 S-15 O-15 N-15 D-15 J-16 F-16
Mio Mt
2015: On average 18.6 liftings per month
2014: On average 18.2 liftings per month
Prepared by Dr. Mariniki PSIFIA, 2016
Split between Long-Haul and Short-Haul Importers Who has exported the most during Q1-2015 & Q1-2016 Middle East LPG Exports y/y comparison in mio mt* AG to China: +15.6% y/y
0,02 1,18 0,95 2,43 1,39 3,23
0,01 0,73 0,77 1,95 0,86 2,71
0,00 0,50 1,00 1,50 2,00 2,50 3,00 3,50
Bahrain Iran Kuwait Qatar Saudi Arabia UAE Mio mt [Q1-2015] [Q1-2016]
70% 65% 60% 56% 51% 37% 31% 40% 22% 24% 30% 35% 40% 44% 49% 63% 69% 60%
0 % 10 % 20 % 30 % 40 % 50 % 60 % 70 % 80 % 90 % 100 %
2007 2008 2009 2010 2011 2012 2013 2014 2015 3M-2016
Long-Haul Short-Haul 2014 2015 y-o-y 3M-2015 3M-2016 y-o-y China 7.79 10.91 39.9% 2.24 2.59 15.6% India 7.51 8.28 10.3% 2.03 0.77
Japan 8.20 7.99
2.62 2.32
Indonesia 3.23 3.84 18.8% 0.84 0.63
Korea, South 3.77 3.08
0.88 0.47
Thailand 1.79 1.30
0.34 0.21
Other 0.917 1.04 13.7% 0.25 0.05
Total* 33.21 36.44 9.7% 9.20 7.03
Data Source: GTIS. * Preliminary data as per data collection on 4th May 2016
Prepared by Dr. Mariniki PSIFIA, 2016
0,23 0,52 0,40 0,63
1,58 2,52 2,89 3,74 2,31 0,71 2,81 3,74 0,71
1 2 3 4 5 6 7 8 9 10
2008 2009 2010 2011 2012 2013 2014 2015 2016 (f) 2017 (f) 2018 (f) 2019 (f) 2020 (f)
mio MT Other Middle East Asia & Oceania Africa
The South Pars fields Iran LPG Historical and Future Estimated Exports The South Pars Development Plans
Data Source: GTIS and Information from 10th LPG Trade Summit, Istanbul 2015, FGE. Prepared by Dr. Mariniki Psifia
Natural gas production from South Pars is critical to meet increasing domestic consumption and Iran’s current & future export obligations
Prepared by Dr. Mariniki PSIFIA, 2016
Data: GTIS / HIS. 2016^: 3M-2016
0,60 0,54 0,60 0,41 0,63 0,82 1,09 3,69 5,04 1,31 0,38 1,14 1,21 0,77 0,44 2,56 3,58 0,68 0,77 3,57 1,19 0,73 0,59 1,47 1,21 1,06 0,99 1,48 1,78 2,49 1,01 0,0 2,0 4,0 6,0 8,0 10,0 12,0 14,0 16,0 18,0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016^ Mio mt UAE Iran Kuwait USA Saudi Arabia Other
Africa 8,66% Asia & Oceania 3,04% Eurasia 0,05% Europe 1,98% Middle East 50,11% North America 36,16%
Prepared by Dr. Mariniki PSIFIA, 2016
2014-2015 Monthly Indian LPG Imports Yearly Indian LPG Imports Propane and Butane split
1,71 2,11 3,42 3,67 0,41 0,26 0,38 0,32 1,06 1,22 1,11 1,60 1,61 1,25 1,44 1,26 1,60 1,76 1,30 1,42 1,55 2,22 0,23 0,30 0,27 0,45 0,63 0,99 0,78 0,86 0,75
1 2 3 4 5 6 7 8 9
2007 2008 2009 2010 2011 2012 2013 2014 2015 Mio mt Qatar United Arab Emirates Saudi Arabia Kuwait Bahrain Iran Other 0,3 0,4 0,5 0,6 0,7 0,8 0,9 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Mio mt [Imp 2014] [Imp 2015]
Data Source: GTIS/IHS
0 % 10 % 20 % 30 % 40 % 50 % 60 % 70 % 80 % 90 % 100 % J-15 F-15 M-15 A-15 M-15 J-15 J-15 A-15 S-15 O-15 N-15 D-15 Butane Propane
Prepared by Dr. Mariniki PSIFIA, 2016
Prepared by Dr. Mariniki PSIFIA, 2016
it is expected to exceed the 34.17% by June 2016.
fleet in cu.m terms currently on order (65 vessels).
delivered and 3 new VLGC orders were placed to the shipyards VLGC Supply Growth* in number of vessels
Source: Clarksons. * Slippage and Cancellations are not included
Deliveries and Orderbook in number of vessels
6 2 11 3 1 2 1 1 1 1 2 3 4 5 6 7 8 9 10 11 12
J- 16 F - 16 M- 16 A - 16 M- 16 J- 16 J- 16 A - 16 S - 16 O- 16 N- 16 D- 16
VLGC LGC MGC HGC
25 24 11 3 2 11 24 2 8 24 1 10 20 30 40 50 60 70 80 MA I.16 2017 2018 2019 2020 VLGC LGC MGC HGC 106 110 130 137 140 140 142 155 163 198 220 245 269 280 25 24 11 3 2015; 21,5% 2016; 23,7%
0% 3% 5% 8% 10% 13% 15% 18% 20% 23% 25% 28% 50 75 100 125 150 175 200 225 250 275 300 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 y-o-y growth # of vessels
VLGC Estimated Deliveries y-o-y growth
Prepared by Dr. Mariniki PSIFIA, 2016
Data: Clarksons SIN
The fleet (in number of vessels) Orderbook (in number of vessels) Orderbook - to - Fleet Ratio (in number of vessels)
38 MGC 33 HGC 65 VLGC 98 HGC 2 LGC
Prepared by Dr. Mariniki PSIFIA, 2016
Data: Clarksons SIN
80 62 23 17 20 13 5 10 20 30 40 50 60 70 80 90 0 to 4 5 to 9 10 to 14 15 to 19 20 to 24 25 to 29 30 + # of vessels
VLGC average age is 9.4 years old
VLGC Fleet Profile 38 vessels are older than 20 years old The Fleet
220 25 50 75 100 125 150 175 200 225 250 VLGC
The Orderbook
60 5
40 60 80 100 120 140 160 180 200 VLGC
LPG Ethane Capable
In just 10 years, the average VLGC age fell by 47.7% to less than 9.4 years old
18,0 15,7 14,9 14,3 14,1 13,9 13,0 12,5 10,4 9,40 8,0 10,0 12,0 14,0 16,0 18,0 20,0 2007 2008 2009 2010 2011 2012 2013 2014 2015 Mar-16 Average Age
Fleet As of Start 2016 16.09 198 Deliveries 1.84 22 Demolitions
17.93 220
NET FLEET CHANGE 1.84 22 Orderbook [2016 - 2020] 5.24 65
Orderbook to Fleet 29.2% 29.5%
VLGC ≥ 61,000 cu.M. in million cu.m. in number of vessels
Prepared by Dr. Mariniki PSIFIA, 2016
5 6 8 6 1 2 3 2
5 7 3 8 2 3 7 11 27 12 9 3 2 13 8 35 22 25 3 20 11 3 1 2
10 15 20 25 30 35 40 45 50 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 NUMBER OF VESSELS YEAR OF BUILT
VLGC Fleet [Contract Year 2014] [Contract Year 2015] [Contract Year 2016]
Source: Clarksons SIN
Prepared by Dr. Mariniki PSIFIA, 2016
Hyundai; 27; 49,1% Jiangnan SY Group; 4; 7,3% Jiangnan Changxing; 12.5% Kawasaki HI Sakaide; 4.2% MHI Nagasaki; 8; 14,5% Shanghai Waigaoqiao; 2; 3,6% DSIC Offshore; 5; 9,1%
8 11 3 2 15 2 2 1 4 2 1 2 3 2 10 20 30 40
Daewoo (DSME) Hyundai DSIC Offshore Jiangnan SY Group Jiangsu New YZJ Kawasaki HI Sakaide MHI Nagasaki Shanghai Waigaoqiao
2016 2017 2018 2019 2020
The Orderbook per Yard
(in number of vessels)
Scheduled Deliveries per Year
(in number of vessels)
Source: Clarksons SIN
Prepared by Dr. Mariniki PSIFIA, 2016
apr.16; 30,51% 0,0% 5,0% 10,0% 15,0% 20,0% 25,0% 30,0% 35,0%
$0 $10 000 $20 000 $30 000 $40 000 $50 000 $60 000 $70 000 $80 000 $90 000 $100 000 $110 000 $120 000 $130 000 $140 000 des.11 feb.12 apr.12 jun.12 aug.12
des.12 feb.13 apr.13 jun.13 aug.13
des.13 feb.14 apr.14 jun.14 aug.14
des.14 feb.15 apr.15 jun.15 aug.15
des.15 feb.16 apr.16
Y-o-Y Growth $/Day
82K CBM LPG TCE Rates VLGC Growth*
Historical Data: Clarksons SIN. * VLGC Growth in cu.m
Prepared by Dr. Mariniki PSIFIA, 2016
Source: Historical Data Clarksons SIN
Prepared by Dr. Mariniki PSIFIA, 2016