Market outlook for the Singapore bunkering market from 2011 to 2015

• Main Author: Aw, Kavin Weijie
• 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/10356/49265
• Institution: Nanyang Technological University

This research explains the viability of investing in bunker tankers in Singapore from July 2011 to 2015. The research is broken down into 3 parts, with the first 2 volumes analyzing the relationships between demand and supply factors for bunker tankers and Singapore’s market. This research paper, which is the final volume, is the final evaluation based on the relationships observed from the earlier parts. The rates in the freight market are expected to remain stable in the next five years, hence different scenarios are observed. The scenarios includes different operating and capital costs and also weighted average cost of capital (WACC), to give a sensitivity analysis of Net Present Value (NPV). In addition, there is an analysis on breakeven rates in the event of fluctuating freight rates. Based on the similar scenarios as the NPV analysis, but with differing proportion of loan amounts, breakeven freight rates are obtained. It is observed that this market is generally profitable, but NPVs varies with different costs of equity. Hence, for an optimal investment in this market, the best scenario is when operating costs, capital costs and WACCs are at their lowest.