Transcript Shipbuilding - the boom and bust industry

Shipbuilding - the boom and bust industry
by
[email protected]
Manager Research and Projects
OECD Working group on Shipbuilding
Paris 3 December 2009
The boom and bust indsutry
World shipbuilding capacity has to be reduced. The Japanese are
not helping the matter by price cutting to keep their yards busy,
and there should be more cancellations of remaining tanker
deliveries. The banks played a dominant role in financing the
problem, they are the ones to help undo it. The banks
should……recognize that some shipowners – and a lot of
shipyards – should be allowed to go bust. The economist January 1976
During the 1980s more than a hundred shipyards had been
closed. South Koreans, the most competitive of all ship yards of
the time, had lost $250 million in 1986. H Clakson/Martin Stopford
Seaborne crude oil trade
Volume back to the 1970s level
bn tonne-miles
90,000
80,000
70,000
60,000
50,000
+19%
40,000
+36%
30,000
-38%
20,000
10,000
0
1970s
1980s
Source: INTERTANKO, Fearnleys
1990s
EST00s
World GDP and oil demand change
%
11
9
GDP growth - IMF
Oil demand growth - IEA
7
Tonne miles growth - Fearnleys
5
3
1
-1
Source. IMF/BP/IEA/Fearnleys
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
-3
Crisis over?
Stine Bosse
CEO
TryggVesta
A major
Danish
Insurance
Company
I believe that we
are in for another
correction, not as serious as
the previous one, but it will take at
least two years before we see the next upturn.
Source: Dagens Næringsliv
She predicted the
finance crises and
saved her
company for
some 2 billions
DKK in losses
Oil demand, tonne-mile, and tanker fleet indices
155
150
145
140
Oil demand index
Tonne miles crude tanker index
135
Tanker fleet index
130
125
120
115
110
105
Tanker fleet increase
2002-2010: 46%
100
Source: IEA, Fearnleys, INTERTANKO
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
95
Middle East oil production Jan - 00 to Oct- 09
on the Baltic rates
mbd
24
Source. IEA
23
22
Primo Jan 2007
$27,000/day
21
Primo September
2009 $5,000/day
20
8 July 2003 VLCC AGJapan $14,000/day
19
Primo July 2003 VLCC AG-Japan $7000/day
Source: Baltic exchange/INTERTANKO
01/07/09
01/01/09
01/07/08
01/01/08
01/07/07
01/01/07
01/07/06
01/01/06
01/07/05
01/01/05
01/07/04
01/01/04
01/07/03
01/01/03
01/07/02
01/01/02
01/07/01
01/01/01
01/07/00
01/01/00
18
Tanker deliveries, removals - phase out
m dwt
55
45
Deliveries
Phase out
35
Conversion
Demolition
25
Deliveries deletions
15
5
-5
-15
-25
-35
90
91
92
93
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
Growth in tanker fleet since 2000
The fleet will continue to grow even if all SH tankers are
phased out
(Delays in deliveries must be anticipated)
14
15
Year
Investments in shipping
$ bn
250
Tankers
Bulkers
LNG
LPG
Containers
Others
200
150
100
50
0
1996
1997
1998
1999
2000
2001
$253 bn
7 years
2002
2003
2004
2005
2006
2007
2008
$435 bn
$400 bn
4 years
2 years
Total orderbook mid 2009 just under $ 600 bn?
Source: Source: Clarkson World Shipyard Monitor
10m09
Number of tankers used for floating storage
Number
140
17
120
100
VLCCs
Suezmax
LR2/Aframax
LR1/Panamax
61
80
60
12
40
42
20
0
Dec-08
Jan-09
Source: EA Gibson
Feb-09
Mar-09
Apr-09
May-09
Jun-09
Jul-09
Aug-09 Sep-09
Oct-09
Need for new contracts
assuming 4% increase in demand
m dwt
40
35
30
VLCC
Suezmax
25
20
Aframax
Panamax
10 - 59,999 dwt
Average ordering 1999-2008
15
10
5
Assumptions:
•All0SH out by 2010 (questionable)
•Balanced market end 2008 (some slack existed)
2009
2010
2011
2012
2013
2014
2015
2016
•Current orderbook
•24 years life time DH tankers as from 2014/all older cleared by 2013
•Ordering 1999-2008 ranged between 11 and 80 m dwt per year (50 m dwt in 2008)
•4% increase in demand
2017
Worldwide output potential estimates
in m cgt - small and big ships (Aug 09)
m cgt
70
Availability small
60
Availability big
Orderbook small
50
Orderbook big
Deliveries small
40
Deliveries big
30
20
10
0
2005
2006
2007
Source: Worldyards/INTERTANKO
2008
2009
2010
2011
2012
2013
2014
Ahead
• Pressure on prices
– Currency – continued weak $?
– Costs steel plate etc
– Market balance
• No need for additional tanker
orders over the next of years