Outlook of the palm oil tanker market in Asia from 2011-2015

• Main Author: Maria Abdullah.
• Other Authors: School of Civil and Environmental Engineering
• Format: Final Year Project
• Language: English
• Published: 2012
• Subjects: DRNTU::Engineering::Maritime studies::Maritime management and business
• Online Access: http://hdl.handle.net/10356/49239
• Institution: Nanyang Technological University

This report investigates the market fundamentals of demand and supply in the palm oil tanker market in Asia between 2011 and 2015 and proves the feasibility of operating a vessel in the market through ordering a new vessel, buying a 20 year old vessel from the secondhand market or time chartering in a vessel for 5 years. Generally, palm oil has to be carried in IMO II tankers. As such, other major products like petroleum products and ethylene products that could take away supply of these tankers for carrying palm oil were factored in shipping demand. Using the forecasted growth rates of these products, the future tonnage demand was obtained. Future tonnage supply was projected by making a judgement about the orderbook and estimating the number of ships expected for scrapping by fixing a scrapping age. Comparing the demand and supply in ton-miles, the future freight rates are forecasted using a banding method and by observing how future oversupply weighed over demand. An NPV analysis of the gross profits is used to see if it is feasible to invest in entering the palm oil tanker market. The NPV was also subjected to a sensitivity analysis of cargo space utilization.