Monthly S&P Report - Lorentzen & Stemoco AS ... MGO 851,1 868,5 Softening Singapore IFO 380 592,7 597 Softening Singapore MGO 875,4 889,2 Softening 5 -Shipbrokers and consultants since

1

It’s been a quiet past few

weeks for the second hand gas

vessel market. Laugfs Gas

picked up the 6,571 cubic me-

ters LPG carrier Gas Puffer (blt

1995) from Greek owners

Prime Marine Management for

a reported US$ 6.9 million. The

vessel will be renamed the Gas

Challenger, and the acquisition

is part of Laugfs move towards

owning, operating and charter-

ing a varied fleet including LPG

carriers. Older tonnage, espe-

cially larger sizes, have been

sold at a premium for the past

few months, as market demand

is high and fleet supply still

relatively modest.

Deals have been concluded

over the holidays for those who

stayed in the office to play this

depressed market. The

problems buyers have to face

generally concerns the amount

of tonnage coming out of

China. The list of sales

candidates is growing in the

supramax-panamax segment,

however how many of these

candidates are realistic sellers

is less clear. Inspection, offers,

no deals will continue to

happen in the short-term. We

are expecting many Chinese blt

vessels to hit the market over

the coming months with

continuing downward pressure

on asset values.

The late part of August saw

activity picking up in the

second hand tanker market.

Two VLCCs dominated the last

week of the month with

’Ulriken’ (built 1998 South

Korea) reported sold for US$

26.5 million, and the three

years younger vessel DS

Victoria being picked up for

US$ 33 million. Newbuilding

prices coming out of China,

showed a firming trend for the

month in most tanker sizes. As

we entered September, the

market continued to see an

increase in activity with Greek

buyers paying US$ 33.7 million

for another 2001 South Korean

built vessel in the VLCC size.

In the stainless steel tanker

market we have buyers for

modern 19,000 dwt second

hand units whilst most sales

candidates remain tied up in

charters or a JPY/USD head-

lock. Interest for smaller coast-

er tonnage in North West Eu-

rope and Far East Asia com-

bined with lack of modern sec-

ond hand sales candidates has

owners looking at newbuilding

possibilities, although current

charter rates do not yet justify

such. Japanese stainless steel

tanker yards are more or less

booked until 2017, and the

recently released “white-list” of

yards approved by Chinese gov-

ernment so far omits some of

the larger potential builders of

such tonnage.

In the MR market, we continue

to see an increase in resale

candidates from the burgeon-

ing orderbook, while for some

of our active buyers modern

second hand units appear to be

a more effective use of capital.

HIGHLIGHTS

Crude: Activity

picking up in the

VLCC market

Product/Chemical:

Interest for coaster

tonnage heating up

Dry: High ordering

activity might cause

vessel values to fall

going forward

September 2014

Dry

Crude

Product/Chemical Gas

Monthly S&P Report

-Shipbrokers and consultants since 1919-

Hot Hulls

2


Strong market conditions and heavy ordering is causing influx of deliveries to VLGC market. A strong freight market and rising

second hand values for older vessels indicate that we will see little tonnage in the larger sizes being scrapped going forward.

VLGC

Dry Bulk

Chemical

Significant ordering of past years now being delivered. Freight rates and NB prices have been at lower levels for a while, but any

expectations of a recovery might be offset by supply from Chinese yards hitting the water, putting pressure on asset values.

Yards are filling up from the high ordering rate within the segment. SH 5 values have gained momentum since last year and are

now increasing.

Chemical Fleet - Deliveries and Scrapping

VLGC Fleet - Deliveries and Scrapping

Secondhand 5 yr Dry Bulk Fleet - Deliveries and Scrapping

VLGC 82/84 kcbm

Chemical Tanker STST 19,999dwt - SH 5 Year

3


Special report - Private Equity

One of the shipping market’s most prominent features is its

volatility. And as far as any main feature goes in attracting new

partners, the market’s rapid rate of change is doing exactly that

when it comes to tempting the financial market. As traditional

bank finance has grown more careful in the wake of the finan-

cial crisis, private equity and hedge funds have emerged as new

actors. Speculations that a market recovery is imminent have

prompted investors to take advantage of low new building pric-

es, buying vessels and shipping companies, creating joint-

ventures and taking over shipping loans from many traditional

banks seeking to reduce risky exposure. This source of ready

finance has helped make up for the recent years’ shortfall from

the commercial banking sector, and has through its sheer vol-

ume of financial commitment set itself apart as a force to be

reckoned with within the current industry. While estimates

vary, Tufton Oceanic puts total private equity investment into

shipping at US$ 32 bn in the last two years alone. Due to the

often undisclosed nature of such deals however, real numbers

could be far higher.

As a result of the increased levels of available capital there has

been a significant increase in new building orders, as companies

take advantage of lower new building prices to expand existing

fleets as expectations for a recovery grow. Some actors are

voicing concern over this development, arguing that tonnage

oversupply promotes the risk of a delayed recovery in some

market segments. Whilst private equity in particular has been a

reprieve in terms of offering fresh finance and providing equity,

this source of capital may also be tempting the fate of the self-

adjusting market mechanism, by enabling inefficient companies

to pull through where their demise would have been a natural

dynamic of the self-regulating market.

By nature, private equity has a shorter investment horizon than

what is the case in traditional shipping, seeking to reap returns

within a short time frame, and divest from investments within 3

-5 years. As conditions in the freight market at the moment are

making it difficult to make a profit from operations, funds are

employing other strategies, such as watering out ownership

through IPOs or by selling ships in the secondhand market. As

much as the market has benefited from the activity brought on

by private funds, it is also keenly watching how they will extract

themselves from investments and what the possible effects will

be.

Some analysts have argued that the fleet can handle the influx

of tonnage represented by current order books, as they believe

scrapping will increase as international regulations call for more

eco-friendly vessels. Whilst we agree with the principle of this

argument, we do not believe it will have the desired effect, as

fleet age is very young at the moment. (Exemplified by the age

of today’s chemical fleet averaging at 10 years.) In addition,

some older vessels are servicing long-term contracts preventing

them from being scrapping candidates.

Highly affected by the downturn in the global economy, the

shipping industry has been attractive for investors bullish about

a recovery. But as recent GDP growth estimates have continu-

ously been adjusted downwards over the past two years, we

are likely to see lower growth rates over a longer period. This is

setting a sober stage for the demand side of shipping, which is

also augmented by an apparent slowdown in China.

What remains true is that the market will always make sense to

someone, whichever way it turns. At the moment, it could be

telling some actors to sell, as the current bullish sentiment

might make for a hard landing in vessel values within the next

12-18 months unless we see a long awaited recovery pushing

freight rates higher.

4


Scrapping

Newbuilding Prices (China)

Bunker Prices

Panamax and Capesize Scrapping Scrap Price Developments

Dry Bulk NB Prices Tanker NB Prices

Source: MSI

Dry Bulk Trend Y-O-Y

Aug-14 Jul-14 Aug-13

Newcastlemax 57,3 57,7 49,2 Firming

Capesize 54,2 54,5 46,9 Firming

Kamsarmax 30,0 30,1 27,2 Firming

Panamax 28,8 28,9 26,5 Firming

Handysize 23,7 23,7 22,0 Firming

Tanker

VLCC 94,8 95,5 88,3 Firming

Suezmax 60,4 60,6 56,6 Firming

LR1 51,0 50,9 45,5 Firming

LR2 40,3 40,6 37,7 Firming

MR 34,9 34,9 37,7 Softening

NB Prices

(Monthly avrg US$/mt) This Month Last Month Trend

Rotterdam IFO 380 564,6 576,5 Softening

Rotterdam MGO 851,1 868,5 Softening

Singapore IFO 380 592,7 597 Softening

Singapore MGO 875,4 889,2 Softening

5


Interest rates, currencies, PMI

Manufacturing PMI US/China/EU

US$ LIBOR Interest Rate - Maturity 3 Months

USD/CNY 100

Exchange Rates

Disclaimer: The information contained within this report has been collected from a number of market sources and is given in

good faith without guarantee, for information purposes only. Lorentzen & Stemoco and its affiliates, directors and employees

are not liable or responsible for any consequences whatsoever occurring from errors or inaccuracy of the information contained

within this report.

Office Address

Oslo Lorentzen & Stemoco AS

Munkedamsveien 45, 0250 Oslo

P.O. Box 2029 Vika, 0125 Oslo

Norway

+47 2252 7700

Shanghai Lorentzen & Stemoco Shanghai Representative Office

Room 2701, Shanghai Central Plaza

381 Huai Hai Zhong Road, 200020 Shanghai

China

+86 21 6391 5880

6

Transactions list - Wet


Name Size Built YardPrice

US$m Buyer Seller Notes

St Nikolai 47,300 DWT 2005 Onomichi 18 Unknown Maruta Industries

Sipea 37,300 DWT 2007 STX 18,2 Ancora Investments Ottavio Novella

Hull 5129 SPP 50,300 DWT 2015 SPP 38 Sinokor Merchant Marine Ceres Shipping




Verige 52,700 DWT 2010 3 Maj Brodogradiliste 25 Unknown Uljanik Plovidba

Hull 5126 SPP 50,300 DWT 2014 SPP 37,1 Scorpio Tanker Ceres Shipping

Green Stars 36,000 DWT 2001 Daedong 12,5 Unknown Indonesia Andromeda Shipping

Nord Farer 40,100 DWT 2005 SLS 15,5 Unknown Norden

Nord Fast 40,100 DWT 2008 SLS 20,4 Unknown Norden

Hull 1136 50,300 DWT 2015 SPP 34,00 BW Ahrenkiel

Hull 1137 50,300 DWT 2015 SPP 34,00 BW Ahrenkiel

Silver Lining 46,000 DWT 2003 Shin Kurushima Ujina 14,50 Unknown Greek Meiji Shipping Co

Hull 1180 SPP 51,300 DWT 2016 SPP 36,20 Cardiff Marine Roxana Shipping

Hull 1179 SPP 51,300 DWT 2015 SPP 36,20 Cardiff Marine Roxana Shipping

Hellas Progress 46,200 DWT 1999 Hyundai Heavy Ind 10,50 Unknown Latsco Shipping

Pacific Horizon 2 38,000 DWT 2007 Shin Kurushima Ujina 20,00 Unknown Unknown Japa

Hellas Endurance 46,100 DWT 1999 Hyundai Heavy Ind 10,50 Unknown Latsco Shipping

Moonlight Venture 61,200 DWT 2006 Sumitomo 22,50 Unknown Greek Wah Kwong Shipping Dirty

Holy Victoria 75,000 DWT 2008 Minami Nippon 29,00

Prime Marine

Management Shintoku Kaiun

Antipolis 74,500 DWT 2006 Sasaebo 27,5 Ultranav Andriaki Shipping Dirty *sister sold for 25mio

Liwa 75,000 DWT 2008 Minami Nippon 28,5 Tanker Solutions World Marine Co

Pacific Bravery 69,000 DWT 1999 Koyo Dock 8,5 Unknown Middle Eastern Chartworld Shipping Dirty

Tamar 70,300 DWT 2003 Daewoo 20,5 Tanker Solutions Tailwind Shipping

Ottawa 70,300 DWT 2003 Daewoo 20,5 Tanker Solutions Tailwind Ship

Afra

Pacific Poppy 104,600 DWT 2011 Sumitomo 46,2 Tanker Investments Ltd Cido Shipping

SC Sara 105,300 DWT 2001 Sumitomo 17,2 Unknown Indonesian KGAL

Beech 3 109,400 DWT 2000 Dalian New Yard 12,7 Sinokor Merchant Marine Woodstreet Inc Coated

Beech 4 109,700 DWT 1999 Dalian New Yard 10,8 Sinokor Merchant Marine Woodstreet Inc Coated

Moscow 106,600 DWT 1998 NKK 12 Unknown Far Eastern Novoship

Enrica Lexie 104,800 DWT 2008 Shanghai Waigaoqiao 34 Olympic Shipping Dolphin Tanker

DT Providence 104,800 DWT 2008 Shanghai Waigaoqiao 34,5 Olympic Shipping Dolphin Tanker Coated

Ambelos 105,400 DWT 2006 Sumitomo 33,8 PNSC Samos Steamship

DL Iris 109,300 DWT 1998 Dalian 10,3 Far Eastern Daelim Corp Coated

Morning express 105,578 DWT 2000 sumitomo (JPN) 11,80 Econav SA Nakata Mac Corp Coated

Sharp Lady 116,600 DWT 2012 Sungdong 46 Eastern Pacific Shipping Blenheim Shipping

Smart Lady 116,700 DWT 2011 Sungdong 43,5 Eastern Pacific Shipping Blenheim Shipping

Moon Lady 105,400 DWT 2009 Sumitomo 37,5 Eastern Pacific Shipping Blenheim Shipping

Sky Lady 105,700 DWT 2008 Sumitomo 35 Eastern Pacific Shipping Blenheim Shipping

Star Lady 105,500 DWT 2005 Sumitomo 27 Eastern Pacific Shipping Blenheim Shipping

Sea Lady 105,600 DWT 2003 Sumitomo 21 Eastern Pacific Shipping Blenheim Shipping

Koa Spirit 113,300 DWT 1999 Samsung 12,5 Sinokor Merchant Marine Dr Peters

Amorgos Warrior 95,600 DWT 1993 Koyo Dock 7,9 Vista Shipping Polembros Shipping

Product

7


Transactions list - Wet (cont.)


US$m Buyer Seller Notes

Afra

Amorgos Warrior 95,621 DWT 1992 Koyo (JPN) 7,90 vista shipping Polembros Shipping

Cygnus Voyager 156,800 DWT 1993 IHI p/o Chevron Shipping

Independent Tankers

Corp

Sirius Voyager 156,400 DWT 1994 IVI Ishibras p/o Chevron Shipping

Independent Tankers

Corp

Altair Voyager 135,800 DWT 1993 IVI Ishibras p/o Chevron Shipping

Independent Tankers

Corp

Cap Isabella 159,000 DWT 2013 Samsung 65

Clients of Polembros

Shipping JM Maritime Investments

Huelva Spirit 160,400 DWT 2001 Daewoo 18,8 Middle Eastern Buyers Teekay LNG Partners

Cape Balder 160,000 DWT 2000 Hyundai Heavy Ind 16,3 Eurotankers Koenig Cie

Cape Bantry 160,000 DWT 2000 Hyundai Heavy Ind 16 New Shipping Koenig Cie

Energy Sprinter 159,200 DWT 2005 Hyundai Heavy Ind 36,5 NATS

Enterprises Shipping and

Trading

Energy Skier 159,200 DWT 2005 Hyundai Heavy Ind 36,5 NATS


Trading

Ulriken 310,000 DWT 1998 Samsung 26,5 Unknown West African

Independent Tankers

Corp

DS Victory 299,100 DWT 2001 Daewoo 33,6 NGM Energy Dr Peters

Front Opalia 302,200 DWT 1999 Kawasaki 22,8 Sinokor Frontline

Front Comanche 300,100 DWT 1999 Hitachi 22,8 Sinokor Frontline

Front Commerce 300,100 DWT 1999 Hitachi 22,8 Sinokor Frontline

Maersk Hakata 302,600 DWT 2010 Universal 84 Euronav Nissen Kaiun

Maersk Hojo 303,000 DWT 2013 Japan Marine United 94 Euronav Nissen Kaiun

Maersk Hirado 302,600 DWT 2011 Universal 85 Euronav Singa Star

Maersk Hakone 302,600 DWT 2010 Universal 79 Euronav Singa Star

VLCC

Suezmax

8

Transactions list - Dry



US$mBuyer Seller Notes

Strategic Venture 39,800 DWT 2014 Tianjin Xingan Unknown Singaporean

MT Maritime

Management

Free Impala 24,100 DWT 1997 Shanghai Shipyard 3,5 Unknown FreeSeas Inc

Forte 23,600 DWT 2001

Shin Kurushima

Hashihama 7,8 Unknown Greek Toko Kaiun

Theomitor 28,500 DWT 1994 Kanda 6,7 Unknown Anbros Maritime

Fortune Frontier 29,700 DWT 2002 Shikoku Dockyard 10,5 Unknown Greek Tri-Net Logistic

Lingue 27,000 DWT 1990 Minami Nippon 4 Unknown NACHIPA

Cielo Di Vancouver 37,400 DWT 2002 Shanghai Shipyard 12 Singaporean D'Amico Open Hatch

Cielo Di Monfalcone 37,400 DWT 2002 Shanghai Shipyard 12 Singaporean D'Amico Open Hatch

Cleanthes 29,700 DWT 1984 NKK 2,5 Unknown Middle Eastern Capital Management

Atlantic Arrow 28,700 DWT 2005 shin kochi 12,5 Unknown Osaka Asahi Kaiun

Global Prosperity 33,700 DWT 2006 Shin Kochi 16 Unknown Japanese MK Shipmanagement

Sea Bonanza 33,600 DWT 2012 Shin Kochi 23,5 Dalex Shipping Unknown Japanese Open Hatch

C Handy 36,900 DWT 2011 Hyundai Mipo 17,6 New Shipping TMT

Global Horizon 33,600 DWT 2010 Shin Kurushima Ujina 18,8 Unknown Greek MK Shipmanagement Open Hatch

Scarlett 33,400 DWT 2009 Shin Kochi 18,5 Unknown Greek Osaka Asahi Kaiun

B Handy 31,400 DWT 2011 Hyundai Mipo Vogemann H KG TMT

A Handy 36,800 DWT 2011 Hyundai Mipo Vogemann H KG TMT

Bumbi 29,900 DWT 2004 Shikoku Dockyard 13,3 Unknown Greek Eiko Kisen

Tan Binh 36 22,300 DWT 1990 Saiki 3,7 Unknown Chinese Tan Binh Co

Happy Success 42,200 DWT 1991 Oshima 5,9 Unknown Portunato

Tess Bulker 58,000 DWT 2011 Tsuneishi Cebu First Steamship Lauritzen J

Sea Lily 52,500 DWT 2004 Tsuneishi Zosen 15.5 Unknown Greek COSCO Tianjin

Donald Duckling 43,900 DWT 1997 Sanoyas 0.0 Unknown Chinese TMT

Alianca Orient 52,500 DWT 2006 Tadotsu Tsuneishi 17.8 Unknown Indian Kambara Kisen

Island Ranger 43,100 DWT 1994 Oshima 8,0 Unknown


Trading

Alianca Orient 52,500 DWT 2006 Tadotsu Tsuneishi 17,5 Unknown Indian Kambara Kisen

Hull 865 61,000 DWT 2015 Imabari 31,4 Unknown Unknown

Aman Trader 48,300 DWT 1990 Brodosplit 4,1 Unknown Chinese

Universal

Shipmanagement

Marabou 40,900 DWT 1989 3 Maj Brodogradiliste 4,8 Unknown Greek Dalex Shipping

Ocean Queen 53,000 DWT 2011 Nam Trieu 16,0 Unknown Greek Hoa Ngoc Lan Shipping

Good trade 53,732 DWT 2012 Hindustan 18,2 Greeks Good earth maritime

Mimosa dream 48,300 DWT 1996 tadutso tsuneishi 5,1 Unknown Meiji shipping

Blue ocean 57,700 DWT 2011 STX Dalian 19 Unknown Pan ocean

Bright moon 56,100 DWT 2007 Mitsui Tamano 20,0 Thoresen grace ocean investment

Mandarin Harvest 57,000 DWT 2009

Jiangsu Hantong Ship

Heavy Industry 19,0 Unknown Greek Da Sin Shipping

Crown Mina 58,000 DWT 2012

Zhejiang Shipbuilding

Co 25,0 Technomar Shipping Crown Ship

Crown Alexandra 58,000 DWT 2012

Zhejiang Shipbuilding

Co 25,0 Technomar Shipping Crown Ship

Saiko Majesty 50,800 DWT 2009 Oshima 21,5 Samos Steamship Sato Steamship Co Open Hatch

CB Adventure 46,200 DWT 2002 Oshima 12,0 Unknown Singaporean Yano Kaiun

Crown Esmeralda 58,000 DWT 2012 Dayang Shipbuilding Co 25,3 Technomar Shipping Crown Ship

Skye 42,200 DWT 1991 Oshima 5,2 Unknown Chinese Albamar

Jindal Varad 75,500 DWT 1994 B and W 5,8 Unknown Indian Jindal Waterways SS due

Golden Kiji 76,600 DWT 2007 Imabari 19,5 Apollonia Lines Nikko Kisen

Red Iris 75,800 DWT 2003 Sanoyas 15,5 Unknown Greek Arminter

Lan Hai Jin Xiu 79,600 DWT 2014 Nanjing Wujiazui 22,5 New Shipping Guangdon Lanhai

Navios Titan 82,900 DWT 2005 Tsuneishi Zosen 17,7 Ionic Shipping Marubeni

Handy

Handymax/Supramax

Panamax - Post PMX

9


Transactions list - Dry (cont.)


US$mBuyer Seller Notes

Soma Maru 90,800 DWT 1995 Koyo Dock 7,3 Unknown Chinese MOL

Michele D'Amato 76,400 DWT 2005 Tsuneishi Zosen 17,7 Unknown Greek D'Amato

Lowlands Nello 76,800 DWT 2004 Sasebo 17,2 Unknown Cobelfret

Sea Urchin 74,200 DWT 2001 Namura 16,8 Okeanos ship Alert Auction

Voge West 70,700 DWT 1995 IVI Ishibras 5,5 Unknown Vogemann

CSK UNITY 68,500 DWT 1995 Sasebo 6 Unknown chinese TCC

B Max 84,100 DWT 2011

Hyundai Samho Heavy

Ind 24,0 Unknown TMT

Eternal Salute 87,100 DWT 2006 IHI 19,0 Oceanbulk NYK Line

Themis P 70,200 DWT 1994 Sumitomo 5,8 Unknown Chinese Iolcos Hellenic

Duro 73,500 DWT 1993 Hyundai Heavy Ind 6,5 Unknown Chinese Seanergy Maritime Corp

ABYO Natalie 75,500 DWT 1996 Fincantieri 6,8 Unknown Chinese ABYO Holdings

ABYO Jennifer 75,500 DWT 1996 Fincantieri 6,8 Unknown Chinese ABYO Holdin

Silver Surfer 180,000 DWT 2013 Sungdong 53,5 CarVal Investor Sinokor Merchant Marine

Luo Jia Shan 176,000 DWT 2014

Jinhai Heavy Industry

Co 44,5 Unknown Italian Grand China Logistics

Blue Cho Oyu 180,200 DWT 2011 Daehan 51,0 Alpha Tankers Blue Marine

NB TBA 180,000 DWT

2015-

2016

Qingdao Beihai

Shipbuilding Heavy

Industry Co Ltd 55 Foremost 4 units

Equator Prosper 171,200 DWT 2000 Namura 20,0 Global United Shipping Synergy Maritime

Equator Peace 171,200 DWT 2000 Namura 20,0 Global United Shipping Synergy Maritime

Super Star 205,000 DWT 2014 Qingdao Yangfan China Development Bank Ship Finance International

Cape Warrior 151,700 DWT 1995 CSBC Kaohsiung 9,5 Vista Shipping Courage Marine

Silver Pioneer 172,600 DWT 2002 NKK 31,7 Unknown Korean Sinokor Merchant Marine

180-50 (Hull)

Qingdao Beihai 180,000 DWT 2014

Qingdao Beihai

Shipbuilding Heavy

Industry Co Ltd 58,0 Diana Shipping Eships

Blue Manaslu 179,300 DWT 2011 Hyundai Heavy Ind 51,5 Unknown Greek Blue Marine

KSL Seattle 181,000 DWT 2014 Shanghai Waigaoqiao Knightsbridge Tankers Frontline 2012

Cape

Panamax - Post PMX

Documents

Monthly S&P Report - Lorentzen & Stemoco AS ... MGO 851,1 868,5 Softening Singapore IFO 380 592,7 597 Softening Singapore MGO 875,4 889,2 Softening 5 -Shipbrokers and consultants since