Punit Oza - Dry Freight Markets

1. Dry Bulk Market – Rough Seas
Ahead
10th March 2016
Punit Oza
Vice President, Torvald Klaveness

2. Cape earnings and forward curves
Source:Klaveness Research
Cal 15 = 12,775 Cal 16 = 12,900 Cal 17 = 13,800
Cal 15 Actual = 6,900
Cal 16 = 4,600 Cal 17= 6,750
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17
C4TC C4TC Forward 02.12.2014 C4TC Forward 25.02.16

3. Panamax earnings and forward curves
Source:Klaveness Research
Cal 15 = 12,775 Cal 16 = 12,900 Cal 17 = 13,800
Cal 15 Actual = 5,500
Cal 16 = 4,300 Cal 17= 5,200
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17
P4TC P4TC Forward 02.12.2014 P4TC Forward 25.02.16

4. Supramax earnings and forward curves
Source:Klaveness Research
Cal 15 = 8,800 Cal 16 = 8,900 Cal 17 = 9,200
Cal 15 Actual = 6,900
Cal 16 = 4,700 Cal 17 = 5,300
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17
S6TC S6TC Forward 02.12.2014 S6TC Forward 27.11.15

5. The lowest % fleet growth since 2003…
Source:Klaveness Research/Clarksons
4.6%
+5.0 %
+3.0%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
200
300
400
500
600
700
800
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Mdwt
Total Dry Bulk Fleet Growth
<<Mdwt YoY Growth>>
… is not enough when demand growth is zero
+4.8%
0.0%
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
1,800
2,300
2,800
3,300
3,800
4,300
4,800
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Milliontonnes
Total Dry Bulk Trade Growth
<<Million tonnes YoY Growth>>

6. Iron Ore

7. Iron ore is the largest drybulk commodity…
Source:Klaveness Research/Clarksons
100
300
500
700
900
1,100
1,300
1,500
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015Milliontonnes
Global Iron Ore Export
Iron Ore
1386 Mt
30 %
Coal
1 197 Mt
25 %
Grains
659 Mt
14 %
Minor Bulks
1 453 Mt
31 %
2015 Seaborne Volumes
…this year’s trade growth is the slowest in our timeseries
Source:Klaveness Research/GTT

8. Global steel production is historically closely correlated to GDP growth…
Source:Klaveness Research/Worldsteel
600
800
1,000
1,200
1,400
1,600
1,800
Milliontonnes
Global Steel Production
R² = 0,7412
-15%
-10%
-5%
0%
5%
10%
15%
20%
-1% 0% 1% 2% 3% 4% 5% 6%
SteelProductionGrowth
GDP Growth
Global Steel Production and GDP growth
2014
2015
R² = 0.7253
-15%
-10%
-5%
0%
5%
10%
15%
20%
0% 1% 2% 3% 4% 5% 6%
SteelProductionGrowth
GDP Growth
Global Steel Production and GDP growth
…but steel production in 2015 is well below trend and down 2.9% Y..
Source: Klaveness Research/Worldsteel/IMF

9. …as China’s steel production stalls…
29.6 %
18.7 %
16.8 %
2.2 %
14.7 %
9.3 % 9.0 %
4.9 %
13.8 %
0.5 %
-2.4 %
-5%
0%
5%
10%
15%
20%
25%
30%
35%
0
100
200
300
400
500
600
700
800
900
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Chinese Steel Production
China YoY Growth>>
Source:Klaveness Research/Worldsteel

10. …but Chinese steel consumption has fallen more than production…
Source:Klaveness Research/NBS China/Mysteel/CISA
0
20
40
60
80
100
120
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Milliontonnes
Chinese Steel Export (YTD Oct)
…Excessive Chinese Steel production is exported…
50
52
54
56
58
60
62
64
66
68
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Milliontonnes
China Real Steel Consumption
Range 13-14 2013 2014 2015
Source:Klaveness Research/GTT
+32%+20%

11. Source:Klaveness Research/Clarksons/Worldsteel
2.8 % 2.3 %
3.3 %
-2.0 %
-21.2 %
21.5 %
3.8 %
0.4 %
-3.8 %
0.4 %
-3.5 %
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
0
100
200
300
400
500
600
700
800
900
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
ROW Steel Production
EU -15 Japan USA India Korea
Russia Turkey Brazil Taiwan Mexico
Iran Other YoY Growth>>
..leading to negative growth also in ROW production…
3.6 %
5.0 % 5.4 %
-2.2 %
-23.7 %
23.3 %
4.4 %
1.1 %
-2.8 %
4.0 %
-1.1 %
-30%
-20%
-10%
0%
10%
20%
30%
0
100
200
300
400
500
600
700
800
900
1000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
ROW Steel Production + Chinese Steel Export
<<ROW Steel Production <<Chinese Export YoY Growth>>
…which would have been less negative without Chinese exports
Source: Klaveness Research/Worldsteel/GTT

12. In the short/medium term global steel production is totally dependant on China
Source:Klaveness Research/Clarksons/Worldsteel
China
51%
EU -15
9%
Japan
7%
USA
5%
India
5%
Korea
4%
Russia
5%
Turkey
2%
Brazil
2%
Taiwan
1%
Mexico
1% Iran
1%
Other
7%
2015 Steel Production
30%
35%
40%
45%
50%
55%
60%
65%
70%
75%
0
200
400
600
800
1,000
1,200
1,400
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Global Iron Ore imports
China ROW China Market Share>>
Source:Klaveness Research/Clarksons

13. …50% of Chinese steel production is directly linked to real estate…
Source:JP Morgan, Wood Mackenzie/Klaveness Research
Construction
residential
21%
Construction
non-
residential
29%
Machinery
18%
Infrastructure
14%
Transport
11%
Household
appliances
3%
Other
4%
China Steel Demand by end use - 2015E
…China used more concrete in 2011-2013
Source: Gatesnotes, USGS, Cement Statistics, Mineral Industry of China 1990-2013/forbes
than the U.S. did in the 20th century!...
0
5
10
15
20
25
2013 2014 2015
YTD FAI y/y: China
Total Real Estate
… and real estate is where we have seen growth slow down the most
Concrete consumption
Source:NBS China/Klaveness Research

14. Source:Clarksons/Klaveness Research

15. -1.4 %
-0.9 %
-0.4 %
0.1 %
0.6 %
1.1 %
1.6 %
2.1 %
2.6 %
3.1 %
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
Oct-12
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jul-14
Oct-14
Jan-15
Apr-15
Jul-15
Oct-15
Jan-16
Average House Prices per Tier - MoM Change
Tier 1 Tier 2 Tier 3 and lower
We see some green shoots..
…housing sales have rebounded…
Source: Reuters Datastream/Klaveness Research Source: Reuters Datastream/Klaveness Research
… and house prices are rising in Tier 1 and Tier 3 cities and stabilizing in Tier 2
40
50
60
70
80
90
100
110
120
130
140
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Msqm
China: Floor Space of houses sold (3mma)
Range 2010-14 2014 2015

16. 40
60
80
100
120
140
160
180
200
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Msqm
China: Floor Space of houses newly started
Range 2010-14 2013 2014 2015
…and inventory of unsold buildings has stabilized…
…but house starts have not yet recovered...
Source: Reuters Datastream/Klaveness Research
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
Feb-09
May-09
Aug-09
Nov-09
Feb-10
May-10
Aug-10
Nov-10
Feb-11
May-11
Aug-11
Nov-11
Feb-12
May-12
Aug-12
Nov-12
Feb-13
May-13
Aug-13
Nov-13
Feb-14
May-14
Aug-14
Nov-14
Feb-15
May-15
Aug-15
Unsold Sqm
Tier 1 Tier 2 Tier 3
...except of the September blip
Source: NBS China/Klaveness Research

17. Even though Chinese steel production growth is negative YTD…
110
120
130
140
150
160
170
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
MTIronOreEquivalents
IO and Steel Inventories China
Range 12-15 2014 2015 2016
Source: Klaveness Research ,Clarksons, WorldSteel Source: Klaveness Reserach, Mysteel, CISA
…and despite inventory destocking..
29.6 %
18.7 %
16.8 %
2.2 %
14.7 %
9.3 % 9.0 %
4.9 %
13.8 %
0.5 %
-2.4 %
-5%
0%
5%
10%
15%
20%
25%
30%
35%
0
100
200
300
400
500
600
700
800
900
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Chinese Steel Production
China YoY Growth>>

18. …Chinese Iron Ore imports are flat YoY…
…as Chinese domestic iron ore production has been displaced...
0
100
200
300
400
500
600
700
800
900
1,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Milliontonnes
Chinese Iron Ore Imports
0
5
10
15
20
25
30
35
40
45
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Milliontonnes62%FEEquivalent
China Implied Domestic IO Consumption (3mma)
Range 13-14 2013 2014 2015
Source:Klaveness Research/GTT Source:Klaveness Research/NBS China/Mysteel/CISA

19. 0
200
400
600
800
1000
1200
1400
1600
2013 2014 2015 2016 2017 2018 2019
Export Capacity from Majors
Vale Rio Tinto BHP Fortescue Anglo Roy Hill
… with low cost production from the majors..
Source:Klaveness Research/JP Morgan/Company Data Source:Klaveness Research/GTT
… which also has displaced marginal seaborne producers
90
110
130
150
170
190
210
230
250
270
290
350
400
450
500
550
600
650
Jan-13
Mar-13
May-13
Jul-13
Sep-13
Nov-13
Jan-14
Mar-14
May-14
Jul-14
Sep-14
Nov-14
Jan-15
Mar-15
May-15
Jul-15
Sep-15
Nov-15
Jan-16
Chineseimportfromothers
ChineseimportfromAustralia
Chinese Iron Ore Imports (mtpa, 3mma)
Australia<< Brazil+South Africa>> Other>>

20. Coal

21. Source:Klaveness Research/GTT
Coal is the second biggest Dry Bulk Commodity…
… and was down 7% in 2015
Source:Clarksons/Klaveness Research
Steam Coal
1 002Mt
Coking Coal;
262Mt
0.0 %
3.9 %
0.9 %
10.5 %
9.0 %
12.4 %
8.0 %
0.6 %
-7.4 %
-10.0 %
-5.0 %
0.0 %
5.0 %
10.0 %
15.0 %
-
200
400
600
800
1 000
1 200
1 400
2007 2008 2009 2010 2011 2012 2013 2014 2015
Millions
Global coal imports
China India Stable Asia

22. …as a rapid fall in Chinese imports…
…and in U.K. imports…
0
50
100
150
200
250
300
350
2007 2008 2009 2010 2011 2012 2013 2014 2015
Milliontonnes
Chinese Seaborne Coal imports 2015
10
15
20
25
30
35
40
45
50
2007 2008 2009 2010 2011 2012 2013 2014 2015
UK Coal Imports 2015
-87Mt
-17Mt
Source:Klaveness Research/GTT Source:Klaveness Research/GTT

23. …overshadows healthy growth in India...
…and steady growth in the ROW
Source:Klaveness Research/GTT Source:Klaveness Research/GTT
-
50
100
150
200
250
2007 2008 2009 2010 2011 2012 2013 2014 2015
Milliontonnes
India Coal imports (YTD Sep)
+6 Mt
400
450
500
550
600
650
700
750
2007 2008 2009 2010 2011 2012 2013 2014 2015
Milliontonnes
ROW imports (YTD Sep)

24. The largest export cuts is in Indonesia…
100
120
140
160
180
200
220
240
260
280
300
2007 2008 2009 2010 2011 2012 2013 2014 2015
Milliontonnes
Indonesian Export (YTD Sep)
0
20
40
60
80
100
120
2007 2008 2009 2010 2011 2012 2013 2014 2015
Milliontonnes
North American Exports (YTD Sep)
USA Canada
…and North America
-41
Mt
-19
Mt
Source:Klaveness Research/GTT Source:Klaveness Research/GTT

25. Source:Clarksons/Klaveness Research

26. Have Chinese seaborne coal imports found a floor?
Source:Klaveness Research/GTT *Excluding imports from Mongolia (railed) and imports from North Korea (carried in shortsea vessels)
5
10
15
20
25
30
35
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Milliontonnes
China Seaborne Coal Imports*
range 2011-2015 2014 2015 2015 Avg 2016

27. Chinese Coal Imports is only a fraction of domestic production…
Chinese Power Plant Projects, #
4%
5%
7%
6%
8%
7%
Source:Klaveness Research, China NBS/GTT Source:Global Coal Plant Tracker
…and there are still many coal fired power plants being built
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
0
500
1000
1500
2000
2500
3000
3500
4000
4500
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
China Coal Production China Coal Import Imports (% of production)
Chinese coal import vs. domestic production

28. It is not only imports that are falling…
Source: Klaveness Research/China NBS
3,400
3,500
3,600
3,700
3,800
3,900
4,000
4,100
2011 2012 2013 2014 2015
Milliontonnes
China: Raw Coal Output 2015
-5%
1800
1900
2000
2100
2200
2300
2400
2011 2012 2013 2014 2015
Milliontonnes
China: Coal Transported by rail 2015
-12%
…Raw coal output is down 5%
…and coal transported by rail is down 12%
Source: Klaveness Research/China NBS

29. 29
Indian coal imports was up a massive 30% YoY in FH-15…
…but is down YoY in SH…
Source:Klaveness Research/GTT
5
10
15
20
25
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Range 2012-2015 2015 2014
India: Coal Imports

30. India Coal Import
...but what about domestic production?
Source:Klaveness Research/Coal India
… as Coal India’s production is up 9% April to October…
…and total Indian production up about 7.5%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
0
100
200
300
400
500
600
700
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
Milliontonnes
Coal Production India
CIL SCCL Private YoY Growth>>

31. …and as Indian power plants has turned restocking into destocking..
Source:Klaveness Research/India Central Electricity Authority
4
9
14
19
24
29
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Indian Coal Stocks (days)
Range 11-14 2014 2015 2016

32. India Power Plant Projects, #
India’s coal consumption has grown faster than production…
…we are confident than India’s coal consumption will continue to grow…
Source: Klaveness Research/Coal India Source:Global Coal Plant Tracker
5%
10%
15%
20%
25%
30%
0
100
200
300
400
500
600
700
800
900
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15
MillionTonnes
Domestic Coal Production Coal Import Import Percentage>>
India's Coal Consumption by source

33. 0
200
400
600
800
1000
1200
1400
1600
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20
Coal Production India
CIL SCCL Private
India Coal Import
...but what about domestic production?
Source:Klaveness Research/Coal India/News articles
CAGR=1.6%
+6.0
%
…but how fast will domestic production grow going forward?
YTD
+ 10%
… but current production growth is probably enough to cover demand growth
… the governments 2020 production forecast is too ambitious…

34. 34
South East Asia is coming from a low base import volume but is
expected to grow considerably over the next 5 years
South East Asian Power Plant Projects, #
Source:Klaveness Research/News articles Source:Global Coal Plant Tracker
0
20
40
60
80
100
120
2015 2016 2017 2018 2019 2020
Milliontonnes
Emerging Pacific Expansions
Vietnam Malaysia Phllippines Pakistan

35. 35
Turkey have plans to quadruple their import based on new coal fired capacity
Turkish Power Plant Projects, MW
Source: Klaveness Research /GTT
10
15
20
25
30
35
40
45
50
55
60
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Mt
Turkey Coal Import
Base Case, CAGR = +10%
Source: Klaveness Research/Yildirim Group

37. Source: Klaveness Research/GTT/Various port data
The Grain and Oilseed trade constituted 14% of 2014 volumes
Source:Clarksons/Klaveness Research
0
50
100
150
200
250
300
350
400
450
500
2012 2013 2014 2015 Est
Milliontonnes
Grain Export from Atlantic Hubs
South America U.S. Black Sea EU
… Grain trade in 2015 at all time high
+39
Mt

38. Source:Clarksons/Klaveness Research

39. …a prolonged and all time high ECSA grain season...
6
8
10
12
14
16
18
20
22
24
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Milliontonnes
ECSA Grain Export (Port data)
Range 12-14 2014 2015 Actual 2015 Estimate 2016
4
6
8
10
12
14
16
18
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Mt
US Grain Export
Range 2010-2014 2014 2015 2015 Estimate 2016 Projection
Source:Klaveness Research/GTT/USDA Source:Klaveness Research/GTT/USDA
…has displaced U.S. export in Q4...and pushed some of it to Q1-16???
...together with prospects of a new all time high ECSA export season...
...grain shipments are expected to be very strong in FH-16...

40. As the major exporters are in the Atlantic
…and majority of imports are in the Pacific..
...the grain trade generates a lot of ton mile
Source:Klaveness Research/USDA
176Mt
41 71
Mt
174
Mt
25
105
Mt
87
Mt
47
105
Mt46
27
23

41. China Thermal Coal Import
- Power output growth continued to slow in Q1…
- …and hydro production growth continued to post YoY growth…
Source:Klaveness Research/USDA
Long term trend: USDA forecast a low but steady growth in the next 10 years
Export will grow from Atlantic Hubs
Import will grow in China and emerging economies
-20
-15
-10
-5
0
5
Export Import
-40
-35
-30
-25
-20
-15
-10
-5
0
Export Import
-5
0
5
10
Export Import
-5
0
5
10
Export Import
-15
-10
-5
0
Export Import
-20
-10
0
10
20
30
Export Import
-10
0
10
20
30
40
50
60
Export Import
-10
0
Export Import

42. China Thermal Coal Import
- Power output growth continued to slow in Q1…
- …and hydro production growth continued to post YoY growth…
Source:Klaveness Research/GTT
Short term:
1.4
2.4
3.4
4.4
5.4
6.4
7.4
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Mt
China Grain import
Range 12-14 2014 2015 2016

43. Minor Bulks

44. Minor bulks constitutes 29% of Dry Bulk Volumes
Source:Clarksons/Klaveness Research
800
900
1,000
1,100
1,200
1,300
1,400
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 FC
Milliontonnes
Total Minor Bulk Trade

45. Source:Clarksons/Klaveness Research

46. Chinese minor bulks imports are up YoY
…up 17% YoY in the last 8 months
Source:Klaveness Research/GTT
0
50
100
150
200
250
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Milliontonnes
Chinese Minor Bulk Import (YTD Oct)
Nickel Ore Bauxite Pulp
Fertilizers Steel Scrap Alumina
Manganese Ore Chromium Ore Copper Concentrates
10
12
14
16
18
20
22
24
26
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Milliontonnes
Chinese Minor Bulk Import
Range 11-14 2013 2014 2015
-39%
YoY
+17% YoY
Source:Klaveness Research/GTT

47. Fleet Growth

48. Total Dry Bulk Fleet Growth
- Lowest since 2003
Source:Klaveness Research/Clarksons
2.3 %
4.2 %
3.2 %
2.1 %
4.6 %
7.2 % 6.9 %
6.6 %
6.7 %
7.6 %
14.7 %
15.7 %
13.8 %
7.2 %
5.0 %
3.0 %
2.1 % 2.0 %
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
-60
-40
-20
0
20
40
60
80
100
120
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Total dry bulk fleet growth
Deliveries Scrapping Additions/Removals YoY growth

49. 3.7 %
5.1 %
3.1 % 3.2 %
7.2 %
9.5 %
8.8 % 8.8 % 8.3 %
13.3 %
22.5 %
20.4 %
16.9 %
7.1 %
4.7 %
1.9 %
0.6 %
0.2 %
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
22%
24%
-20
-10
0
10
20
30
40
50
60
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Mdwt
Deliveries Scrapping Additions/Removals yoy fleet growth >>
Capesize Fleet Growth
- Lowest since 2003
Source:Klaveness Research/Clarksons

50. 5.6 %
9.2 %
5.5 %
1.6 %
4.7 %
8.3 % 8.7 %
7.2 %
6.0 %
5.1 %
9.0 %
12.3 %
13.5 %
9.7 %
7.1 %
2.6 %
1.3 %
-1.0 %
-5%
-3%
-1%
1%
3%
5%
7%
9%
11%
13%
15%
-10
-5
0
5
10
15
20
25
30
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Mdwt
Deliveries Scrapping Additions/Removals yoy fleet growth >>
Panamax Fleet Growth
- Lowest since 2003
Source:Klaveness Research/Clarksons

51. 1.7 %
6.1 %
8.5 %
6.5 %
5.9 %
8.4 % 8.2 %
7.2 %
8.3 %
9.3 %
16.3 %
18.7 %
15.4 %
9.1 %
5.8 %
6.6…
6.2 %
5.6 %
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
-5
0
5
10
15
20
25
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Mdwt
Deliveries Scrapping Additions/Removals yoy fleet growth >>
Supramax Fleet Growth
- Continued high fleet growth
Source:Klaveness Research/Clarksons

52. Handysize Fleet Growth
- Slightly higher, but remains fairly low
-1.7 %
-2.4 %
-2.6 %
-1.8 %
0.3 %
1.6 %
0.8 %
1.9 %
3.4 %
-0.5 %
6.1 % 6.1 % 3.6 %
-0.1 %
0.6 %
0.7 %
2.3 %
2.0 %
-6%
-4%
-2%
0%
2%
4%
6%
8%
-10
-5
0
5
10
15
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Mdwt
Deliveries Scrapping Additions/Removals yoy fleet growth >>
Source:Klaveness Research/Clarksons

53. 9
10
11
12
13
14
15
Q1-00
Q2-00
Q3-00
Q4-00
Q1-01
Q2-01
Q3-01
Q4-01
Q1-02
Q2-02
Q3-02
Q4-02
Q1-03
Q2-03
Q3-03
Q4-03
Q1-04
Q2-04
Q3-04
Q4-04
Q1-05
Q2-05
Q3-05
Q4-05
Q1-06
Q2-06
Q3-06
Q4-06
Q1-07
Q2-07
Q3-07
Q4-07
Q1-08
Q2-08
Q3-08
Q4-08
Q1-09
Q2-09
Q3-09
Q4-09
Q1-10
Q2-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Q1-12
Q2-12
Q3-12
Q4-12
Q1-13
Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Q2-15
Q3-15
Q4-15
Knots
Optimal Speed Panamax Actual Speed
53
Effective supply growth dependant on speed
- Short term demand shocks can be met by speed increases
Source:Klaveness Research
Supply
increase
of 16%

54. Conlusions
• xxxx
Conclusions

55. Conlusions
• Chinese real estate market the main driver for iron ore imports
 If the house prices keep rising and destocking of housing continues, new activity may follow.
• Chinese coal import policies and Indian domestic coal production the main drivers for coal trade
 We think Chinese coal imports bottomed out in 2015 and expect it to stagnate during 2016 and thereafter
grow at a moderate pace as domestic output reduces.
 We think that demand growth will eventually outperform production growth in India and expect imports
to stagnate/reduce during 2016 and thereafter grow at a steady pace.
• We expect all time high grain/oilseed trade in 15/16 Marketing Year and steady growth thereafter.
• We expect a steady growth in Minor Bulks trade and shifting trade patterns
• Earnings will be rangebound over 2016 as supply is elastic to demand through:
 Speed optimalization
 Scrapping/Slippage/Cancellations
 Newbuildings

56. Conlusions
• Shipping as well as Commodities move in Cycles
• 2003 to 2008 period was an exceptional period and an aberration
• As it stands today, both shipping and commodities are back to moving in cycles
• Historically, the low prices of commodities and low shipping costs should spur new trades and boost existing
trades as well.
• China remains a huge influence due to its sheer size, even if in a subdued form.
• Due to the technological advances and economic interdependence, there is a massive intent among countries,
especially in Asia, to promote trade and stimulate demand.
• Geo political uncertainties have brought together unlikely allies and therefore the possibility of new trades and
deals.

57. 4%
5%
7%
6%
8%
7%