FREIGHT MARKET OUTLOOK 11TH INDIAN COAL MARKETS CONFERENCE SEPTEMBER 2017

PRESENTATION STRUCTURE current situation spot rates & futures pricing positive trade developments in year-to-date, but also re-acceleration in fleet growth what can sustain market recovery? potential demand & supply-side drivers restraining factors structural risks to trade & the risks posed by surplus shipbuilding capacity Whilst care and attention has been taken to ensure that the information contained is accurate, it is supplied without guarantee. SSY Consultancy & Research Ltd can accept no responsibility for any errors or omissions or consequences arising therefrom. SEPTEMBER 2017 | 2

COAL VOYAGE RATES TO INDIA SEPTEMBER 2017 | 3

FREIGHT & COMMODITY PRICES SEPTEMBER 2017 | 4

MAJOR DRY BULK & KEY MINOR BULK TRADES BY QUARTER SEPTEMBER 2017 | 5

CHINESE DRY BULK IMPORTS BY CARGO SEPTEMBER 2017 | 6

DRY BULK CARRIER FLEET NET CHANGE: 12 MONTH MOVING AVERAGE SEPTEMBER 2017 | 7

NET FLEET GROWTH IN YEAR TO DATE 8.5 Mdwt +2.7% 5.4 Mdwt +2.8% SEPTEMBER 2017 | 8

PANAMAX 4TC EARNINGS: ACTUAL & FFA SEPTEMBER 2017 | 9

TRANSITION TO DRY BULK MARKET RECOVERY? any further upside for world steel production? prospect for increased fronthaul mineral cargoes Brazilian iron ore/American coal/West African bauxite government interventions to restrict coal imports (& SE Asian cargo supply) newbuilding orderbook still at historically low levels…but overhang of surplus shipbuilding capacity medium term pressures on 20+ year age fleet from new IMO regulations…but delayed implementation of the convention on ballast water management reduces near term demolition prospects SEPTEMBER 2017 | 10

ANNUAL GROWTH IN SEABORNE DRY BULK TRADE: IRON ORE, COAL & GRAINS SEPTEMBER 2017 | 11

DRY BULK CARRIER NET FLEET CHANGE SEPTEMBER 2017 | 12

REGULATORY PRESSURE implementation of IMO convention on Ballast Water Management postponed until 2019, but US on own schedule retro-fitting costs and uncertainties over system approvals global cap on marine bunker fuel sulphur content to be lowered from 3.5% to 0.5% on 1 January 2020 with inflationary implications for freight rates compliance requires either fuel switching (to ultra low sulphur fuel oil/marine gasoil/gas) or installation of scrubbers majority of bulk carriers likely to switch fuels rather than retrofit scrubbers (due to capital cost/equipment availability) but more attractive option for larger vessels uncertainties over implementation/enforcement due to doubts over adequate global supply of low sulphur bunker fuels SEPTEMBER 2017 | 13

DRY BULK CARRIER ORDERBOOK VS OLDER TONNAGE SEPTEMBER 2017 | 14

DRY BULK SHIPBUILDING ACTIVITY BY COUNTRY ACTUAL & ON ORDER Source: SSY/IHS-Fairplay SEPTEMBER 2017 | 15

CONCLUSIONS firmer freight rates in the year to date due to improved demand-side fundamentals…with market pricing further rises in the 4q17 market confidence in 2018/19 restrained by uncertain trade outlook, this year’s re-acceleration in fleet supply growth, delays in implementing the IMO convention on BWM and resumption in newbuilding orders very gradual improvement in underlying fleet utilization anticipated over the next two years, with bouts of spot rate volatility, ahead of potential market disruption from new IMO rules on low sulphur bunker fuels in 2020 SEPTEMBER 2017 | 16

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