1. Speaker notes available on request
Commodity Trade Patterns
prospects for the dry bulk sector Sector & Commodity Research
Casper Burgering
Senior sector economist 31 October 2012

2. Changing Patterns in Seaborne Trade
100%
13%
28%
90%
80%
70%
60%
52%
50%
73%
40%
30%
20%
20%
10%
0%
14%
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Coal, iron ore, grains import into EU
Coal, iron ore, grains import into Asia
Coal, iron ore, grains import into Others
Data in figure based on trade of iron ore, coal and wheat (= 60% of total dry bulk trade)
Global seaborne trade patterns changed significantly in 20 years
} Imports into Asia increased strongly by 274% in 20 yrs (cagr 14% pa)
} Iron ore and coal seaborne trade main drivers of growth
Source: Clarkson Research Services, ABN AMRO Sector & Commodity Research

3. Dry Bulk Trade 1992-2012 (seaborne)
Iron ore Dry Bulk Trade 1992:
Steam coal
Other Iron ore
Steel products
7% 21%
Wheat
Coking coal Agri
Forest products related
Agribulks 32%
Scrap
Metals
Bauxite Steam related
Fertiliser coal 27%
Cement 13%
Soyabeans
Anthracite Dry Bulk Trade 2012:
Nickel ore Other Iron ore
Petroleum coke 10% 28%
Sugar Agri
Phosphate rock related
Pig iron 21%
Coke
Other Steam
Metals
coal
related
0 200 400 600 800 1,000 1,200 20%
21%
1992 (volume in mln tonnes) 2012 (volume in mln tonnes)
Source: Clarkson Research Services, Metal Bulletin, ABN AMRO Sector & Commodity Research

4. Economic Development of Countries
60,000 Size bubble = crude steel use per capita (kg)
(see value near or in bubble)
292 US
50,000
Germany
248 Netherlands
Japan 539
40,000 500 239 France
163
Italy 459 UK
30,000 335 Spain
40% of world
GDP per capita (USD)
20,000 population
Russia
298
10,000 China 323 147
South
Turkey Brazil
India 45 445 Africa 97
5 Indonesia
high 0
6
medium 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
low
Urbanisation ratio (%)
high
medium
low
Source: IISI, Worldbank, OECD

5. China & India Urbanization Process (2011)
Today, 50% of world population lives in urban areas India 2011:
Population: 1,189,000,000
Srinagar
Urban people: 357,000,000
Jammu
Urbanisation rate: 30%
Amristar Simla Chandigam
Ludhiana
Heilongjiang
Itanagar
Dehli
New Dehli Kathmandu Siliguri
Jilin
Inner Jaipur Agra Lucknow Ledo
Sillong
Mongolia Jodhpur Kanpur
Liaoning Patna Kohima
Xinjiang Allahabad
Gwalior Imphal
Dhambad
Beijing Agartala
Ashansol
Tianjin Varanasi Aizawl
Gandhinagar Howrah
Hebei Kandla Bhopal Ranchi
Indore Jabalpur
Shanxi Ahmadabad Durg-Bhilainagar
Qinghai Ningxia Shandong
Vadodara Raipur Jamshedpur
Kolkata
Veraval Surat Nagpur Cuttak
Gansu Jiangsu Silvassa Bhubaneshwar
Shaanxi Henan Nasik
Anhui Ulhasnagar Puri
Tibet Shanghai Mumbai Poona
Hubei
Chongqing Hyderabad Vishakhapatnam
Sichuan Sholapur Vijayavada
Zhejiang
Jiangxi
Panaji
Hunan
Guizhou Fujian Marmagao Guntakai
Taiwan
Yunnan Guangdong Bangalore
China 2011: Mangalore
Chennai
Guangxi Hong Kong Pondicherry
Mysore
Population: 1,339,724,852 Macau Calicut (Khozikode) Salem
Cuddalore
Tiruchirapalli
Urban people: 679,000,000 Hainan
Coimbatore
Cochin
Trivandrum
Urbanisation rate: 51% Madurai
Source: McKinsey Global Institute, Thomson Reuters Datastream

6. China & India Urbanization Process (2025-30)
By 2025, more than 60% of world population lives in urban areas India 2025-30:
Population: 1,470,000,000
Srinagar
Population growth: 24%
Jammu
Urban people: 588,000,000
Amristar Simla Chandigam
Heilongjiang Ludhiana Urbanisation rate: 40%
Itanagar
Dehli
Kathmandu Siliguri
Jilin New Dehli
Inner Jaipur Agra Lucknow Ledo
Sillong
Mongolia Jodhpur Kanpur
Liaoning Patna Kohima
Xinjiang Allahabad
Gwalior Imphal
Dhambad
Agartala
Beijing Varanasi
Ashansol
Aizawl
Tianjin Howrah
Gandhinagar
Hebei Kandla Bhopal Ranchi
Indore Jabalpur
Shanxi Ahmadabad Durg-Bhilainagar
Qinghai Ningxia Shandong
Vadodara Raipur Jamshedpur
Veraval Kolkata
Cuttak
Gansu Jiangsu Silvassa
Surat
Nagpur Bhubaneshwar
Shaanxi Henan Nasik
Anhui Ulhasnagar Puri
Tibet
Hubei Shanghai Poona
Chongqing Hyderabad
Sichuan
Zhejiang
Mumbai Sholapur Vijayavada Vishakhapatnam
Wuhan Jiangxi
Panaji
Hunan
Guizhou Fujian Marmagao Guntakai
China 2025: Taiwan
Yunnan Guangdong Bangalore Chennai
Population: 1,470,787,000 Guangxi Hong Kong
Mangalore
Pondicherry
Mysore
Cuddalore
Population growth: 10% Macau Calicut (Khozikode) Salem Tiruchirapalli
Shenzhen
Coimbatore
Urban people: 926,000,000 Hainan Cochin
Trivandrum
Madurai
Urbanisation rate: 63%
Source: McKinsey Global Institute, Thomson Reuters Datastream

7. Current Wheat Trade Flows
% = share in global wheat trade (figures 2010/2011)
18% 3%*
13%
28%
6%
15%
* Russia share 2009/2010 = 15%; Russia share 2011/2012 (e) = 15%
Volatile trade patterns in agribulks
} Supply is highly dependent on (regional) weather conditions
} Major import demand: Africa & Far East Asia
} Share in global output of China and India high (resp. 17% and 13%)
Source: IGC

8. Current Coking Coal trade flows
% = share in global coking coal trade
10% 5%
6% 2% 7%
to 23%
Asia
7%
6%
11%
3%
26%
6%
51%
Mongolia!
Trade is likely to become more concentrated
} Australia & N. America together have 84% share in coking coal trade
} Game changer: Mongolia export volume is joining the ranks!
} Shift from seaborne to landborne trade
Source: USGS, ABARE, AME, IEA, Metal Bulletin

9. Current Steam Coal Trade Flows
% = share in global steam coal trade
13%
8% 4%
2%
2%
6%
33%
9% 15%
4%
36%
17%
8%
Increased concentration reduces risk associated with greenfields
} Atlantic Basin: ‘paper trade’ grown rapidly in last 4 yrs
} Game changers: increasing demand from Japan after Fukushima?
} India increasing coal import; relations with Indonesia & S. Africa
Source: USGS, ABARE, AME, IEA

10. Production Growth in Coal Across the Globe
Increase production hard coal 2009-2035
+80%
6,000 +25%
5,000
4,000
+69%
3,000
2,000 +13%
1,000
Mtce
0 +57%
2009 2015 2020 2025 2030 2035
US Europe Australia +12%
Russia China India
Indonesia South Africa Colombia
Despite rising costs, investments in mining increase
} Top 30 coal miners have high reserves-to-production ratio: 60 yrs
} Output of hard coal in US and Europe is in a downward trend
} Centre of gravity of supply (and demand) in Far East Asia
Source: IEA, Metal Bulletin

11. Current Iron Ore Trade Flows
% = share in global iron ore trade
3%
2%
8%
6% 9%
35%
29%
22% 38%
4% 2%
China is main importer of iron ore with a share of 59% in 2011
} 95% of global iron ore trade is seaborne
} Pacific trade 55% and Atlantic trade 45% (in 2001: 45%-55% resp.)
} Output Pilbara region (Aus) approx. 430 mln tonnes/yr and rising
Source: UNCTAD, Metal Bulletin

12. New Iron Ore Project Developments until 2014
* Minor selection of total green- and brownfield projects worldwide
- ArcelorMittal / Baffinland New discovered
(Mary River Project) iron ore deposits
in Qinghai
Approx. 200 Mt reserves
~ 20 Mt 50-75 Mt - Rio Tinto
- BHP Billiton
- Fortescue Metals Grp
- Xstrata
- Eight minor companies
- Atlas Mining
- Rio Tinto
(Guinea Simandou) - Brockman Resources
50-75 Mt - FerrAus Ltd
- CITIC Pacific Mining
- Rio Tinto
> 400 Mt
(JV Orissa Mining)
- Vale
- in Minas Gerais ~ 30 Mt
- Kumba
> 100 Mt - Xstrata
- IMX
75-100 Mt
} May 2012: Total project pipeline is 796 Mt of new production capacity, to
come on stream between 2012-2014
ð Of which: 34% is certain, 28% is probable, 38% is possible
Sources: USGS, UNCTAD, Mining Journal, various public sources

13. Country Dependency on Iron ore & Coal
• Basis: share in world imports 2011
• Necessity for future development and
stage in economic transition
• Urbanisation rate and demographics
Developed countries
Newly industrialized How high is need for the commodity to a country?
Developing countries
Least developed countries Low High
High Americas – coal
Australia – iron ore
• Basis: share Brazil – iron ore China – coal
in world Russia – iron ore
proven
What is Russia – coal
reserves 2011 Mongolia – coal
the China – iron ore
• Domestic Australia – coal India – coal
availability & reserve
base of a India – iron ore EU – coal
self sufficiency
rate country? S. Africa – coal EU – iron ore
• External Brazil – coal
dependency S.Korea – iron ore S.Korea –coal Japan – coal
Low
Indonesia – coal Japan – iron ore
Source: ABN AMRO Sector & Commodity Research (based on data from BP, EIA, UNCTAD)

14. To conclude on Dry Bulk Trade Patterns
1,200 60% 1,200 100%
China joined WTO &
1,000 IOC announced 1,000 80%
Beijing 2008 55%
800 800
60%
600 50% 600
40%
400 400
45%
200 20%
200
Mtce
Mt
0 40%
0 0%
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
1990 2000 2009 2020 2035
Atlantic Iron Ore Trade Atlantic Coal Trade forecasts by IEA
Pacific Iron Ore Trade Pacific Coal Trade
Pacific Iron Ore Trade Share (r.axis) Pacific Coal Trade Share (r.axis)
Constantly changing trade patterns, but Asia will remain key trading area
} Over the past 20 years seaborne trade patterns changed significantly
} Dry bulk seaborne traded volumes increased by 400%+ in 20 years
} Urbanisation & industrialisation (China, India) will provide solid base
} Agribulk trade patterns will remain volatile
} Centre of global coal trade will be in the pacific (share of 75% in 2020)
} Huge investments will keep Australia on No.1 in iron ore output
Source: IEA, Clarkson Research Services, ABN AMRO Sector & Commodity Research

15. Further Information & Disclaimer
For question and further information, please contact:
Casper Burgering
Senior sector economist – Hard Commodities
ABN AMRO Group Economics | Sector & Commodity Research
tel: +31 20 383 26 93
e-mail: casper.burgering@nl.abnamro.com
Visit also ABN AMRO Group Economics on the internet
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