Monthly S&P Report - Lorentzen & Stemoco AS S&P Report -Shipbrokers and ... 79.0 Beijing Sunrise 321,300 DWT 2009 Daewoo China VLCC Sinokor 86.0 Dalian Glory 301,900 DWT 2011 IHI China

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Sunny skies persist for the crude tanker market, spur-ring a fair bit of interest, if not necessarily activity, in SNP. Asset prices are rela-tively high, and many Own-ers remain skeptical about buying in such circumstanc-es, given the potential vola-tility of the market. Recent sales include the en bloc sale of the VLCCs Universal Queen and Universal Crown (2005 built HHI) to South Korean interests at around US$98 million including TCB.

The charter market contin-ues to be dismal, with mar-ket fundamentals providing little support for optimism; SNP activity is relatively low with the exception of a few cash rich asset-players ac-tively looking to capitalise on low prices, mostly in the Panamax segment. Recent sales include the 2008 Japan built Lowlands Queen (76,000 dwt), sold at US$15.3 million, and the 2004 Japan built Million Trader (76,000 dwt), sold at US$9.3 million, both to Greek interests.

Freight rates for chemical tankers strengthened in May on the back of a firming clean market. Owners of chemical tankers were able to command higher rates, following LRs and MRs in-creasing earnings for car-riage of petroleum products. Particularly the chemical tanker trade from Houston to Rotterdam continued gaining ground. Asia-bound shipments also ticked up, although the market is still marked by ample supply of tonnage. At current 19,000 dwt stainless steel chemical carriers are attracting around US$15,000 per day on a 12-month timecharter contract, a slight improve-ment from April.

Noticeable sales for chemi-cal tankers this month have involved the IMO II stainless steel tanker Fairchem Filly of 19,000 dwt built 2007 in Ja-pan. The IMO I Medkem Four of 4000 dwt built in Denmark has also changed hands, utilized for coastal trading. In addition, the 13,000 dwt Nordic Oslo built 2005 has reportedly been sold from Nordic Tankers to South Korean interests. Fi-

nally, the Nautilus, an epoxy coated IMO II of 43,000 dwt, has reportedly been sold from Marflet to Turkish in-terests.

Inquiries have been made both for LPG and LNG ships in the past month, with some of these resulting in actual sales. The VLGC sector continues to see some buy-ing interest, but high values relative to newbuilding pric-es is a possible deterrent. The Gas Scorpio (78,500 cbm, built 1995) was sold from NYK to Trong Pat Loc, Vietnam for US$39 million. The demolition market rec-orded the sale of the Sea Pride Eth/LPG (10,500 cbm, 1991 built) to Indian scrap buyers. In the LNG market two transactions were con-cluded. The LNG Swift (127,500 cbm, built 1989) was sold from NYK to Si-nokor for US$20.5 million. Furthermore, the LNG Abuja (126,500 cbm, built 1980) was sold from Nigeria LNG to Golar LNG for US$20 million.

HIGHLIGHTS

Crude: Buyers

adopt wait-and-

see approach

Dry: Some asset-

play activity

Chemical: Firming

clean market

trickling down to

chemical rates

Gas: High

newbuilding prices

possible deterrent

for buyers

May 2015

Dry

Crude Chemical

Gas

Monthly S&P Report

-Shipbrokers and consultants since 1919-

Hot Hulls

2


Rates are still going strong both East and West of Suez. Time charter earnings on VLGCs have seen rates increasing by more than

20% compared to last month, especially due to high volumes coming out of the US and Middle East. Some congestion in both

Houston and at delivery in India is helping to keep rates high.

VLGC

Dry Bulk

VLCC

Some welcome positive movement in freight rates saw the BDI climb by 7% in one day, up to 634 points in the middle of May. The

BDI lost some momentum in the third week of May, falling back to 588. Rates are still at low levels, with Capesizes rates still below

operating cost.

VLGC Fleet –Deliveries and Scrapping

Capesize Values Dry Bulk Fleet - Deliveries and Scrapping

VLGC Values (82/84 kcbm)

VLCC Values VLCC - Deliveries and Scrapping

VLCC freight rates saw a spike in mid-May, climbing to WS72—equalling a TCE of around US$54,650. The market remains strong,

as seasonality does not seem to have kicked in with its usual force during the past months.

3

The narrative of the tanker recovery story has been heavily dominated by the growth in Chinese crude oil demand. Refinery expansions adding 600,000 bpd of capacity last year (placing the country third globally after the US and EU), are together with falling growth in domestic consumption increasing Chinese oil product output and exports, causing demand for crude oil to reach new heights.

Seaborne trade of oil products to China (mostly from other Asian countries) has been decreasing every year since 2011, as imports are being replaced by crude oil and domestic refinery capacity.

Product imports totaled 7.8 million tons in Q1 this year, seeing an annual decrease of 20% over the past four years. With Chinese refinery capacity rising (now totaling around 14 million bpd), and domestic consumption slowing down, a supply-demand overhang is leading to increasing exports to other parts of Asia. Rising since 2012, total exports in 2014 totaled 18.7 million tons dominated by diesel, gasoline and kerosene. Chinese crude oil imports rose by 5.4% year on year in April, as refinery throughput increased by 6.9% over the same period.

Customs data show that China exported more than double its initial limit of gasoline, jet-fuel, diesel and naphtha in 2014, totaling 19.6 million tons. As the Chinese economy transitions from being investment driven to focusing on consumption, domestic demand for diesel from the industry and construction sectors is falling. According to traders, it would be no surprise if the country’s May exports of gasoline surpassed the 415,000 tons exported during the same month last year.

The Chinese Government allocates export quotas for oil products to state-run refineries after domestic demand have been assessed. The initial limit in 2015 has recently been raised by Beijing. Coupled with additions to refinery capacity in the Middle East coming online, the product market might be looking at a possible supply glut pushed further by Chinese export volumes, driving down fuel prices. Cheaper

crude prices are also increasing margins for Chinese refiners, which are likely to apply for expansion of quotas once the initial limit is reached. Sinopec, CNOOC and PetroChina were given an export quota of 9.75 million for Q1 2015, an increase of 20% from the initial limit in 2014.

Changing quota regulations are also likely to keep increasing product output, as so-called ‘teapot’ refineries, which make up one third of national crude oil processing capacity, are now being allowed to import crude oil from abroad.

Declining import of oil-products to China has the potential of hurting short haul trade for clean tankers within the region, whilst increasing long haul exports of crude oil to Chinese refineries should provide further support for VLCC rates as demand strengthens going ahead.

Special Report—oil products in China changing trade


4


Scrapping

Newbuilding Prices (China)

Bunker Prices

Dry Bulk Scrapping Scrap Price Developments

Dry Bulk NB Prices (China) Tanker NB Prices (China)

Source: AXS/L&S Research

Dry Bulk Apr-15 Mar-15 Feb-15 Trend

Newcastlemax 54.11 54.66 55.3 Softening

Capesize 51.13 51.69 52.1 Softening

Kamsarmax 27.92 28.4 28.0 Softening

Panamax 26.9 27.35 27.7 Softening

Ultramax 26.67 26.05 26.6 Firming

Handysize 22.24 22.41 22.6 Softening

Tanker

VLCC 93.9 94.14 94.3 Softening

Suezmax 60.06 60.38 60.4 Softening

LR2 50.4 50.92 51.1 Softening

LR1 40.35 40.39 40.3 Firming

MR 35.13 35.12 35.0 Firming

NB Prices

(US$/mt) May to date April Trend

Rotterdam IFO 380 349.9 312.6 Firming

Rotterdam MGO 597.5 541.3 Firming

Singapore IFO 380 372.0 333.2 Firming

Singapore MGO 601.3 558.0 Firming

5


Interest rates, currencies, PMI

Manufacturing PMI US/China/EU

US$ LIBOR Interest Rate - Maturity 3 Months

USD/CNY

Exchange Rates

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6

Reported transactions list - Wet


Price US$m Name Size Built Yard Buyer Seller Notes

8.3 Kandilousa 46,700 DWT 1995 HHI Undisclosed Eletson Corp

8.5 Iver Expert 45,800 DWT 1997 Halla Sinochem Vroon BV

25.5 Eships Falcon 51,200 DWT 2010 SLS UACC Eships

35.5 Marlin Amber 50,000 DWT 2015 GSI M Sea Capital Trafigura 5y TCB @high $16k/d

35.5 Marlin Amethyst 50,000 DWT 2015 GSI M Sea Capital Trafigura 5y TCB @high $16k/d

53.5 *Hull 1651* 74,000 DWT 2015 STX Prime Tanker Management Navig8 Product Tankers Resale




21.8 Abram Schulte 72,700 DWT 2004 Samsung Union Maritime Schulte Bernhard

37.5 Emerald Summit 74,500 DWT 2013 STX Unknown Greek Quantum Pacific Shipping

8.4 Sporades 66,900 DWT 1993 HHI Unknown Greek Eletson Corp

28.0 Texas Star 115,300 DWT 2003 Sanoyas Yinson Holdings Atlas Maritime Conversion

58.5 *Hull 5402* 114,900 DWT 2015 Daehan Scorpio Tankers Flagship Marine Ventures LR2, Resale

59.5 *Hull 3078* 115,000 DWT 2015 Sungdong Scorpio Tankers Navig8 Product Tankers LR2, Resale



River Pride 105,500 DWT 2007 Sumitomo Minerva Marine Excel Marine LR2

19.3 Stavanger Prince 109,400 DWT 2002 Dalian New Yard Avin International DSD Shipping LR2

55.5 Ariadni 166,100 DWT 2009 Hyundai Samho Delta Tankers Liquimar Tankers

Universal Crown 309,400 DWT 2005 HHI Sinokor HMM Incl TCB

Universal Queen 309,400 DWT 2005 HHI

79.0 Beijing Sunrise 321,300 DWT 2009 Daewoo China VLCC Sinokor

86.0 Dalian Glory 301,900 DWT 2011 IHI China VLCC Sinokor

34.5 Olympic Hawk 306,300 DWT 2000 HHI Oriental Shipping Investments Olympic Shipping

Product

98.0

Suezmax

Aframax

VLCC

7

Reported transactions list - Dry


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.

Price US$m Name Size Built Yard Buyer Seller

2.7 Pontoklydon 28,500 DWT 1992 Imabari Chinese Interests Ocean Freighters Ltd

2.6 Birch 5 26,500 DWT 1997 GSI Chinese Interests Woodstreet Inc

9.5 Young Spirit 31,900 DWT 2005 Hakodate Dock Italian Interests Sato Steamship Co

9.5 Verdant Island 32,100 DWT 2006 Hakodate Dock Dabinovic Shikishima Kisen

6.8 Hui An Hai 30,400 DWT 2010 Chengxi Undisclosed COSCO Tianjin

6.8 Fu An Hai 30,000 DWT 2010 Chengxi Undisclosed COSCO Tianjin

8.9 Glorious Sunrise 28,400 DWT 2007 Shimanami Vietnamese Interests Shikishima Kisen

6.5 New Sailing Star 32,900 DWT 2010 Zhejiang Zhenxing Eddie Steamship COSCO Hunan

4.4 Super Challenge 28,600 DWT 1996 Tadotsu Tsuneishi Chinese Interests Stove Rederi AS

4.3 Birch 4 25,400 DWT 2000 Imabari Undisclosed Woodstreet Inc

3.8 Sanaga 28,200 DWT 1998 Bohai Undisclosed John T Essberger Dry Cargo

3.7 Dobrota 29,300 DWT 1996 Tianjin Xingang Beyaz Denizcilik Ltd Sti Dabinovic

3.0 Med Bridge 28,500 DWT 1990 Imabari Fujian Mainstar Shipping Med Maritime Ltd

14.2 Hudson Trader II 58,100 DWT 2009 Tsuneishi Zhoushan Nomikos AM Nisshin Shipping

4.2 Kyriakos 44,800 DWT 1995 Halla Phoenix Shipping and Trading Epidaurus

14.2 Front Runner 56,000 DWT 2009 Mitsui Tamano Nomikos AM Daiichi Chuo

13.6 CMB Jialing 55,100 DWT 2010 NACKS Nomikos AM Bocimar

3.8 Fany 43,600 DWT 1994 Tadotsu Tsuneishi Chinese Interests Changsung Shipping

7.2 Coposa 46,500 DWT 2002 Oshima Transbulk Management Kotobuki Kaiun

11.7 Lan Hai Chuang Ye 56,800 DWT 2011 Yangfan Zhoushan Chinese Interests Guangdong Lanhai Shipping

11.7 Lan Hai Tuo Zhan 56,800 DWT 2011 Yangfan Zhoushan Chinese Interests Guangdong Lanhai Shipping

4.1 Colchester Castle 45,300 DWT 1996 Jiangnan Changxing Glory Ship Management Pte Navalmar UK

13.7 Gypsum Centennial 49,300 DWT 2001 Hyundai Mipo CSL Group USG Corp

28.3 Gypsum Integrity 47,900 DWT 2009 EISA Algoma Central Corp USG Corp

3.4 Zenovia 43,600 DWT 1992 Tsuneishi Zosen Undisclosed Changsung Shipping

3.8 Orchid Ocean 45,300 DWT 1994 Shin Kurushima Ujina Glory Ship Management Pte Shipping Allied Corp.

15.3 Lowlands Queen 76,600 DWT 2008 Imabari Greek Interests Santoku Senpaku

9.5 Domina 74,000 DWT 2007 Jiangnan Changxing Undisclosed Oak Maritime

9.3 Million Trader 76,300 DWT 2004 Tsuneishi Zosen Avin International Nisshin Shipping

12.5 Medi Singapore 75,400 DWT 2006 Universal MG Shipping Orange Bootes

5.5 Tiara Globe 72,900 DWT 1998 Hudong Zhonghua Chinese Interests Globus Maritime

10.8 Rose Atlantic 75,700 DWT 2005 Sanoyas Astra Shipmanagement Kyokai Kaiun

3.6 GH Prosperity 70,300 DWT 1997 Sanoyas Hengfa Shipping Great Harvest

12.2 Dewi Laksmi 76,000 DWT 2011 GSI Sea Traders Grand Bulk Shipping

13.5 Syriotissa 87,100 DWT 2006 IHI Korean Interests Third Millenium Shipping

18.1 Torm Island 82,800 DWT 2010 Tadotsu Tsuneishi Diana Shipping Shikishima Kisen

25.0 C Prosperity 175,600 DWT 2011 Jiangsu Rongsheng Zodiac Maritime CMES

18.2 Jiang Jun Shan 176,900 DWT 2006 Namura Winning Shipping Fujian Guanhai

43.5 SBI Habano 180,000 DWT 2015 Sungdong Undisclosed Scorpio Bulkers

27.0 Blue Everest 180,100 DWT 2010 Daehan Thenamaris Blue Marine

43.0 SBI Belicoso 180,000 DWT 2015 SWS Diana Shipping Scorpio Bulker

Handymax-Supramax

Handy

Panamax-Post PMX

Capesize

Documents

Monthly S&P Report - Lorentzen & Stemoco AS S&P Report -Shipbrokers and ... 79.0 Beijing Sunrise 321,300 DWT 2009 Daewoo China VLCC Sinokor 86.0 Dalian Glory 301,900 DWT 2011 IHI China