michele francioni ceo rina services s.p.a. shipping and the law - october 2014 why invest in eco...

Michele FRANCIONICEO RINA SERVICES S.p.A.Shipping and the Law - October 2014

Why invest in Eco ships?

IS THIS THE RIGHT TIME FOR INVESTING?

INVESTING…

(1)

Sources: Banchero Costa research “Dry Bulk Market Update”

SHIP SUPPLY - BULK CARRIER

Sources: Banchero Costa research “The Product Tanker Market”

SHIP SUPPLY - PRODUCT TANKER

World fleet (mill. dwt)

2007 2008 2009 2010 2011 2012 2013 2014 (f) -

200

400

600

800

1,000

1,200

1,400

Tanker Bulker

CAGR ’12-’14: + 3.7%

WORLD SHIP SUPPLY

Sources: Clarkson “World Fleet Monitor”

CAGR BULK ’12-’14: + 5%

CAGR TANKER ’12-’14: + 1.8%

2007 2008 2009 2010 2011 2012 2013 2014 (f)0

1000

2000

3000

4000

5000

6000

7000

8000

Liquid Bulk

WORLD SHIP DEMAND

Sources: Clarkson “Oil and Tanker Trade outlook”, “Dry Bulk Trade outlook”, “Shipping Intelligence Network”

Seaborne trade (mill. tons)

CAGR ’12-’14: + 3.4%

CAGR BULK ’12-’14: + 4.9%

CAGR TANKER ’12-’14: + 1.1%

CHARTER RATES

1 year time charter tanker (USD) 1 year time charter bulker (USD)

2007 2008 2009 2010 2011 2012 2013 20140

10000

20000

30000

40000

50000

Suezmax Aframax Panamax Handysize

2007 2008 2009 2010 2011 2012 2013 20140

10000

20000

30000

40000

50000

60000

70000

80000

Capesize Panamax Handymax Handysize

Sources: Clarkson “Oil and Tanker Trade outlook”, “Dry Bulk Trade outlook”, “Shipping Intelligence Network”

IS THE GAP SUPPLY/DEMAND GOING TO BE RECOVERED SOON?

IS DEMOLITION ACTUALLY HELPING TO REDUCE THE GAP?

Sources: Banchero Costa research “Dry Bulk Market Update”

New orders growth: 55m dwt in 2012 179m dwt in 2013 66m dwt in 2014 First Quarter

BANKSPRIVATE

EQUITY FUND

Sources: Clarkson “Shipping Review and Outlook”; Lloyd’s List on-line

DO ECO SHIPS OFFER SIGNIFICANT RETURN ON INVESTED CAPITAL?

VS

(1)

PRO ECO SHIP OWNERS

(1)

PRO SECOND-HAND SHIP OWNERS

KEY FACTORS FOR CHOICE

New building prices Second-hand prices Actual fuel saving Availability of good second-hand/resales Operational speed required by the market

ECO SHIP FUEL SAVING, HOW MUCH?

Type Size DWTConvent. Ship -

Average daily fuel oil consumption

(Tons) 2006-2010

Eco Ship - Average daily

fuel oil consumption

(Tons) 2012-2013

Daily Save per

ship (Tons)

% Daily Save

Speed (kn)

Oil Tanker Handysize 40000 29.7 22.3 7.4 25% 14.4

RINA Analysis

IMO – Air emission: 0.1% SOx in ECA 01.01.2015

New and existing ships IMO – Air emission: -10% CO2 EEDI 01.01.2015 (2020 & 2025)

New ships IMO – Air emission – NOx in ECA 01.01.2016

New ships IMO – GBS

01.07.2016New ships

IMO – Ballast Water Treatmentnot yet into forceNew and existing ships

REGULATORY FACTORS

SULPHUR OXIDES (SOX) Exhaust gas cleaning systems (scrubbers)

Nitrous Oxides (NOX) SCR - Selective Catalytic Reduction

Ballast Water Convention BWTS

NEW ECO FEATURES : Is it worth investing?

An holistic approach is needed

Regulation

Financial Issues

Technical Solutions

Laws & Authorizations

Logistic Scenario

Social Perception

IS LNG A SOLUTION?

The key to success in the risk/return game is not to minimize or maximize risk but to manage risk

Mark A. Johnson

Thank you for your attention!

RINA SERVICES S.p.A.

Via Corsica, 12 16128 Genoa - ItalyPh. +39 010 53851 Fax +39 010 5351000 info@rina.orgwww.rina.org