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Shipbrokers

Shipbrokers. Presentation to INTERTANKO’S CHEMICAL TANKER SEMINAR April 8, 2008 Panama City, RP Soren Wolmar Quincannon Associates, Inc. The Chemical Tanker Market. Development Trends which will influence the market Outlook. Developments Leading to Present Market.

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  1. Shipbrokers Presentation to INTERTANKO’S CHEMICAL TANKER SEMINAR April 8, 2008 Panama City, RP Soren Wolmar Quincannon Associates, Inc.

  2. The Chemical Tanker Market • Development • Trends which will influence the market • Outlook

  3. Developments Leading to Present Market • Increase in cargo volumes, in particular to China • New Regulations: IMO/Marpol, upgrading cargoes • Phasing out single hull vessels • Charterers’ vetting systems • High CPP markets

  4. Developments Leading to Present Market • Consolidation of Owners/Charterers • Anti-trust issues • Undersupply of tonnage in late 1980’s/early 1990’s • Major Owners’ newbuilding programs at or below replacement in 2000’s • Longest lasting high market

  5. TOP 12 PRODUCTS BY VOLUME 2006Upgraded in 2007 by New IMO Rules Palmoil 29.0 Million Tons, upgraded to IMO 2 Methanol 15.0 Million Tons, upgraded to IMO 3 Soybeanoil 10.0 Million Tons, upgraded to IMO 2 Caustic(liq) 8.7 Million Tons, unchanged (IMO 3) Sulfuric Acid 8.2 Million Tons, unchanged (IMO 3) Molasses 7.3 Million Tons, unchanged (none) MEG 5.8 Million Tons, upgraded to IMO 3 MTBE 5.3 Million Tons, upgraded to IMO 3 Xylene 5.1 Million Tons, upgraded to IMO 2 Phosphoric Acid 4.1 Million Tons, unchanged (IMO 3) Ethanol 3.5 Million Tons, unchanged (none) UAN 3.1 Million Tons,upgraded to IMO 3

  6. Future Trend on Tonnage • The chemical tanker fleet is growing • Fleet composition is changing: Smaller vessels, simple/sophisticated Larger vessels mostly simple General: less tanks/segregations • Large owners’ fleet remain constant • Mid size owners growing, new trade routes With 30 vsl + 1998: 4, 2008: 9 • New owners entering market

  7. Supply of Tonnage QA Fleet Review of the approximately 30 owners serving the U.S. market is published each year. The number of owners serving this market varies slightly from year to year. Year Existing vsls/dwt of which +20 new buildings 2001 554/12.0 mill 78/2.0 mill 36/1.0 mill 2002 567/12.3 mill 112/2.6 mill 65/2.0 mill 2003 597/13.5 mill 125/3.1 mill 104/3.1 mill 2004 628/15.0 mill 111/2.8 mill 90/2.3 mill • 680/16.4 mill 111/2.9 mill 128/3.1 mill 2006 680/16.1 mill 125/3.5 mill 154/4.2 mill 2007 699/16.9 mill 114/3.1 mill 173/5.0 mill

  8. Supply of Tonnage Chemical tankers between 1,000 dwt and 50,000 dwt with IMO classification: EXISTING +20 YEARS NEW BUILDINGS Year Vsls/Dwt Vsls/Dwt Vsls/Dwt 2004: 2169/33 mill 625/6.8 mill 320/7.8 mill 2005: 2295/36 mill 663/7.1 mill 475/10.1 mill 2006: 2487/41 mill 738/8.3 mill 523/10.1 mill 2007: 2677/45 mill* 726/8.7 mill 755/16.1 mill

  9. Future Trend on Tonnage • Modifying factors: Availability of finance/credit crunch Delay in delivery of new buildings Cancellation of new buildings

  10. Change in Fleet CompositionChemical Tankers and Tankers for Oil/Chemicals(approximate figures for 2007) Vessel size (dwt) Existing Fleet 20 Years+ New Buildings 1,000 - 5,000 727 304 64* 5,000 - 10,000 617 219 122 10,000 - 20,000 514 89 313 20,000 - 30,000 134 55 25 30,000 - 40,000 340 60 95 40,000 - 50,000 345 35 136 TOTAL 2,677 762 755 *Does not include large number of small vessels being built in China for domestic trade

  11. Future Trends on Cargo • 2007: about 150 mill chemicals/vegoils shipped • Vegoil growing by 7.5% to 10% pa • Chemicals growing by 6% pa

  12. Future Trends on Cargo • Ton/miles: • China, SE Asia and AG will replace U.S. and European production • Chemical ton/miles will be reduced • Bio Diesel, Ethanol and vegoils will increase ton/miles • More emphasize on regional trade, less on deep sea • Recession, less volume, change in direction

  13. Other Factors Impacting Market • Chemical tanker/clean tanker market interaction • Future restriction on last cargoes • Political turmoil • Weather related production interruption • Port congestion

  14. Example of Weather Related Market Interruptions Hurricane Katrina

  15. Outlook • More vessels/capacity • More owners competing • Declining or steady ton/miles • Turning point in the market • The end of the longest lasting high market • Open questions: • Recession, declining cargo volumes • New building prices/steel prices • Chinese shipbuilding policy in low market

  16. Shipbrokers Thank you

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