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

Quincannon Associates Inc.Quincannon Associates Inc.

ShipbrokersShipbrokersPresentation to

INTERTANKO’S CHEMICAL TANKER SEMINAR

April 8, 2008Panama City, RPSoren Wolmar

Quincannon Associates, Inc.


The Chemical Tanker The Chemical Tanker MarketMarket

• Development• Trends which will influence the market• Outlook


Developments Leading to Developments Leading to Present MarketPresent 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


Developments Leading to Developments Leading to Present MarketPresent 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


QUINCANNON ANNUAL RATES5000MT SIMPLE CHEMICALS

1977-2007

0.00

20.00

40.00

60.00

80.00

100.00

120.00

140.00

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

YEARS

AV

ER

AG

E U

SD

PM

T

TRANSPACIFIC

TRANSATLANTIC


QUINCANNON MONTHLY RATES5000MT SIMPLE CHEMICALS

J AN 1999 - MAR 2008

20.00

30.00

40.00

50.00

60.00

70.00

80.00

90.00

100.00

Jan-

99M

ay-9

9Sep

-99

Jan-

00M

ay-0

0Sep

-00

Jan-

01M

ay-0

1Sep

-01

Jan-

02M

ay-0

2Sep

-02

Jan-

03M

ay-0

3Sep

-03

Jan-

04M

ay-0

4Sep

-04

Jan-

05M

ay-0

5Sep

-05

Jan-

06M

ay-0

6Sep

-06

Jan-

07M

ay-0

7Sep

-07

Jan-

08

MONTHS

USD

PM

T

TRANSATLANTIC

TRANSPACIFIC


Atlantic Basin CPP Market Review J une 2001 through March 2008

50

150

250

350

450

550

650

Jun-

01Aug

-01

Oct

-01

Dec-0

1Fe

b-02

Apr-0

2Ju

n-02

Aug-0

2O

ct-0

2Dec

-02

Feb-

03Apr

-03

Jun-

03Aug

-03

Oct

-03

Dec-0

3Fe

b-04

Apr-0

4Ju

n-04

Aug-0

4O

ct-0

4Dec

-04

Feb-

05Apr

-05

Jun-

05Aug

-05

Oct

-05

Dec-0

5Fe

b-06

Apr-0

6Ju

n-06

Aug-0

6O

ct-0

6Dec

-06

Feb-

07Apr

-07

Jun-

07Aug

-07

Oct

-07

Dec-0

7Fe

b-08

Months

Wo

rld

Sca

le

Caribs/USAC - 38,000MT

Cont/USAC - 37,000MT


Quincannon Fleet AnalysisTHE AGE OF CHEMICAL TANKERS (By # Vessels)

28 Fleets Servicing the North America Market - January 2008

0

10

20

30

40

50

60

70

80

1983

& P

rior

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Year Built

# V

esse

ls B

uilt

per

Yea

r


Quincannon Fleet AnalysisTHE AGE OF CHEMICAL TANKERS (By Deadweight)

28 Fleets Servicing the North America Market - January 2008

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

2,000,000

1983

& P

rior

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Year Built

Dea

dw

eig

ht

Bu

ilt p

er Y

ear


Quincannon Fleet AnalysisTONNAGE DISTRIBUTION OF THE LARGEST FLEETS

28 Fleets Servicing the North America Market - January 2008BY NUMBER OF VESSELS

Clipper Wonsild6%

Eitzen Chemical11%

Odfjell Seachem13%

Stolt-Nielsen Transportation

15%Tokyo Marine

8%

Other47%


Quincannon Fleet AnalysisTONNAGE DISTRIBUTION OF THE LARGEST FLEETS

28 Fleets Servicing the North America Market - January 2008BY DEADWEIGHT

Eitzen Chemical9%

Odfjell Seachem14%

Stolt-Nielsen Transportation

16%

Tokyo Marine6%

UCT-UPT United6%

Other49%

Quincannon Associates Inc.Quincannon Associates Inc. TOP 12 PRODUCTS BY VOLUME TOP 12 PRODUCTS BY VOLUME 20062006

Upgraded in 2007 by New IMO Upgraded in 2007 by New IMO RulesRulesPalmoil 29.0 Million Tons, upgraded to IMO 2

Methanol 15.0 Million Tons, upgraded to IMO 3Soybeanoil 10.0 Million Tons, upgraded to IMO 2Caustic(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 3MTBE 5.3 Million Tons, upgraded to IMO 3Xylene 5.1 Million Tons, upgraded to IMO 2Phosphoric Acid 4.1 Million Tons, unchanged (IMO 3)Ethanol 3.5 Million Tons, unchanged

(none)UAN 3.1 Million Tons, upgraded to IMO 3


Future Trend on TonnageFuture Trend on Tonnage• The chemical tanker fleet is growing• Fleet composition is changing:

Smaller vessels, simple/sophisticatedLarger 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


Supply of TonnageSupply of TonnageQA Fleet Review of the approximately 30 owners serving the U.S. marketis published each year. The number of owners serving this market variesslightly 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

2005 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


Supply of Tonnage Supply of Tonnage Chemical tankers between 1,000 dwt and 50,000 dwt with IMOclassification:

EXISTING +20 YEARS NEW BUILDINGSYear 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


Future Trend on TonnageFuture Trend on Tonnage

• Modifying factors:Availability of finance/credit crunchDelay in delivery of new buildingsCancellation of new buildings


Change in Fleet CompositionChange in Fleet CompositionChemical Tankers and Tankers for Chemical Tankers and Tankers for

Oil/ChemicalsOil/Chemicals(approximate figures for 2007)(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 12210,000 - 20,000 514 89 31320,000 - 30,000 134 55 2530,000 - 40,000 340 60 9540,000 - 50,000 345 35 136TOTAL 2,677 762 755

*Does not include large number of small vessels being built in China for domestic trade


Future Trends on CargoFuture Trends on Cargo

• 2007: about 150 mill chemicals/vegoils shipped

• Vegoil growing by 7.5% to 10% pa• Chemicals growing by 6% pa


Future Trends on CargoFuture 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


Other Factors Impacting Other Factors Impacting MarketMarket

• Chemical tanker/clean tanker market interaction

• Future restriction on last cargoes• Political turmoil• Weather related production

interruption• Port congestion


QUINCANNON ASSOCIATESPACIFIC FREIGHT RATES

USG TO FEA & FEA TO USG 5000MTONS SIMPLE CHEMICALS

2005-2007

40

50

60

70

80

90

100

110

120

Dec-0

4

Jan-

05

Feb-0

5

Mar

-05

Apr-0

5

May

-05

Jun-

05

Jul-0

5

Aug-0

5

Sep-0

5

Oct-05

Nov-0

5

Dec-0

5

Jan-

06

Feb-0

6

Mar

-06

Apr-0

6

May

-06

Jun-

06

Jul-0

6

Aug-0

6

Sep-0

6

Oct-06

Nov-0

6

Dec-0

6

Jan-

07

Feb-0

7

Mar

-07

US

$ /

PM

T

USG to FE FE to USG

Example of Weather Related Market Interruptions

Hurricane Katrina


OutlookOutlook• 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


ShipbrokersShipbrokers

Thank you

Documents

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