Week 43 -Shipbrokers and consultants since 1919- Weekly Dry Bulk Report Week 22 HIGHLIGHTS Capesize: Jump in rates for both basins Panamax: Active market and firming rates CAPESIZE Off to a positive start on Monday, reports were indicating a firming market. FMG and RTS were heard in the market looking for tonnage with end October estimated time of arrival in West Australia, charterers were bidding respectively US$8/mt and high US$7/mt. . Not many front haul cargoes, although Cargill and CSE were both in the market for tonnage. Tuesday saw a jump in rates for both basins, before a quieter Wednesday due to holiday in Singapore. All the majors were in the market, with FMG looking for prompt dates paying up May 30th to fix tonnage. Bao Zhu Hai fixed US$9.20/mt for 26- 29 Oct estimated time of arrival in Port Hedland. November dates were also seen fixing at much improved levels, vessels with 1- 3 November estimated time of delivery were seen fixing at US$8.95/mt. On the period side 2014 Classic was said to have fixed the CPO Asia 170 000 dwt for 47 months at a touch under US$18 000/d. We have seen a 19.27 per cent rise in rates for the C3 route from Monday to Thursday, and rumors suggest Vale will take a large number of capesizes in the Atlantic. Capesize Timecharter Average (TCA) US$/day 120,000 100,000 80,000 60,000 40,000 20,000 0 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 5 Yr Low 5 Yr High 5 Yr Avg 2014 Ytd In the Atlantic, rates edged 10-20 November loading. Earlihigher on the US Gulf/ Far East er a Kamsarmax was fixed on A much more active market route with a 76 000 dwt vessel voyage from US Gulf to China US$16 000/day+ at US$44.25/mt. resulted in firming rates in all securing sectors this week. Indian de- US$600 000 ballast bonus for mand for coal remained strong Panamax Timecharter Average (TCA) US$/day with vessels being taken for 50000 loading in both East Coast Aus45000 40000 tralia and Indonesia. Period 35000 interest returned in the Pacific 30000 25000 and a well described Kam20000 sarmax open in North China 15000 10000 end October was reported to 5000 0 have fixed 5-7 months in the 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 upper US$11 000/day range. PANAMAX L&S INDEX OF DRY BULK STOCKS* 105 95 85 75 65 55 45 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 Week in 2014 5 year Low 5 year High 2014 ytd 5 year average *Basket of stocks for L&S Index includes: Golden Ocean Group Ltd., Western Bulk ASA, Scorpio Bulkers Inc., Paragon Shipping Inc., Baltic Trading Ltd., Diana Shipping Inc., DryShips Inc., Safe Bulkers Inc., and Star Bulk Carriers Corp. 1 -Shipbrokers and consultants since 1919- Far East coming up for end Octo- weeks. Handy size in both basins ber/early November which also remained relatively steady . The Supramax market fell slightly should help rates in the coming this week on the previous week. In the Pacific, rates have been steady for the usual Indonesia– US$/day Supramax Timecharter Average (TCA) India coal runs. North Pacific 45000 voyages held relatively un40000 changed from the previous 35000 30000 week. In the Atlantic, rates also 25000 seemed to hold relatively steady. 20000 We saw more activity in the 15000 10000 Black Sea with inter Mediterra5000 nean business and front haul 0 routes up higher on the previous 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 Week week. We are also seeing more 5 year Low 5 year High 2014 ytd 5 year average stems in the US Gulf for direction SUPRAMAX/HANDY Handy/Supra: Relatively steady rates in both Pacific and Atlantic The Baltic Exchange Dry Index Weekly Baltic Average BCI Weekly Baltic Average BPI Weekly Baltic Average BSI Weekly Baltic Average BHI Weekly BDI Average FFA Calendar 15 BCI Calendar 15 BPI Calendar 15 BSI Bunker Prices Rotterdam IFO 380 Rotterdam MGO Singapore IFO 380 Singapore MGO Last Week This Week 8,423 12,657 7,317 8,393 9,855 9,517 7,402 7,254 942 1089 Trend Firming Firming Softening Softening Firming (US$/day) (US$/day) (US$/day) Last Week This Week 14,965 17,017 8,970 9,346 9,565 9,803 Trend Firming Firming Firming (US$/mt) (US$/mt) (US$/mt) (US$/mt) Last Week This Week 496 462 496 462 736 733 747 738 Trend Softening Softening Softening Softening (US$/day) (US$/day) (US$/day) (US$/day) 2 -Shipbrokers and consultants since 1919- US$/day 26000 24000 22000 20000 18000 16000 14000 12000 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 Cal 15 5 TC BCI-TCA US$/day BCI FFA 28000 Week 45000 40000 35000 30000 25000 20000 15000 10000 5000 0 1 Cal 15 4 TC 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 2012 BPI FFA US$/day Week 2014 BPI-TCA US$/day 18000 16000 14000 12000 10000 8000 6000 4000 2000 0 15000 14000 13000 12000 11000 10000 9000 8000 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 Week Cal 15 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 2012 US$/day 2013 BSI FFA US$/day 15000 18000 14000 16000 13000 2013 2014 ytd Week BSI-TCA 14000 12000 12000 11000 10000 10000 9000 8000 8000 6000 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 Cal 15 1 Week 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 2012 2013 Week 2014 ytd BHI-TCA US$/day 13000 12000 11000 10000 9000 8000 7000 6000 5000 4000 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 Week 2012 3 2013 2014 ytd -Shipbrokers and consultants since 1919- Iron Ore Iron ore: Steel mills are keeping their stockpiles low Chinese steel mills are keeping their stockpiles low and traders are careful in taking in new cargoes as a result of a volatile market. This indicates that the iron ore market not yet has hit the bottom. In spite of the gloomy market, miners are keeping up production. Chief executive in BHP has given an indication that they will con- tinue to keep up production prices fell to US$80/mt as they believe iron ore pric- Thursday, a 1.8 per cent fall es are more likely to decline from Wednesday. than rise. Vale Brazil announced this Thursday that third quarter production reached 85.7 million mt, the highest quarterly output in the company's history. Rio Tinto and BHP Billiton also had record high production levels this quarter. Iron ore Coal Geo Energy Resources announced Tuesday that they have signed a 15- year agreement to manage and operate a coal port in the South Kalimantan province in Indonesia. A new coal transport belt stretching 800 current 4.8 million mt/year meters into the Java Sea will to 22.8 million mt/year. be built, making it possible to load directly in all tidal conditions, even for large barges. The terminals coal capacity will expand from a Grain Grain: Large Us grain harvest has pushed prices to a four year low The large US grain harvest has pushed prices to a four year low. This usually means an increase in sales, but not this year as competing export countries such as Ukraine and Russia are taking advantage of strong dollar to gain market share. Furthermore, a congested US transport system has contributed to push rail and river freight rates upwards, increasing the cost of bringing the grain to ports for ship4 ping. This is driving down farmers earnings, making them hold on to crops hoping other producers will eventually run down their stocks. Soaring demand for crude oil sent by rail, made rates increase from US$2-3 per ton y -o-y to around US$50 to domestically transport grains this harvest season. In perspective, the cost of shipping grains from US Gulf to China is about US$44/mt. This is adding a significantly export cost contributing to reduce farmers profit. As the U.S share of global export shrinks, it is suggested by analysts that more soybeans will be planted in the United States and less corn and wheat for the next season. This will make a shift in the trading pattern for with the Black Sea region remaining an aggressive world player in grains. -Shipbrokers and consultants since 1919- Office Oslo Address Lorentzen & Stemoco AS Munkedamsveien 45, 0250 Oslo P.O. Box 2029 Vika, 0125 Oslo Norway +47 2252 7700 Athens Lorentzen & Stemoco (Athens) Ltd Leof. Karamanli 25 Voula 166 73 Athens, Greece +30 210 89 000 59 Singapore Lorentzen & Stemoco Singapore Pte Ltd. 8 Eu Tong Sen Street, #21-98 Office 1 The Central 059818 Singapore +65 6349 8400 Shanghai Lorentzen & Stemoco Shanghai Representative Office Room 2701, Shanghai Central Plaza 381 Huai Hai Zhong Road, 200020 Shanghai China +86 21 6391 5880 New York Lorentzen & Stemoco AS (New York City) 8 East 41st St 8th Floor New York, NY 10017 United States of America +1(212) 684 2503 5