Weekly Dry Cargo Review

28th April 2017, Week 17

SLIDE OF THE WEEK Baltic Dry Indices source: Baltic Exchange

28-Apr 20-Apr Change

Chinese Coal imports in Q1 rose 12mt to 54.6mt yoy. Most of the incremental growth came
from Indonesia(up 7.3mt) and Australia(up 4.5mt) though significantly imports from Russia BDI 1,109 1,243 -134
which were static at 4.2mt in Q1 2015 and 2016 grew by 2.3mt this year to 6.5mt. BCI 1,779 1,991 -212
BPI 1,187 1,553 -366
Russia is the undoubted beneficiary of a sharp reduction in imports from North Korea which
fell from 5.5mt in Q1 2016 to 2.7mt this year with no imports at all in March on the back of BSI 861 899 -38
heightened tensions over North Koreas nuclear weapons ambitions. BHSI 559 572 -13
HRCI 491 500 -9
(Howe Robinson Research) BTI Clean 613 660 -47
BTI Dirty 785 819 -34
HRCI: Howe Robinson Containership Index

Baltic Timecharter Averages

28-Apr 20-Apr Change
China Seaborne Coal Imports BCI 13,285 14,660 -1,375
Q117: 56.4mt (+12mt / +26% y-o-y)
BPI 9,541 12,448 -2,907
Total Share Russia
BSI 9,675 10,090 -415
Q115 Q115 Q115
25
45.3mt 44.6mt 56.4mt
15% BHSI 8,166 8,386 -220
Cap:Pmx Ratio 1.39 1.18 0.21

20 12%
Pmx:Sup Ratio 0.99 1.23 -0.25
Bunker Prices Source: Bunker Spot
28-Apr Change
Million Tonnes

15 9% Rotterdam 380 285.5 -11.5

180 317.0 -14.5
10 6%
MGO 451.0 -15.5
Singapore 380 305.5 -12.5
180 330.0 -9.0
5 3%
MGO 475.0 -16.5
Crude Oil (US$/Barrel) - ICE, FT
0 0% 28-Apr Change
Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17
Brent Crude 51.44 -0.52
WTI Crude 51.44 -1.24
NEWS OF THE WEEK World Markets Sources: Bloomberg, Reuters
28-Apr 21-Apr Change
Exchange Rates
Iron Ore - Chinese Coal imports in Q1 rose 12mt to 54.6mt yoy. Most of the incremental
growth came from Indonesia(up 7.3mt) and Australia(up 4.5mt) though significantly imports USD-JPY 111.39 109.11 2.28
from Russia which were static at 4.2mt in Q1 2015 and 2016 grew by 2.3mt this year to EUR-USD 1.093 1.069 0.024
6.5mt. GBP-USD 1.295 1.278 0.017
Russia is the undoubted beneficiary of a sharp reduction in imports from North Korea which USD-BRL 3.185 3.145 0.040
fell from 5.5mt in Q1 2016 to 2.7mt this year with no imports at all in March on the back of
heightened tensions over North Koreas nuclear weapons ambitions. (Rio Tinto) GBP-EUR 1.186 1.196 -0.009
Economic Indicators
Dow Jones 20,981 20,579 403
FTSE 100 7,222 7,121 101
Dax 12,449 12,026 423
Nikkei 19,197 18,621 576
Hang Seng 24,615 24,042 573

Baltic Secondhand5yr Old Assessments Baltic S&P / Demolition Assesments Baltic Dry Index
Capesize source: BalticSupramax
Panamax Exchange 24-Apr 18-Apr Change 2015 2016 2017
1,500
40
5 yr Old Rates (USDm)

30 Capesize 32.57 32.44 0.13

Million US$

1,000
Panamax 19.70 19.36 0.34
Index Value

20
Supramax 17.01 16.69 0.32
500
10 Demolition USD/ltd

Del China 263.50 267.40 -3.90

0
Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 0
Del Subcont 375.50 380.40 -4.90 Jan Apr Jul Oct
 Weekly Dry Cargo Review
28th April 2017, Week 17

Capesize Commentary Baltic Capesize Indices

Voyage USD/tonne 28-Apr 20-Apr Change
C2 Tub/Rott 6.37 6.90 -0.53
C3 Tub/Qingdao 13.83 13.83 -0.00
The BCI ended the week at 1779 down 51 on the close the previous week whilst the Average C4 R'Bay/Rott 6.18 7.01 -0.83
of the 5 TC routes ended the week at 13285 down 84 on the previous weeks close.
C5 W Aus/Qingdao 6.08 6.08 -0.01
Volume on the benchmark C5 West Australia increased this week but the rates being fixed C7 Bol/Rott 7.30 8.11 -0.81
remained relatively flat and a significant number of Owners ignored the Australian routes and C15 R'bay/China 9.74 10.20 -0.45
set their tonnage on a ballast towards hopefully more buoyant rates out of South Africa and Timecharter USD/day
the Atlantic in coming weeks. Cargo volume out of Brazil for end April and first half of May
C8 TARV 12,777 15,691 -2,914
dates remained limited with spot ships facing subdued rates. There were a number of fixtures
out of East coast United States and East coast Canada to the Far East but the Trans-Atlantic C9 Trip Out 25,117 27,104 -1,987
routes remained subdued. C10 NOPAC 13,123 13,469 -346
C14 China/Brz RV 12,871 13,396 -525
Reported fixtures on the Brazil/China C3 route included a rate of $12.85 pmt reported for a
C16 Trip Back 3,617 5,063 -1,446
170/10 cargo Scale/30,000 shinc for 1-10 May dates although this was considered to be be-
low market levels as the vessel had been released by the initial charterers for reasons of force Baltic FFA Assessm ents
majeure. 28-Apr Change
Capesize
On the Pepel/Qingdao route a 170/10 20,000shinc/30,000shinc cargo loading 22-24 May was TC Avg Q217 14,415 1,098
reported fixed at a rate of $14.50 May basis 1.25% total commission. A 110-130,000/10 Seven
Islands opt Port Cartier/Kaohsiung cargo 60,000 shinc/38,000 shinc terms loading 13-22 May Q317 15,603 1,203
was reported fixed at a rate of $19.90pmt. Cal 2018 14,815 842
Cal 2019 14,650 545
On the C5 West Australia /Qingdao route a vessel was reported to have been fixed for a 12mth (impl) 15,681 2,595
170/10 Scale/30,000 shinc cargo with an eta in West Australia 09-13 May at a rate of
C4 Jan 18 6.78 0.02
$6.30pmt. A number of fixtures for similar cargoes loading second week May were reported
concluded at levels between $6.05 and $6.15 during the latter part of the week. Sailing drafts Cal 2018 6.84 0.05
available at key West Australian loading berths played a significant part in determining the Cal 2019 6.93 0.05
freight rates, Charterers were willing to pay and this remains a key factor to consider on this C7 Jan 18 7.87 -0.03
trade route. Cal 2018 8.04 0.04

On the Saldanha Bay/Qingdao route a 160/10 Scale/30,000 shinc cargo with a 09-14 May Cal 2019 8.13 0.05
laycan was fixed at a reported rate of $10.05pmt. Q2 (17) Cal 18

15
An indicative time-charter fixture in the Pacific was a 179,492 dwt vessel built 2014 giving de-
livery Baoshan 28-30 April which was reported fixed for a trip via West Australia with redeliv-
13
ery Singapore-Japan range at a rate of $16,000 (with an option of East Australia loading at
$16,250 per day).
'000 $/day

11

The trans-Atlantic route saw a 178,076 dwt vessel built 2010 giving delivery Nouadhibou 14- 9
20 May reported fixed for a trip with redelivery Taranto at $10,500 per day + $215,000 gross
ballast bonus. 7

In the period market a 177,773 dwt 2010 built vessel giving retro-active delivery Chang Jiang 5
Kou 23 April was reported fixed for min 6 up to max 8 months at a rate of $14,450 per day. May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17

Commodity Prices
28-Apr 21-Apr Change
Iron Ore - China
Port Stockpile (mt) 133.33 131.35 1.98
Domestic Ore Price (US$/T) - Umetal

Vessels Waiting at Ports source: Howe Robinson/ISS/Gem Shipping

Tangshan(Fe 66%) 85.3 85.3 0.01
China Iron Ore Price CFR (US$/T) - FIS
Vessels Waiting by Sectors Total Vessels Waiting
TSI(Fe62%)Tianjin 66.4 63.8 2.7
28/04/17 28/04/17 28/04/17 28/04/17 21/04/17 Change
Platts (Fe62%)Qdao 66.2 65.1 1.1
Others Panamax Capesize Total Total Total
Australian Coal (Load) 3 41 60 104 124 -20 Steel - CRU Steel Prices Index
Australian Ore (Load) 0 4 11 15 27 -12 North America 190.1 190.1 0.0
Brazilian Ore (Load) 0 1 27 28 27 1 Europe 157.0 157.0 0.0
Chinese Ore (Discharge) 11 10 21 42 41 1 Asia 190.8 190.8 0.0
 Weekly Dry Cargo Review
28th April 2017, Week 17

Panam ax Indices
Panamax Commentary Howe Robinson Grain Voyage (US$/t) 60,000/10 - Week 16
Bid Offer
USG / N.China 40.00 41.00
Atlantic NoPac / N.China 18.25 19.25
Santos / Rizhao 28.50 29.50
We experienced another dispointing week in the Atlantic. Hopes for imporvement on rates
were shattered as the North Atlantic TA suffered from an acute inbalance of Mineral Require- 28-Apr 20-Apr Change
ment and tonnage. More spot/prompt ships opened in both the Cont and Wmed forced owners Baltic Timecharter USD/day
to gradually put down their numbers. At the beginning of the week, offers for Lme's dropped P1A TARV 9,194 14,025 -4,831
below 10,000 p/d basis Gibraltar with charterers happy to sit back and continously bid below P2A Trip Out 15,061 19,159 -4,098
last done rates. The Baltic Round suffered from the same fate with ships rapidly trading sub P3A NOPAC 9,447 11,534 -2,087
10,000 p/d and a longer tonnage list forcing many owners to reconsider their options. Fron- P4 Trip Back 4,460 5,075 -615
thaul levels basis Continent also slipped as the bid on standard Lme's dropped from 16,000 to Baltic FFA Assessm ents
14,000 p/d and then below as rumors of a 74k dwt vessel fixing emerged at 13,500.
28-Apr Change
Down South, the week also started with a lack of momentum with most charterers looking for Panamax
tonnage giving 2nd Half May arrival. A longer list of ballasters prompted the keenest ships to TC Avg Q217 9,018 -1,594
reduce their asking levels and charterers were happy to sit back and wait. Voyage levels came Q317 9,023 -237
off in the region of $1.00 - $1.50 p/mt before charterers started showing interest in Fronthaul
Cal 2018 8,988 -175
tonnage. More activity was reported towards mid/end week with good spec Kamsarmaxes
fixing APS Brazil in the region of 11,500 + 500,000. Cal 2019 9,010 -295
12mth (impl) 9,087 -156
In the East the market has continued to soften this week and it was noticeable how many Op- Q2 (17) Cal 18
erators were reluctantly using their own tonnage against their own cargoes when ships were 13
not on an ideal positions for the cargo, such were the struggles to see the numbers they need-
ed to fix out. As a result, there was very little period enquiry and rates softened by about
$1,000-1,500 leaving well described Supras trading around $9-9,500 and Ultras at $10- 11

10,500. For shorter round voyages we heard last done for NoPac RV was $8,000 DOP Korea

'000 $/day
for Supramax and low 9's bss Japan. In the south the number of prompt coal stems were lim-
9
ited, for the majority of the Operators who had vessels in position made sure to nominate them
for own business. Finally for backhaul, ships were trading around $3,500 to USG and low 4's
to Med. 7
There has been a general softening tone across the Atlantic this week. The USG this week
has been difficult to judge with rates TA and FH rates apparently heading in differing direc-
tions, for the FH rates have held relatively steady, as Owners needed encouragement for 5
May-16 Aug-16 Nov-16 Feb-17
heading east, whilst for the TA rates have indeed softened. For FH we heard rumours of a
Tess 58k dwt fixing at $20,000 to go east, whilst $12,500 was reportedly done to the Med. The Commodity Prices
ECSA market has shown signs of weakness. Rates for ECSA/W.Afr cargos slipped into the
28-Apr 21-Apr Change
mid-low $16,000s and rates for fronthauls seemed to slip across the board, with Ultras offering
$14,000 + $400k and Supras at $13,500 + $350k. With a decent number of ships still in ballast Coal - M cCloskey Coal Price
and various holidays next week, there is concern that rates could slip further Richards Bay 74.6 76.7 -2.1
New castle 82.7 82.7 0.0
Pacific & Period ARA 74.6 74.6 -0.1
Grain ($/metric tonne) CBT
After a very slow end to last week with Charterers leaving spot cargoes to fix, we saw some
high rates being concluded on eco Kamsarmaxes in the beginning of the week. It was inevita- Soybeans 351.5 352.4 -0.8
ble though that tonnage lists were accumulating compared to fresh cargoes. Suddenly it was- Wheat 159.1 155.0 4.1
nt a given anymore that vessels in the south will ballast unless they saw huge premiums for
HRP 1 Yr Period (USD/day)
Pacific RVs. NoPac rates were reported as high as $13,000 on very eco and spot Kam-
sarmaxes in Korea in the beginning of the week, and now high $10,000s are being fixed for 28-Apr 21-Apr Change
end may laycans. Indo RVs have been fixed as low as high $7,000s but from CJK, equating to Del Far East
low $9,000s for ships in South China for 25 days duration. The Post-Panamax market has Ultramax 10,750 10,800 -50
also dropped but does not seem as significant as on the Panamaxes due to a continuous de-
Kamsarmax 11,000 11,500 -500
scent of the Cape market. We have seen very little on the period market as Charterers are
expecting a negative market again next week, hence the spread seems to be $500-1,000 be- 180' Cape 14,450 14,250 200
tween ideas.

Vessels Waiting at Ports source: Howe Robinson Research / ISS / Shipping Services / Williams
Vessels Waiting by Sectors Total Vessels Waiting
28/04/17 28/04/17 28/04/17 21/04/17 Change
Handy/Supra Panamax Total Total Total
Brazilian Grain 8 25 33 38 -5
Paranagua 1 2 3 4 -1
Santos 2 11 13 14 -1
Tubarao 0 0 0 1 -1
Rio Grande 3 4 7 6 1
Argentinian Grain 21 18 39 15 24
Up River 17 12 29 12 17
Bahia Blanca 3 5 8 1 7
 Weekly Dry Cargo Review
28th April 2017, Week 17

Baltic Supramax Indices

Supramax and Handysize Commentary Timecharter USD/day 28-Apr 20-Apr Change
Smax S1B Med/FE 16,250 16,503 -253
Supramax S1C USG/FE 20,556 21,217 -661
S2 PAC RV 8,257 8,921 -664
In the East the market has continued to soften this week and it was noticeable how many Oper- S3 NChina/Wafr 4,690 5,040 -350
ators were reluctantly using their own tonnage against their own cargoes when ships were not
Handysize S4a USG/Skaw 14,966 15,356 -390
on an ideal positions for the cargo, such were the struggles to see the numbers they needed to
fix out. As a result, there was very little period enquiry and rates softened by about $1,000- S4b Skaw /USG 7,734 7,625 109
''Leasson
1,500 leaving vareywell carefully,
described I shall zayytrading
Supras ziss only vernts''.
around This week
$9-9,500 we lostatthe
and Ultras actor Gordon
$10-10,500. For S5 WAfr/ECSA/FE 13,857 14,361 -504
Kaye who
shorter played
round Renewe
voyages theheard
cafe owner in the
last done for greatest
NoPac RV ever BBC
was comedy
$8,000 DOPexport
Korea'Allo 'Allo. The
for Supramax S8 PRC/Indo/EC India 8,669 9,100 -431
first
and sentence
low 9's bss above
Japan.was In said to himthe
the south every episode
number by thecoal
of prompt enigmatic
stems wereand sultry Michelle
limited, for thefrom
ma-
'La Resistance'. The words ring true and should be the one thing you get every week frombusi-
our S9 Wafr/ECSA/Skaw 10,189 10,689 -500
jority of the Operators who had vessels in position made sure to nominate them for own
HandyFinally
ness. marketforreport - we have
backhaul, shipsawere validtrading
and powerful
around message
$3,500 to toUSG impart!
and This week,
low 4's fewer peo-
to Med. S10 PRC/Indo/EC India 8,267 8,650 -383
ple
Therewillhas
readbeen
it asawe have had
general a seasonal
softening cull of the
tone across our Atlantic
recipients
this- ifweek.
you getThethis
USG report, and both-
this week has
er to read
been thistofarjudge
difficult - youwith
are rates
one ofTA shipping's blessed
and FH rates people! heading in differing directions, for
apparently Baltic Handysize Indices
the FH rates have held relatively steady, as Owners needed encouragement for heading east,
It's theformiddle of January, theindeed
northern hemisphere is cold dark and dull and Timecharter USD/day 28-Apr 20-Apr Change
whilst the TA rates have softened. For FH we heard rumours of athere
Tessare58kno excit-
dwt fix-
ing at
ing messages
$20,000 to to impart
go east,other than
whilst that this
$12,500 wasis reportedly
the worst thisdoneyear will Med.
to the get! Chinese
The ECSA New Year
market HS1 Skaw /Rio 7,275 7,177 98
holidays
has shown kicked
signsoff, and most Asian
of weakness. RatesCharterers are being
for ECSA/W.Afr relaxed
cargos slipped as into
the the
market is still
mid-low in their
$16,000s HS2 Skaw /Boston 7,188 7,096 92
favour.
and ratesOwners there have
for fronthauls to make
seemed decisions
to slip on board,
across the what towith
do with
Ultrastheir spot $14,000
offering ships. Some+ $400kwill HS3 Rio/Skaw 12,133 12,761 -628
lower their aiming
and Supras at $13,500 a bit to
+ cover,
$350k.some With a may ballast
decent to better
number paying
of ships areas.
still We heard
in ballast a couple
and various of
holi- HS4 USG/Skaw 9,257 9,336 -79
big Handies, 35-38k Dwt, fixing NoPac RV at
days next week, there is concern that rates could slip further $4,000 basis Japan delivery. Trip down SE Asia
at around $4-5,000 depends on spec and position. Rates haven't fallen further and are general- HS5 SE Asia/Aus/Jap 7,550 7,843 -293
ly maintaining compared to last week. For vessels which open after CNY, most Owners would HS6 NOPAC RV 7,186 7,514 -328
choose to wait. In the Atlantic, the focus is on the North which is soft seasonally. ECSA is soft- Baltic FFA Assessments
er, USG is stable, the Med remains OK. But January is the darkest hour in the Atlantic, so it
Handysize 28-Apr 20-Apr Change
should be grim. The main news is that the Handysize deliveries and newbuildings are bal-
Supramax
anced, we are less than 3 years from Jan 2020 when emissions regs kick in and, with ballast
The Handysize market is starting to resemble the ambiguity of the latest trailers of Games of TC Avg Q217 8,693 9,267 -574
water treatment also impacting on the fleet, we want to celebrate the year of the rooster with
Thrones.
optimism for an improving trend in the market. Q317 8,530 8,785 -255
Is the winter coming and we will see the rates collapse... or maybe hope still exists and the
market gets back into flames as Daenerys Targaryen is hoping to do in King's Landing with her Cal 2018 8,760 8,875 -115
This is Nighthawk, signing out.
dragons? Cal 2019 9,030 9,235 -205
For sure, the market for the Handys has calmed down over the course of this week and all 12mth (impl) 8,540 8,621 -81
routes are now dropping. Handysize
Basis Mediterranean delivery short period is about $8,000 now with Atlantic redelivery, but it
would not be surprising if that number will get into the range of $7,000s over the course of next TC Avg Q217 7,456 7,717 -261
week due to an expected slow start to the week due to Labour Day holiday at many places. Q317 7,171 7,238 -67
Furthermore, with the market dropping some Charterers seem to be holding back their cargoes Cal 2018 7,288 7,275 13
hoping for cheaper freight, additionally enhancing the current status of the market. Cal 2019 7,481 7,519 -38
12mth (impl) 7,193 7,245 -52
Supramax Cal 18 Handysize Cal 18
10

8
'000 $/day

5
May-16 Aug-16 Nov-16 Feb-17

DRY CARGO CHARTERING

London +44 20 7488 3444 Singapore +65 6506 1910 Capesize: hrs.cape@howerobinson.com Projects hrs.proj@howerobinson.com
Hamburg +49 40 2263 0830 Hong Kong +852 3555 1000 Panamax: hrs.pmx@howerobinson.com Research hrs.research@howerobinson.com
Shanghai +86 21 2310 0188 Tokyo +813 3583 9768 Handy/max: hrs.hdy@howerobinson.com Operations hrs.opsldn@howerobinson.com
Dry Cargo S&P: snp@howerobinson.com hrs.opsfeast@howerobinson.com

Howe Robinson Partners 2017.

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