Ralph Leszczynski

banchero costa (shipbrokers)
MAREFORUM MARITIME ITALY 2009
Tanker Shipping Market Outlook - Where we go next? Ralph Leszczynski 11 May 2009, Sorrento (Italy)
banchero costa research
www.bancosta.it - research@bancosta.it
Legal notice: purposes only.
The information and data contained in this presentation is derived from a
variety of sources, own and third partys, public and private, and is provided for information
Whilst banchero costa has used reasonable efforts to include accurate and up-to-date information in this presentation, banchero costa makes no warranties or representations as to the accuracy of any information contained herein or accuracy or reasonableness of conclusions drawn there from. Although some forward-looking statements are made in the report, banchero costa cannot in any way guarantee their accuracy or reasonableness reasonableness. banchero costa assumes no liabilities or responsibility for any errors or omissions in the content of this report.
The Market
the market h d i d up h wet k has dried
The Baltic Dirty & Clean Tanker Indices (BDTI and BCTI)
(index points, from The Baltic Exchange)
2500
2000
1500
in ndex
1000
500
0 05/2008
07/2008
09/2008
11/2008
01/2009
03/2009
05/2009
Baltic Dirty Tanker Index
Baltic Clean Tanker Index
The Baltic Dirty & Clean Tanker Indices (BDTI and BCTI)
3500 3000 2500 2000 1500 1000 500 0 05/1999
in ndex
05/2000
05/2001
05/2002
05/2003
05/2004
05/2005
05/2006
05/2007
05/2008
05/2009
The Baltic Dry and Tanker Indices (BDI, BDTI & BCTI)
12000 11000 10000 9000 8000 7000
index
6000 5000 4000 3000 2000 1000 0 05/1999 05/2000 05/2001 05/2002 05/2003 05/2004 05/2005 05/2006 05/2007 05/2008 05/2009
Baltic Dry Index
Crude Oil Price v. Baltic Dirty Tanker Index y

(timeseries of monthly averages, in usd/bbl and index points)
140 120 100
u usd/bbl
3500 3000 2500 2000 1500 1000 500
80 60 40 20
0 0 04/1999 04/2000 04/2001 04/2002 04/2003 04/2004 04/2005 04/2006 04/2007 04/2008 04/2009
Brent Crude Oil Price
Crude Oil Price v. Baltic Clean Tanker Index

(timeseries of monthly averages, in usd/bbl and index points)
140 120 100 1400
u usd/bbl
2000 1800 1600
80 60 40
1200 1000 800 600
20
400
0 200 04/1999 04/2000 04/2001 04/2002 04/2003 04/2004 04/2005 04/2006 04/2007 04/2008 04/2009
Brent Crude Oil Price
Crude Oil Price v. Baltic Dirty Tanker Index - 1999-2005 1999 2005
(scatterplot of monthly averages, in usd/bbl and index points)
3000
2500
BDT Index TI
2000
1500
y = 47.839x - 42.066 R2 = 0.437
1000
500 0 10 20 30 40 50 60 70 80 90 Brent Crude Oil Price USD/bbl
Crude Oil Price v. Baltic Dirty Tanker Index - 1999-2008 1999 2008
(scatterplot of monthly averages, in usd/bbl and index points)
3000
2500
BDT Index TI
2000 y = 5.331x + 1061.2 R2 = 0.0936
1500
1000
500 0 20 40 60 80 100 120 140 160 Brent Crude Oil Price USD/bbl
VLCC Tanker (200k+ dwt) Newbuilding / 5YO SH Prices ( ) g

(basis modern 300k dwt, estimated monthly avg, in USD mln)
180 160 140 120
u usd mln
100 80 60 40 20 0 03/2000
03/2001
03/2002
03/2003
03/2004
03/2005
03/2006
03/2007
03/2008
03/2009
Newbuilding Price
5 Year Old Second Hand Price
Aframax Tanker (80-120k dwt) Newbuilding/ 5YO SH Prices (80 120k

90 80 70 60
u usd mln
50 40 30 20 10 0 03/2000
03/2001
03/2002
03/2003
03/2004
03/2005
03/2006
03/2007
03/2008
03/2009
Newbuilding Price
MR2 Tanker (40-60k dwt) Newbuilding/ 5YO SH Prices (40 60k

60
50
40
u usd mln
30
20
10
0 03/2000
03/2001
03/2002
03/2003
03/2004
03/2005
03/2006
03/2007
03/2008
03/2009
Newbuilding Price
The Fleet
VLCC Tanker (200,000-350,000 dwt) Age Profile

100
80 num mber of vessels
60
40
20
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
January 2009 J
Scrapped
Trading (SS)
Trading (DS+DB)
Trading (DH)
Newbuilding
2014
VLCC Tanker (200,000-350,000 dwt) (200,000 350,000 Age Profile Pie

26-30 26 30 yrs (79 83) 30 yrs + (< 79) (79-83) 6% 2%
Orderbook/Trading 40%
21-25 yrs (84-88) 4% 16-20 yrs (89-93) 19%
to 04 09) up t 5 yrs (blt 04-09) 25%
11-15 yrs (94-98) 15%

updated: January 2009
6-10 yrs (99-03) 29%
Suezmax Tanker (120,000-199,999 dwt) Age Profile

80 70 60 num mber of vessels 50 40 30 20 10 0
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
January 2009 J
Scrapped or lost
Trading (SS)
Trading (DS+DB)
Trading (DH)
Newbuilding
2012
Suezmax Tanker (120,000-199,999 dwt) ( , , ) Age Profile Pie

26-30 yrs (79-83) 1% 30 yrs + (< 79) 2%
21-25 yrs (84-88) 4% 16-20 yrs (89-93) 17%
up to 5 yrs (blt 04-09) 32%
11-15 yrs (94-98) 16% 6-10 yrs (99-03) 28%

Updated: January 2009
Aframax Tanker (78,000-119,999 dwt) Age Profile

120
100
num mber of vessels
80
60
40
20
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
January 2009 J
Demo
Trading (SS)
Trading (DS+DB)
Trading (DH)
Newbuilding
2012
Aframax Tanker (78,000-119,999 dwt) (78,000 119,999 Age Profile Pie

26-30 yrs (79-83) 3% 30 yrs + (< 79) 0%
21-25 yrs (84-88) 9% 16-20 yrs (89-93) 16%
up to 5 yrs (blt 04-09) 34%
11-15 yrs (94-98) 13%
6-10 yrs (99-03) 25%
Aframax Tanker Trading (78,000-119,999 dwt) g( , , )
Product Carrier 16%
Crude Carrier C d C i 84%
Aframax Tanker Orderbook (78,000-119,999 dwt) ( , , )
Product Carrier 38%
Crude Carrier 62%
updated: January 2009 d d J
MR2 Tanker (42,000-59,999 dwt) Age Profile

240 210 180 num mber of vessels 150 120 90 60 30 0
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
January 2009
Scrapped
Trading (SS)
Trading (DS+DB)
Trading (DH)
Newbuilding
2014
MR2 Tanker (42,000-59,999 dwt) a e (42,000 59,999 Age Profile Pie

21-25 yrs (84-88) 6% 16-20 yrs (89-93) 5% 11-15 yrs (94-98) 10% 26-30 yrs (79-83) 2% 30 yrs + (< 79) 0%
up to 5 yrs (blt 04-09) 57%
6-10 yrs (99-03) 20%
VLCC (200-350,000 dwt) Fleet Growth assuming Current Orderbook and Reasonable Demolition In terms of Number of Units
"Low Demolition" Scenario All units which are currently over 25 Years Old are scrapped before 2012 VLCC (number) ( ) Deliveries Demolitions Net Increase Total Fleet Y-o-Y Growth 2008 2009 60 11 49 639 8.3% 2010 68 11 57 696 8.9% 2011 90 11 79 775 11.4% 2012 19 11 8 783 1.0% Total 237 44 193
590
"High Demolition" Scenario All units which are currently over 20 Years Old are scrapped before 2012
VLCC (number) Deliveries Demolitions Net Increase Total Fleet Y-o-Y Growth
2008
590
2009 60 18 42 632 7.1%
2010 68 18 50 682 7.9%
2011 90 18 72 754 10.6%
2012 19 18 1 755 0.1%
Total 237 72 165
Suezmax (120-200,000 dwt) Fleet Growth assuming Current Orderbook and Reasonable Demolition In terms of Number of Units
"Low Demolition" Scenario All units which are currently over 25 Years Old are scrapped before 2012 Suezmax (number) ( ) Deliveries Demolitions Net Increase Total Fleet Y-o-Y Growth 2008 2009 67 3 64 430 17.5% 2010 47 3 44 474 10.2% 2011 49 3 46 520 9.7% 2012 13 3 10 530 1.9% Total 176 12 164
366
Suezmax (number) Deliveries Demolitions Net Increase Total Fleet Y-o-Y Growth
2008
366
2009 67 6 61 427 16.7%
2010 47 6 41 468 9.6%
2011 49 6 43 511 9.2%
2012 13 6 7 518 1.4%
Total 176 24 152
Aframax (78-120,000 dwt) Fleet Growth assuming Current Orderbook and Reasonable Demolition In terms of Number of Units
"Low Demolition" Scenario All units which are currently over 25 Years Old are scrapped before 2012 Aframax (number) ( ) Deliveries Demolitions Net Increase Total Fleet Y-o-Y Growth 2008 2009 89 8 81 937 9.5% 2010 90 8 82 1019 8.8% 2011 42 8 34 1053 3.3% 2012 3 8 -5 1048 -0.5% Total 224 32 192
856
Aframax (number) Deliveries Demolitions Net Increase Total Fleet Y-o-Y Growth
2008
856
2009 89 28 61 917 7.1%
2010 90 28 62 979 6.8%
2011 42 28 14 993 1.4%
2012 3 28 -25 968 -2.5%
Total 224 112 112
MR2 (42-60,000 dwt) Fleet Growth assuming Current Orderbook and Reasonable Demolition In terms of Number of Units
"Low Demolition" Scenario All units which are currently over 25 Years Old are scrapped before 2012 MR2 (number) ( ) Deliveries Demolitions Net Increase Total Fleet Y-o-Y Growth 2008 2009 205 5 200 981 25.6% 2010 150 5 145 1126 14.8% 2011 85 5 80 1206 7.1% 2012 18 5 13 1219 1.1% Total 458 20 438
781
MR2 (number) Deliveries Demolitions Net Increase Total Fleet Y-o-Y Growth
2008
781
2009 205 18 187 968 23.9%
2010 150 18 132 1100 13.6%
2011 85 18 67 1167 6.1%
2012 18 18 0 1167 0.0%
Total 458 72 386
Demand
World Seaborne Crude Oil Trade

(estimates, in thousand barrels per day)
50000 45000 40000
Thousand barrels daily ds
35000 30000 25000 20000 15000 10000 5000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008
7.1% -3.8% -3.3% 7.8% 6.4% 3.0% 2.4% 2.6% 1.0%
Crude Oil Trade
Y-o-Y Growth
World Seaborne Petroleum Products Trade

(estimates, in thousand barrels per day)
18000 16000 14000
Thousand barrels daily ds
12000 10000 8000 6000 4000 2000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008
6.2% 5.6% 0.9% 0 9% 6.1% 8.2% 8.3% 7.0% 3.3% 3 3% 1.3% 1 3%
Product Trade
Y-o-Y Growth
CHINA /
World's Top 10 Seaborne Oil Importers in 2008 p p

(estimates)
8,000 7,000 6,000

Thousand barrels daily
5,000 4,000 4 000 3,000 2,000 1,000 0

USA Japan China Korea India Italy France Germany Canada Singapore
Share of World Seaborne Oil Imports in 2008

(estimates)
Others 16% Other Asia 7% USA 20%
India 5%
Korea 6%
China 8%
Japan 10%
EU 28%
Seaborne Imports of Iron Ore by Country in 2008

(estimate, all bulkcarriers, as % of volumes in tonnes)
Middle East 3% Others 3%
Western Europe 17%
Japan 19%
China 58%
C a China - Refinery Capacity a d Product Demand e e y Capac ty and oduct e a d

(estimates) 9,000 8,000 7,000 7 000
Thousan barrels daily nd
6,000 5,000 4,000 4 000 3,000 2,000 1,000 0 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008
Refinery Capacity
Product Demand
China - Crude Oil Production and Consumption p

(estimates, in mln tonnes) 400
Chinese oil production and consumption in mln tonnes c
350 300 250 200 150 100 50 0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008(f)
Consumption
Production
China - Comparison of Iron Ore and Crude Oil Imports

(customs data, in million tonnes gross)
500
400
mln ton nnes per year
300
200
100
0 2001 2002 2003 2004 2005 2006 2007 2008(f)
Iron Ore Imports p
Crude Oil Imports p
China - Seaborne Crude Oil Imports

(customs data, in million tonnes gross)
200 180 160 140
millio tonnes on
120 100 80 60
+14% +12% +31% +35%
40 20 0 2001
-8%
+7%
+10%
+3%
2002
2003
2004
2005
2006
2007
2008(f)
Crude Oil Imports p
Y-o-Y Growth
Number of Vehicles per 1000 People over 16 y p p y.o.

(source: abc news) 1,200
USA, 1023
no. of cars every 1000 people over 16 y.o. o 0 y
900
France, 702 Japan, 608

600
300
India , 11
0
China, 9
Crisis? Wh C i i ? C i i ? What Crisis?
The obsession with GDP going for the magic 8 Chinas credit and fiscal situation is better than most countries Total official government debt is approx 20% of GDP Required reserves at banks are high (15%) Property sector cooled down and now being reheated again Power generation -9.6% YoY in Nov 08, in March back to -0.7% YoY
Fixed Asset Investments up 30% YoY in March, up 4.2 ppts from 1Q08 Retail consumption up 16% YoY in March, up from 15.7% in jan-feb 09 jan feb Real income growth 11.2% urban & 8.6% rural in 1Q09 Air passenger traffic up 17% YoY in March Car sales up 8% YoY in March (small cars 22%)
Back to Planet Earth
Aframax Tanker (78,000-119,999 dwt) Age Profile

120
100
num mber of vessels
80
60
40
20
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
January 2009 J
Demo
Trading (SS)
Trading (DS+DB)
Trading (DH)
Newbuilding
2012
MR2 Tanker (42,000-59,999 dwt) Age Profile

240 210 180
num mber of vessels
150 120 90 60 30 0
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
January 2009
Scrapped
Trading (SS)
Trading (DS+DB)
Trading (DH)
Newbuilding
2014
banchero costa
head office - genoa via pammatone, 2 16121 genoa (italy) p phone: + 39.010.5631 - 1 dry c. - cape/pmx dry c. - handy dry c. - operating tankers containers s&p ship finance p
5631-200 5631-200 5631-200 5631-300 5631-515 5631-500 5631-559 capespmx@bancosta.it handy@bancosta.it dryoper@bancosta.it tanker@bancosta.it containers@bancosta.it salepurchase@bancosta.it financial@bancosta.it
derivatives research lng projects agency insurance p&i accounting g bancosta uk london
5631-251 derivatives@bancosta.it 5631-558 research@bancosta.it 5631-554 gas@bancosta.it 5631-600 bcagy@bcagy.it 5631-700 insurance@bancostains.it 5631-775 main.ge@bseag.it 5631-400 account@bcaccount.it
bancosta monaco monte carlo

phone: +377.97.707.497 info@bancosta-monaco.com i f @b t
bancosta geneva geneva

phone: +41.22.37.30.300 info@bancosta.ch i f @b t h
bancosta moscow moscow

phone: +7.095.93.58.535 jivotenko@bancosta.it ji te k @b t it
phone: +44.207.25.63.418 info@bancosta.co.uk i f @b t k
bancosta oriente hong kong

phone: +852.28.651.535 bancosta.oriente@bancosta.com.hk
bancosta oriente singapore

phone: +65.63.27.67.82 bancosta.oriente@bancosta.com.hk
bancosta oriente beijing

phone: +86.10.84.53.49.93 capespmx@bancosta.it

Ralph Leszczynski

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banchero costa (shipbrokers)

MAREFORUM MARITIME ITALY 2009

banchero costa (shipbrokers)

Legal notice: purposes only.

The information and data contained in this presentation is derived from a

banchero costa (shipbrokers)

banchero costa (shipbrokers)

the market h d i d up h wet k has dried

banchero costa (shipbrokers)

Baltic Dirty Tanker Index

Baltic Clean Tanker Index

banchero costa (shipbrokers)

Baltic Dirty Tanker Index

Baltic Clean Tanker Index

banchero costa (shipbrokers)

Baltic Dry Index

Baltic Dirty Tanker Index

Baltic Clean Tanker Index

banchero costa (shipbrokers)

Crude Oil Price v. Baltic Dirty Tanker Index y

3500 3000 2500 2000 1500 1000 500

Brent Crude Oil Price

Baltic Dirty Tanker Index

banchero costa (shipbrokers)

Crude Oil Price v. Baltic Clean Tanker Index

2000 1800 1600

1200 1000 800 600

Brent Crude Oil Price

Baltic Clean Tanker Index

banchero costa (shipbrokers)

y = 47.839x - 42.066 R2 = 0.437

500 0 10 20 30 40 50 60 70 80 90 Brent Crude Oil Price USD/bbl

banchero costa (shipbrokers)

2000 y = 5.331x + 1061.2 R2 = 0.0936

banchero costa (shipbrokers)

VLCC Tanker (200k+ dwt) Newbuilding / 5YO SH Prices ( ) g

5 Year Old Second Hand Price

banchero costa (shipbrokers)

Aframax Tanker (80-120k dwt) Newbuilding/ 5YO SH Prices (80 120k

5 Year Old Second Hand Price

banchero costa (shipbrokers)

MR2 Tanker (40-60k dwt) Newbuilding/ 5YO SH Prices (40 60k

5 Year Old Second Hand Price

banchero costa (shipbrokers)

banchero costa (shipbrokers)

VLCC Tanker (200,000-350,000 dwt) Age Profile

80 num mber of vessels

banchero costa (shipbrokers)

VLCC Tanker (200,000-350,000 dwt) (200,000 350,000 Age Profile Pie

21-25 yrs (84-88) 4% 16-20 yrs (89-93) 19%

to 04 09) up t 5 yrs (blt 04-09) 25%

11-15 yrs (94-98) 15%

6-10 yrs (99-03) 29%

banchero costa (shipbrokers)

Suezmax Tanker (120,000-199,999 dwt) Age Profile

banchero costa (shipbrokers)

Suezmax Tanker (120,000-199,999 dwt) ( , , ) Age Profile Pie

21-25 yrs (84-88) 4% 16-20 yrs (89-93) 17%

up to 5 yrs (blt 04-09) 32%

11-15 yrs (94-98) 16% 6-10 yrs (99-03) 28%

banchero costa (shipbrokers)

Aframax Tanker (78,000-119,999 dwt) Age Profile

num mber of vessels