www.fearnleys.

com

WEEKLY
Published by Fearnresearch 18. September 2013

TANKERS
CHARTERING
Crude VLCC charterers finished their September program ex and started slowly to secure tonnage basis 1st decade of Oct beginning this week. Mostly Far Eastern charterers have been active which could be linked to the upcoming holidays later this week in their area. Owners have managed to marginally increase rates, but it remains to be seen if the trend really is firmer as the supply of tonnage remains adequate. The Atlantic VLCC market which has been inactive the recent weeks has seen slightly more activity although owners have not managed to capitalize on it as supply of tonnage still outnumbering cargoes seen in the market. Rates for Suezmax in W.Afr weakened further and reached the lowest point so far in 2013. A long list of unemployed ships versus a mediocre fixing activity leaves no hope for an improvement any time soon. The MED and Bl.Sea Suezmax market remained steady at low levels. Nsea and Baltic Aframaxes reached the bottom ratewise, but with more activity expected end month cross Nsea and beginning of Oct ex Baltic we expect rates could improve slightly in the area. This week has been much like last week with rates still at rock bottom. All eyes are on Libya to see if production will resume and ports reopen. But with conflicting messages owners not getting their hopes up for a better market just yet. The Caribs Aframaxes fell about 5 ws points with more available tonnage in the area putting downward pressure on the rates. Product West: After last weeks drop in TA rates for MRs and LRs, rates are now around the 95 and 85 mark, respectively. LR2s have seen little activity and with only a couple of fixtures, we estimate rate to around USD 2.2m basis STS Cont to Japan/Korea. Short voyages on the Cont and in the Med fell about 5 points and are today paying ws115 basis 30k mt in both segments. The biggest decline in rates this week owners have seen in the States. A voyage basis 38k mt from USG to Cont dropped about 20 points to ws105 level today and a straight Caribs upcoast voyage fell some 10 points. East: The negative trend in the East continued for both LR2s and LR1s and the tonnage list for the next 2 weeks does not encourage of any improvement of freight rates. In addition a few owners are considering to ballast their LR2s from the west via Suez Canal to MEG or WC India which put the rates further down. Basis 75k mt naphtha MEG/Japan latest fixture concluded at ws92.5 which equals to about USD 13.5k on r/v basis. LR1 rates basis 55k mt MEG-Japan dropped another 5-7.5 points to ws100 giving about USD 8k/ day. The MR rates softened as well to ws115 level basis 30k mt basis Singapore-Japan voyage.

DRY BULK
CHARTERING
Handy The rates in Feast are still firm this week even the activity calmed down a bit as chrtrs are not in a rush to cover even their end Sept cargos seems they are speculating on lower rates. Indo/China coal rounds spot vessel open Phils fixed at USD 13k. For vessels open ECI rates jumping up to around USD 10k dop for trips Indo/India with coal. Short period a 57k dwt vessel open N.China was fixed at low 11k for 3/5 mos redel WW. MEG/WCI is still quiet. S.Africa is over supply, rates remain USD 8+200k for trip to Feast. Panamax After the recent rally, in particular in the Eastern Hemisphere, the market seems to have taken a breather - before moving further up. NOPAC rounds being fixed from 14k and close to 15k mid-week, but with healthy volumes and a steady flow of Cape splits there is room for elevated levels short term. Good signs for USG grain activity, where ton rates have moved up from 45 to above 50 in a week could be the basis for a substantial rise in the Atlantic market. With a lagging index and some voyage rates well under index, T/A rounds should be in the 12k range and fronthaul around 18k, even well above 20k on some particular runs. It seems the number of ballasters into the Western Hemisphere is being outnumbered by fresh requirements. Finally, we see decent volumes and levels for period where Owners secure about 12k for short and 11+ on 1 year spec and position depending. At least for now, the market is firm! Capesize Crusade continues with some speculating that market fundamentals may again look more rosy. Average daily earnings have gained almost USD 6k w-o-w, coming in at a firm USD 35500. The main driver is now increasing Atlantic mineral volumes combined with tight supply, and USD 40000 done for T/A round. Looking ahead, most owners are rating well described ships in the region of USD 35000, reflecting the aggressive gains seen on near dated paper FFA contracts for Oct and Q4 now stand at USD 36250 and 32000, respectively. Period deals are being concluded at levels not seen since 2010, with USD 27500 for 5-7 months done on a good 180000-tonner and lately USD 23250 done basis about 12 months. At present it appears that Chinese seasonal re-stocking activities will continue to absorb the growing spot iron ore supply, at least in the short term. This, combined with a relatively stable iron ore price, are good short term indicators for the Cape market.

ACTIVITY LEVEL
VLCC Mixed Suezmax Soft Aframax Mixed P. E. of Suez Soft P. W. of Suez Soft RATES DIRTY (Spot WS) MEG / West MEG / Japan MEG / Singapore WAF / USG WAF / USAC Sidi Kerir / W Me N. Afr / Euromed UK / Cont Caribs / USG CLEAN (Spot WS) MEG / Japan MEG / Japan MEG / Japan Singapore / Japan Baltic T/A UKC-Med / States USG / UKC-Med This Week Last Week Low 2013 High 2013 VLCC VLCC VLCC 260,000 130,000 135,000 80,000 80,000 70,000 23.0 34.0 34.0 37.5 45.0 47.5 70.0 82.5 105.0 22.5 33.5 33.5 39.0 50.0 50.0 70.0 80.0 110.0 17.5 30.0 30.5 35.0 45.0 47.5 67.5 72.5 80.0 28.5 47.5 47.5 46.0 67.5 72.5 105.0 120.0 117.5

ACTIVITY LEVEL
Capesize Strong RATES CAPESIZE (usd/day, usd/tonne) TCT Cont/Far East (172 dwt) Tubarao / R.dam (Iron ore) Richards Bay/R.dam PANAMAX (usd/day, usd/tonne) Transatlantic RV TCT Cont / F. East TCT F. East / Cont TCT F. East RV Murmansk b.13-ARA 15/25,000 sc Murmansk b.13-L.pool 15/25,000 sc HANDYSIZE (usd/day) Atlantic RV Pacific RV TCT Cont / F. East 1 YEAR T/C (usd/day) Capesize Capesize Panamax Handysize Baltic Dry Index (BDI): Panamax Active Handysize Low This Week Last Week Low 2013 High 2013 57,000 15.90 13.80 49,000 13.70 12.60 17,600 6.80 6.10 57,000 15.90 13.80

11,000 18,500 1,500 14,750 8.25 9.00

10,000 16,500 13,000 7.90 8.65

6,000 12,500 3,700 7.00 7.75

11,800 18,500 1,500 14,750 8.50 9.50

75,000 55,000 30,000 30,000 60,000 37,000 38,000

92.5 100.0 115.0 115.0 85.0 95.0 105.0

100.0 105.0 120.0 120.0 85.0 97.5 122.5

67.5 77.5 105.0 105.0 85.0 95.0 60.0

110.0 140.0 177.5 170.0 150.0 192.5 130.0

10,500 8,850 14,750

10,400 8,500 15,200

8,690 4,900 10,770

14,400 9,200 15,200

1 YEAR T/C (usd/day) (theoretical) VLCC (modern) Suezmax (modern) Aframax (modern) LR2 105,000 LR1 80,000 MR 47,000 VLCCs fixed all areas last week: VLCCs avail. in MEG next 30 days:

18,000 15,500 12,250 15,750 14,750 14,000 40 102

18,000 15,500 12,250 15,500 14,750 14,250 previous week: last week:

17,500 15,500 12,250 14,500 13,750 13,000 51 101

19,000 16,000 14,000 16,500 15,000 14,250

150,000 dwt 170,000 dwt 75,000 dwt 53,000 dwt

17,500 17,000 7,600 17,500 22,500 22,000 9,100 22,500 11,200 11,000 7,000 11,200 9,500 9,600 8,300 10,200 This Week: 1822 Last week: 1628

SALE AND PURCHASE

Vessel Maritime Anita Yangfan Resale x 2 (Hull. No. 2255 + 2256) Jiangsu Hantong Resale HT57-12 Namrun Evian Golden Elpis Omiros STX Azalea Neumetal Venture Size Built Buyer 76 737 2004 Ultrabulk 64 000 2014 Kiran Group 57 000 2013 Greek 55 000 2007 Undisclosed 51 201 2002 US Fund 46 645 1997 Undisclosed 42 183 1987 Undisclosed 29 263 2010 Primal Ship Management 27 786 1998 Undisclosed Price Comm. 16,80 26,50 Each 23,50 20,50 173 Enbloc deal w/ tankers 8,50 3,80 14,00 Resold by Golden Ocean 7,80

SALE AND PURCHASE

Vessel Stavanger Bell UACC Shams Hongbo Miss Marilena Britto Lichtenstein Eagle Gulf Northern Lynx Northern Wolverine Size Built Buyer 105 309 2010 Greek 50 138 2009 US Fund 50 106 50 096 50 078 50 070 45 998 16 533 16 533 2009 2009 2009 2009 1995 Indian 2003 Borealis 2006 Price Comm. 31,00 173,00 Enbl w/MV Evian

9,00 25,00 Enbloc +StSt

Fearnleys Weekly Report

18. September 2013

Published by Fearnresearch

GAS
CHARTERING
The week has been sub-par as far as activity in the VLGC market is concerned. It seems that September positions are covered leaving a very small vessel overhang into October. The Saudi Aramco October acceptances that just came out did contrary to expectations not spur any action in the freight market, but a few lifters got their fob cargoes moved from the ME Gulf to the Red Sea. We have seen a few sub-fixtures for early October loading at rates following the recent trend of softening freights. The Baltic VLGC index has been losing ground every single day in very small increments for nearly four weeks now - however, only about 10% from its previous high on 22nd August. Current Baltic level still returns around USD 47,000 a day, nothing to be worried about in our opinion. The next change in global LPG supply is just around the corner when Targa after a couple of recent trial liftings commences exports of 4 VLGC cargoes per month from their Galena Park (TX) facility in October. This has led to a shift of tonnage from the East to the West where we have just seen an owner ballast all the way.

NEWBUILDING
GENERAL COMMENT
Some activity recorded this week, ranging from Handysize to mini Capes. Although activity, according to reported number of contracts, seems low, several of the major yards are getting to a comfort level in terms of order backlogs, hence looking for better return on their products. Consequently, prices are on the raise and deliveries are moving into end 2016.

ACTIVITY LEVEL
Tankers Low Average Far Eastern Prices PRICES (mill usd) VLCC 300dwt Suezmax 150dwt Aframax 110dwt Product 50dwt Capesize 180dwt Panamax 82dwt Handymax 64dwt Dry Bulkers Active Others Low

ACTIVITY LEVEL
COASTER Low 15-23,000 cbm Low 82,000 cbm Low RATES This Week Last Week Low 2013 High 2013 SPOT MARKET (usd/month***) 82.000 cbm / FR 1,445,000 1,535,000 280,000 1,730,000 57.000 cbm / FR 950,000 950,000 900,000 950,000 35.600 cbm / FR 850,000 850,000 725,000 850,000 20.000 cbm / SR* 920,000 920,000 880,000 940,000 10.000 cbm ETH** 520,000 530,000 520,000 570,000 6.500 cbm / SR 455,000 455,000 440,000 470,000 COASTER Europe 210,000 220,000 145,000 320,000 COASTER Asia 200,000 200,000 200,000 245,000 * 20,000 cbm s/r reflects average spot market, LPG and Petchems (segment 15,000 / 23,000 cbm) ** 10,000 cbm eth reflects average spot market, Petchems and LPG (segment 8,200 / 12,500 cbm) *** Excl. waiting time, if any LNG SPOT MARKET (usd/day) East of Suez 138-145cbm West of Suez 138-145cbm 1 yr TC 138-145cbm LPG/FOB prices (usd/tonne) FOB North Sea / ANSI Saudi Arabia / CP MT Belvieu (US Gulf) Sonatrach : Bethioua This Week Last Week Low 2013 High 2013 96,000 100,000 75,000 95,000 102,000 75,000 86,000 86,000 75,000 Butane 871.50 875.00 603.63 872.00 125,000 130,000 120,000 ISO

This Week Last Week Low 2013 High 2013 89.0 89.0 88.0 89.0 58.0 58.0 57.0 58.0 47.5 47.5 45.0 47.5 34.0 34.0 32.0 34.0 49.0 49.0 45.0 49.0 28.5 28.5 27.5 28.5 27.0 27.0 25.5 27.0

NEWBUILDING CONTRACTS
Type No Size BC 5+5 38500 dwt BC 2+1 63500 dwt BC 2 105000 dwt BC BC BC BC CO LPG LPG Yard Taizhou Kouan Dayang CSI Jiangsu Owner Interlink Horizon Tankers FUSCO Interlink Horizon Tankers FUSCO Cara Shipping CIMC Komaya TSW Del Mill$ Comm. 2015 2015 26 2015- 40,6 2016 2015 2015 26 2015- 40,6 2016 2016 2015 85 2014/ 28 15

5+5 38500 dwt Taizhou Kouan 2+1 63500 dwt Dayang 2 105000 dwt CSI Jiangsu 1+1 180000 dwt SWS 2 8800 teu New Times 2 11000 cbm Asakawa 2 83000 cbm Jiangnan

MARKET BRIEF
Rate of exchange JPY/USD KRW/USD NOK/USD USD/EUR Interest rate Eurodollar 12 mnths EuroNOK 12 mnths Commodity prices Brent spot (USD) Bunker prices Singapore This Week Last Week Low 2013 High 2013 99.01 100.28 86.97 103.07 1081.46 1086.55 1058.73 1154.45 5.91 5.92 5.47 6.14 1.34 1.33 1.28 1.35 0.65 2.09 108.17 180 CST 380 CST Gasoil 180 CST 380 CST Diesel 605.00 595.00 915.00 613.00 590.00 904.00 0.67 2.10 111.64 602.00 592.00 925.00 613.00 592.00 928.00 0.65 1.88 98.95 602.00 588.00 836.00 595.00 573.00 820.00 0.84 2.33 118.75 675.00 665.00 995.00 667.00 645.00 1000.00

Propane 833.50 850.00 583.52 840.00

628.16

SALE AND PURCHASE

Vessel Cbm Type No reportable sales this week Built Buyers Price Misc

DEMOLITION
Vessels sold for demolition VLCC/VLOO Year to date 2013: 16 Year to date 2012: 11 2012 total: 16 Rotterdam SUEZMAX 4 13 14 CAPE/OBO 21 43 56

SOLD FOR DEMOLITION

Vessel name MT New Victory MV Buccleuch MT New Fortuner LNG Norman Lady CONT Hope CONT YM Zenith CONT MSC Accra MV H Pioneer Size 285 733 182 675 146 041 53 624 Ldt 38 634 22 494 22 021 23 380 Built 1993 1993 1996 1973 Buyer Chinese Chinese Chinese Chinese Price 380 377 380 (Incl. 3,800 tons of Nickel) 515 (50 T working propeller) 408 378 400 (Bronze working and spare propeller) 400 327 (200 T bunkers incl.) 420 (250 T bunkers included) 362,5 (200 T bunkers incl.) 320

49 262 19 862 1989 Indian 45 500 19 426 1996 Chinese 33 857 9 600 1985 Indian 30 900 6 334 1982 Indian

RORO Rosa Delmas CONT Seaboxer MV Anik Reefer Baltic Night

27 601 14 222 1985 Turkish 24 046 7 590 1994 Indian 23 245 10 598 8 553 1987 Chinese 6 752 1980 Turkish

Fearnleys Weekly Report

18. September 2013

Published by Fearnresearch

FEARNLEYS AS P.O BOX 1158 SENTRUM 0107 OSLO PHONE: + 47 22 93 60 00 www.fearnleys.com

FEARNRESEARCH fearnresearch@fearnleys.no Telefax: 22 93 61 10 FEARNTANK fearntank@fearnleys.no Telefax: 22 93 62 48

FEARNBULK fearnbulk@fearnleys.no Telefax: 22 93 62 50 FEARNGAS fearngas@fearnleys.no Telefax: 22 93 61 30

FEARNSALE fearnsale@fearnleys.no Telefax: 22 93 61 50 ADMINISTRATION Telefax: 22 93 61 20