Similar to PowerLogistics Asia 2013-"Supply and Demand of Heavy Lift Ships and Its Impact On Shipping Rates" - Rufus Frere-Smith, Blue Stream Marine (20)
3. Dry Bulk Indices 1985 – 2013 – Some historical
Perspective …
GFC
ORDER BOOM
4. Daily Freight Index – July 2007 – Oct(Ocean Transport)
Recent Project Experience 2013
5. History repeats itself…
Shipping is a cyclical industry.
Newbuilding orders were made on the back of
a record breaking boom.
Downturn came with an unprecedented bang
in the wake of the GFC
Too much supply will always lead to
deterioration in rates.
Shipping is a commodity but specialist heavy
lift – especially at the higher end – requires
engineering and risk management – which
commands a premium.
6. H/L Liner Fleet at 2.12m dwt as@ Oct 2013
Min lifting capacity 300mt
Trend is increasing lifting cap from 300-500t in
late 90’s to 700-900t in 2010’s
DWT capacity also trending up
11. Market Trends
Fleet renewal over past 5 years slowing.
Entry of Capital Fund Managers into shipping
markets.
Trend towards consolidation amongst carriers
driven by market downturn and need to
improve prospects.
Fewer Carriers will lead to greater control and
leverage of rates towards higher levels.
12.
13. Global EPC Feed Projects – Energy & Power
Sector 2014 - 2017
15. Snapshot Indiua 2014 – 2019 Confirmed EPC Projects
India Projects 2014 - 2020 (Upstream, Power, Renewables, Midstream, Downstream confirmed)
120,000
100,000
80,000
60,000
40,000
20,000
Source: EIC, Upstream
0
2014
2015
2016
2017
2018
2019
2020
ALE Heavy Lift, SE Asia Marine Business Strategy 2013
16. Conclusions on Project Demand
Global Project Demand remains solid.
External shocks in 2011 / 12 – i.e., Arab Sping
- put dampener on project development in
MENA region.
Positive developments in US-Iran relations
Still some concern on situation in MENA i.e.,
Syria, Egypt, Libya
Liquidity coming back to Finance sector which
is good for projects.
17. Conclusion: Supply v Demand
Downward pressure on shipping rates has mostly
been caused by significant over capacity / over
supply and fleet expansion in H/L sector.
Significant financial pressure forced restructure and
collapse of some shipping co’s.
Entrance into the market by Capital Funds and
Venture Capital has led to sector consolidation.
Consolidaiton to continue leading to fewer players
and greater market control.
Project Demand is steady and with liquidity coming
back into the financial sector will create further
opportunities for energy and infrastructure projects.
External shocks must always be taken into account!
Rates to gradually rebound end 2014 with pick up
2015/2017.