oils and fats changes and opportunities capt ken tree associate consultant to drewry shipping...
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Oils and fats changes and opportunities
Capt Ken TreeAssociate Consultant to Drewry Shipping
September 2005
Oils and fats changes and opportunities2
Overview & slide references
Oils & fats as organic chemicals (3-4)
Volumes past, present and beyond (5)
Growth drivers - (6-9)
Uses- changes ahead (10-14)
Effect of crude petroleum prices (15)
Previous cargoes – changes/opportunities (16-18)
Comparative earnings (19)
The IMO double hulled future (20)
Oils and fats changes and opportunities3
Oils and fats
Lets call them what they are – Triacylglycerols
They belong to the chemical family of esters their most
important ingredient being triglycerides
Triglycerides are esters of glycerol and oils and fats are mixtures
of triglycerides from various fatty acids
Their chemical and physical properties and the esters derived
from them vary with the individual oils or fats fatty acid profile
Naturally occurring triacylglycerols are all further processed for
further use
Oils and fats changes and opportunities5
0
10
20
30
40
50
60
70
1985 1990 1995 2000 2003 2007
Organics Inorganics Triacylglycerols Others
Forecast seaborne trade of liquid chemicals (1982-2007, mill tons)
Oils and fats changes and opportunities6
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
1970 1980 1990 2000 2010
Europe NAmerica SAmerica Africa China India Others
Main growth drivers - population
Oils and fats changes and opportunities10
Uses - changes ahead
Human nutrition – 80%
Animal Feed – 6 %
Oleo-chemicals – 14%
Bio Fuels (bio-diesel) – to be determined
Oils and fats changes and opportunities11
Oleo - chemical & bio diesel (methyl esters) conventional production technologies
Oils and fats changes and opportunities12
Oleochemical Exports from Malaysia & Indonesia 2004
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
N.Asia S.Asia Europe USA Others
Region
M/tons
Oleo - chemical exports
Oils and fats changes and opportunities16
Previous cargo requirements-oils for edible and/or oleo-chemical use
Oils for Edible and or Oleo-chemical use are presently shipped
using one of the following previous cargo criteria
1. Not on the FOSFA Banned List – (Standard FOSFA
Contract)
2. Immediate Previous cargo on the FOSFA Acceptable List –
(A choice with an AS9 sticker)
3. Immediate Previous cargo on EU 1 or 2 Acceptable List
(Europe)
4. Immediate previous cargo on NIOP 1 or 2 List (USA)
Oils and fats changes and opportunities17
Oleo - chemicals & bio-diesel-previous cargoes
Oleo chemicals fall outside FOSFA-NIOP-EU Hygiene
Legislative & are carried by IMO Class ships
Quality requirements based on other high quality
chemical cargoes between the shippers and owners.
Kosher could be a requirement for glycerine
Methyl Esters used for fuel non edible use last 3 clean
and unleaded same as CPP (Already moving into Europe)
Oils and fats changes and opportunities18
Previous cargo - new approaches?
Stainless steel
– passivation
– recognition of non absorption & ease of cleaning by approved
methods and testing, as with other sensitive chemicals (i.e. Alcohols)
Oils and Fats for non edible use i.e Bio Diesel
Provided strict traceability ensured from origin to end use, last cargo
requirements could be last 3 clean and unleaded, or NOBL at most?
Now moving under last 3 clean & unleaded into EU.
Both the above will/could relieve pressure on freight
Oils and fats changes and opportunities19
1Q00 1Q01 1Q02 1Q03 1Q07 35,000 DWT Voyage Patterns Length
7072 19202 7911 11161 19655 Straits-Europe-Argentina-India-Straits 110 days
8108 18651 10146 13221 21805 Straits-Med-Argentina-India-Straits 102 Days
13244 23375 13203 16957 20078 Karachi R/V 22 Days
8218 18853 8653 11360 21239 Palm to Karachi-Molasses to S.France-Argentina-India-Straits 118 Days
11179 18299 10877 13809 21805 Palm to Karachi-Caustic AG/Durban-Argentina India-Straits 98 Days
13367 23503 13642 16765 25413 Palm to Med-Uan to USAC-Arg-India-Straits 123 Days
10198 20314 10739 13879 21666 Average DVS Earnings
11350 15000 12000 12500 ? Average 30/32000 IMO 3 coated General Trade (mainly CPP)
161 135 153 176 255 Heavy Oil Price HO
244 196 202 242 475 Diesel Oil Price MDO
Comparative earnings