Weekly Market Report

Transcription

1 Weekly Market Report Week 4/218 (1 October 5 October) Comment: Refineries plans for IMO 22 index comment page 2 chartering dry cargo 3 tankers 6 containers 8 sale & purchase newbuildings / finance 9 secondhand / demolition 1 commodities news 11 prices 13 Follow us on: linkedin.com/company/banchero-costa twitter.com/banchero_costa network chartering - sale&purchase - ship finance - insurance - agency - research - and more...

2 comment Refineries plans for IMO 22 Questions remain ahead of IMO 22 In recent weeks, IMO 22 has dominated headlines as the deadline draws ever closer, and the intentions of major shipowners become clearer on whether to install scrubbers or rely on low sulphur fuels come 22. The scale of the issue is staggering, with the consumption of 3.5 percent high sulphur fuel oils (HSFO) by the global shipping fleet estimated at 3.3 million barrels per day (bpd) at present. The decision has been and continues to be a difficult one to make for most companies, as they each come to their own conclusion for the multitude of questions that remain, even as the new rules come into force at the end of next year: Will refineries be able to produce enough low sulphur fuels, and what will happen to the production of HSFOs? What will the price spread between HSFO and low sulphur alternatives be like? Would scrubbers breakeven, and if so, when? If installing open loop scrubbers, will individual port regulations differ in how scrubber effluent is dealt with? At least for refinery plans, a recent Reuters survey appears to shed some light, although the sufficiency and speed of changes in global refinery capacity remains a question. Discount of HSFO to low sulphur fuels subject to change as refiners expected to cut HSFO output 6 percent of the 33 refineries contacted by Reuters in a global survey still intend to produce HSFO come 22, especially as demand for the oil from power generation and general users are expected to grow. However, refineries intend to cut such production as they expect scrubber uptake to remain fairly limited and the value of HSFO to drop. While there has been an increasing number of news reports detailing scrubber uptake, ExxonMobil still forecasts more than 95 percent of the shipping industry without scrubbers. Thus, contrary to assumptions of an oversupply of HSFO come 22, the scale of this glut might be less than originally anticipated as refineries take active steps to reduce HSFO production. The discount of HSFO to other low sulphur alternatives is thus subject to change depending on how the demand-supply dynamics play out, which could introduce much uncertainty into the payback period for shipowners who choose to install scrubbers. Some refineries are upgrading to produce more low sulphur fuels, but will this be enough? In order to reduce HSFO production, just over half of the refiners surveyed plan to upgrade their plants to further process fuel oil to produce more volumes of higher value products such as gasoline and diesel. This tallies with news of an expected pick up of refinery upgrading through 2H 218 and early 219 in Europe and the former Soviet Union (FSU), which may impact crude demand and oil products supply in the short term. In India, upgrading works have also been underway. 3 state-run Indian energy firms Indian Oil Corp, Bharat Petroleum and Hindustan Petroleum announced in 216 plans to spend $2 billion on refinery upgrading by 222 to process fuel oil into gasoline and diesel. Private refiners Reliance Industries and Essar Oil have also invested heavily to build advanced refineries which produce gasoline at the expense of fuel oil. There are thus expectations that India, which has traditionally been a net exporter of fuel oil, may soon turn into a net importer of fuel oil. However, it remains uncertain if such upgrading works will provide sufficient processing capacity, given the lack of adaptive capex in recent years. The time frame from engineering, approval, and installation of upgrades can take between 3-5 years, which means it could be too late for some refineries to upgrade in time for the new rules. Cost of upgrading means some refineries will employ other methods Two-thirds of the 16 refiners who responded to a question about how much investment they plan to pump into their plants to produce more ultra-low and low-sulphur fuel oil, said they plan to spend less than $1 million. 5 refiners are investing between $5 million and more than $1 billion in such projects. With such high costs involved, some refiners have said they will increase processing of sweet crudes in order to reduce the sulphur content in their products output. Crude supplies from North/ West Africa, Brazil, and parts of the North Sea are expected to be the most suitable, and thus likely to command a premium over sour crudes. The crude trade will thus see major changes as sweet crudes become more popular, and also if low fuel oil margins force some refiners to reduce runs of their crude distillation units, or to switch configuration to produce other products in higher demand. market report - week 4/218 2

3 dry cargo chartering Capesize Market Despite Chinese holidays, activity in the Pacific basin was relevant and the market quite volatile. During the first part of last week rates went from $8.5/mt to low $9s/mt on the key route from West Australia to China, but eased down upon week closing in the high $8s/mt. The "catch up" of the rates in Pacific was not followed by similar movements on Tubarao-Qingdao trade which was capped by too many ballasters for October dates which allowed Vale to cover their cargoes at an average $2/mt for the first half of October dates. For vessels with ETA Brazil during 2nd half of October a premium of around $.5/Mt was noticed. The Atlantic market was quiet with fronthaul rates in the mid/high $3,s/d and mid/high teens for Transatlantic RV. Rates Unit 5-Oct 28-Sep W-o-W Y-o-Y BCI TC Avg. usd/day 18,26 18,35-1.8% -1.6% C8 Transatlantic r/v usd/day 16,944 19, % -14.5% C14 China-Brazil r/v usd/day 18,15 19, % -1.8% C1 Pacific r/v usd/day 18,795 16, % -9.8% 1 Year TC Period usd/day 19,75 19,75 +.% +27.4% Panamax Market BCI TC and Capesize 1-YR Period (usd/day) 35, 28, 21, 14, 7, 1-YR TC BCI TC Many expected a slow week with little excitement due to the long Chinese holidays. Indeed at the beginning of the week the market was slow, but then both activity and rates started to pick up. South America continued to fix many ballasters from the East and ships open India and South-East Asia got good rates basis dop dely. A modern Kamsarmax was fixed at $16,8/d from Surabaya. In North Atlantic demand remained robust with many fresh cargoes; a Kamsarmax was fixed from the Continent at $17,/d for a round voyage. The Pacific was also active with good volumes from Australia and Indonesia to India; rates increased a lot and charterers were forced to fix tonnage in other areas to compensate the lack of supply. Rates Unit 5-Oct 28-Sep W-o-W Y-o-Y BPI TC Avg. usd/day 13,849 13, % +28.1% BPI 82 TC Avg. usd/day 15,659 15, % n.a. P1 Transatlantic r/v usd/day 14,69 14,6 +4.5% +5.% P2 Skaw-Gib Trip East usd/day 21,955 21, % +24.2% P3 Pacific r/v usd/day 13,525 13, % +18.7% 1 Yr TC Period Panamax usd/day 13, 12,5 +4.% +8.3% 1 Yr TC Period Kamsarmax usd/day 15, 14,5 +3.4% +15.4% market report - week 4/218 BPI TC and Panamax 1-YR Period (usd/day) 15, 12, 9, 6, 3, 1-YR TC BPI TC 3

4 Handy Supramax Far East Pacific India S Africa N Europe Mediterranean US Atlantic South America dry cargo chartering Supramax & Handysize Market The USG market kept improving from early September both for Handysize and Supramax. A short tonnage list compared to a long list of cargoes makes pretty easy to predict an improving market moving forward. The ECSAm market remains healthy with Tess58 fixing $2/2,5/d basis dely aps ECSAm to Med and Cont and Ultramax getting $21,5/d. Trips to Spore/Japan range keep pushing the market higher with Supramax fixing $16,/d + 6, bb and Ultramax getting $17,/d + 7, bb. Handysize is not as good, but healthy rates are registered around $16,5/16,75/d for trip to Cont/Med and $18,5/18,75/d to F East. The Cont market registered good volumes of activity both on Handy and Supramax sizes with rates increasing a little so far. Fertilizers trades, again, dominated the Handysize activity in Cont and a modern 34, dwt was fixed at $9,5/d basis dely N Cont for a TC trip via Baltic to USG. A 36, dwt was fixed and failed at $16,/d basis dely Baltic to ECSAm. On period a 32, dwt got $1,/d for a short period basis dely Cont and redely Atlantic. On Supramax the scrap trade increased around $1,/d and a 57, dwt got $14,/d, no fixtures were reported on fronthaul. The Med and BSea market was a mixed bag for Handies; a 37, dwt is on subs basis dely low Adriatic for a trip to BSea and back to Adriatic at $12,/d with grains and a 33, dwt asking $16,/d basis dely Cannakkale for a similar trip. On Supramax the market remained relatively steady although the tonnage list is getting quite thin. A 55, dwt was fixed at $23,/d basis dely Cannakkale for a trip to F East. During last week the MEG and Indian ocean market maintained its positive trend for large units; a nice Ultramax was fixed for period at $15,/d basis dely WC India and there are still quite a few orders out of MEG to F East, WC India and EC India, but tonnage on prompt dates is scarce. On Handysize only a few ships were covered and the situation appears to be more balanced with rates increasing a little. Richards Bay coal exports were very active and with the help coming from ECSAm Ultramax were fixed in excess of $14,/d + 4, bb for India destinations. Chinese holidays during the first 7 days of October had a strong impact and almost froze shipping activity in the Pacific basin and the limited activity reported showed contradictory levels. Indonesia coal shipments to China showed a 53,4 dwt fixed at a good $15,/d basis delivery near the loading port. A similar unit with similar dely got a lower $11,9/d for a trip to Bangladesh. A 55,7 dwt Dolphin type got an interesting $14,5/d for a trip from Indonesia to Bangladesh and an Ultramax got $13,/d basis dely Thailand for a trip from Indo to Philippines. No fixtures where reported on smaller units which appears to be fixed at unchanged levels. Rates market report - week 4/218 Unit 5-Oct 28-Sep W-o-W Y-o-Y BSI TC Avg. usd/day 13,327 13, % +23.8% S4A 58 USG-Skaw/Pass usd/day 2,747 2, % +32.6% S9 58 WAF-ECSA-Med usd/day 12,546 12, % +15.% S1B 58 Canakkale-FEast usd/day 23,493 23, % +43.7% S11 58 Pacific r/v usd/day 11,65 11, % +19.8% 1 Year TC Period usd/day 12,25 12,25 +.% +15.% BHSI TC Avg. usd/day 9,26 9, % +3.7% 1 Year TC Period usd/day 9,85 9,85 +.% +19.4% 16, BSI TC and Supramax 1-YR Period (usd/day) 12, 8, 4, 1-YR TC BSI TC 12, BHSI TC and Handysize 1-YR Period (usd/day) 9, 6, 3, 1-YR TC BHSI TC 4

5 Handysize Supramax Panamax Capesize dry cargo chartering Dry Bulk FFAs (Baltic Forward Assessments) Unit 5-Oct 28-Sep W-o-W Premium/ Discount Oct (18) usd/day 18,882 21, % +4.7% Nov (18) usd/day 21,999 25, % +22.% Dec (18) usd/day 22,429 24, % +24.4% Q1 (19) usd/day 15,17 15, % -15.8% Q2 (19) usd/day 15,962 16, % -11.5% Q3 (19) usd/day 21,17 21,8-2.9% +17.4% Cal 19 usd/day 19,997 2, % +1.9% Cal 2 usd/day 2,916 21, % +16.% Cal 21 usd/day 17,595 17,82-1.3% -2.4% Capesize Forward Curve (usd/day) 32, 24, 16, 8, Oct-17 Oct-18 Oct-19 Oct-2 Oct (18) usd/day 13,55 12, % -2.2% Nov (18) usd/day 13,92 12, % -5.5% Dec (18) usd/day 12,763 12, % -7.8% Q1 (19) usd/day 12,238 11, % -11.6% Q2 (19) usd/day 13,18 12, % -5.4% Q3 (19) usd/day 12,613 12, % -8.9% Cal 19 usd/day 12,85 12, % -7.2% Cal 2 usd/day 12,371 12, % -1.7% Cal 21 usd/day 1,746 1, % -22.4% Panamax Forward Curve (usd/day) 16, 12, 8, 4, Oct-17 Oct-18 Oct-19 Oct-2 Oct (18) usd/day 13,483 13, % +1.2% Nov (18) usd/day 13,4 12, % +.5% Dec (18) usd/day 12,988 12, % -2.5% Q1 (19) usd/day 11,846 11, % -11.1% Q2 (19) usd/day 12,875 12, % -3.4% Q3 (19) usd/day 12,492 12, % -6.3% Cal 19 usd/day 12,628 12, % -5.2% Cal 2 usd/day 12, 11, % -1.% Cal 21 usd/day 1,95 1, % -17.8% Supramax Forward Curve (usd/day) 16, 12, 8, 4, Oct-17 Oct-18 Oct-19 Oct-2 Oct (18) usd/day 9,356 9, % +1.% Nov (18) usd/day 9,563 9,55 +.1% +3.3% Dec (18) usd/day 9,25 9,25 +.% -.1% Q1 (19) usd/day 8,838 8, % -4.6% Q2 (19) usd/day 9,413 9, % +1.7% Q3 (19) usd/day 9,294 9, % +.4% Cal 19 usd/day 9,332 9,33 +.3% +.8% Cal 2 usd/day 9,225 9, % -.4% Cal 21 usd/day 9,81 9,63 +.2% -1.9% Handysize Forward Curve (usd/day) 12, 9, 6, 3, Oct-17 Oct-18 Oct-19 Oct-2 market report - week 4/218 5

6 Aframax Suezmax VLCC tanker chartering Crude Oil Tanker Market Thanks to a very active second half of the week, the VLCC Middle East Gulf market saw a sudden spike in rates, which quickly reached WS85 for East discharge and mid WS3s for Western destinations. Activity was stable in West Africa, but the good news coming from MEG had a positive impact allowing rates to increase up to the low WS8s for East discharge. In the Caribbs vessels' availability got slimmer and rates kept increasing, charterers had to pay up to $8.5 mln for S. Korea discharge. Also Suezmax registered a rather active week: in West Africa rates constantly firmed up to the low WS9s for UKC discharge. In the Mediterranean Sea stable demand allowed rates to firm up to around WS15 off Black Sea. Aframax activity slowed in Med and despite owners' resistance rates slowly softened and finally bottomed around WS17. In North Sea, after a slow start, we've seen more fresh cargoes during the second half of the week, and rates partially recovered closing Around WS15 for CrossCont and WS9 off Baltic. Even if it briefly seemed to move upwards, the Caribbean market lost some ground and in the end settled around WS13. Rates Unit 5-Oct 28-Sep W-o-W Y-o-Y TD1 MEG-USG ws % +25.8% TD1 MEG-USG usd/day -5,277-13, % -2.1% TD2 MEG-Spore ws % +37.8% TD3C MEG-China ws % +38.7% TD3C MEG-China usd/day 38,517 18, % +59.1% TD15 WAF-China ws % +31.% Avg. VLCC TCE usd/day 16,62 2, % +74.6% 1 Year TC Period usd/day 25, 22, +13.6% -3.8% TD6 BSea-Med ws % +26.4% TD6 BSea-Med usd/day 2,196 18, % +19.6% TD2 WAF-Cont ws % +24.6% MEG-EAST ws % +.% MEG-WEST ws % -14.3% Avg. Suezmax TCE usd/day 17,575 13, % +81.4% 1 Year TC Period usd/day 18, 16, +12.5% +.% TD7 NSea-Cont ws % +61.6% TD7 NSea-Cont usd/day 2,187 3, % -22.9% TD17 Baltic-UKC ws % +22.2% TD17 Baltic-UKC usd/day 1,14 7, % +173.% TD19 Med-Med ws % +6.% TD19 Med-Med usd/day 6,277 8,74-28% -4.2% TD8 Kuwait-China ws % -2.9% TD8 Kuwait-China usd/day 2,464 3, % -68.3% TD9 Caribs-USG ws % +13.4% TD9 Caribs-USG usd/day 6,645 11, % -.3% Avg. Aframax TCE usd/day 5,751 7, % -9.% 1 Year TC Period usd/day 15, 15,5-3.2% +.% market report - week 4/218 4, VLCC MEG-Far East (usd/day) 3, 2, 1, TD6 Suexmax BSea-Med (usd/day) 3, 2, 1, -1, TD19 Aframax Med-Med (usd/day) 3, 2, 1, -1, 1 YR TC Period (usd/day) 3, 25, 2, 15, 1, Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 VLCC Suezmax Aframax 6

7 Dirty Clean tanker chartering Product Tanker Market The Long Range market remained stable East of Suez: LR2 owners were unable achieve more than WS15 on MEG/Japan (around $5,5/d TCE) while LR1 remained at WS12 (around $5,5/d TCE). Rates for MEG/UKC on LR2 also remained unchanged around $1.85/1.9 mln. West of Suez rates for both LR1 and LR2 didn t register significant changes settling at $1.75 mln and $1.95 mln for UKC /Japan. Strong activity for clean Handysize vessels both in Med and Cont and tight tonnage lists lead to increasing rates: CrossMed rates went up to the mid 3@14, BSea-Med 3@17, Baltic-UKC 3@15 and CrossCont 3@14. Rates for clean MR from Cont for TransAtlantic and West African destinations spiked to WS15 and WS165 basis 37, mts by the end of the week; on Friday however 2 fixtures were reported at WS14 and WS15 slowing Owners' enthusiasm for the following week. While imports to US kept improving, voyages back to Europe fell in the mid WS7 basis 38, mts. Another busy week for dirty Handies and MRs in Med: tonnage availability was still very tight and the rates for CrossMed and BSea-Med kept going up to 3@215 for CrossMed and 3@235 for BSea-Med. Also the MR market has been busy and rates for CrossMed went to 45@15 and 45@155 from BSea. In UKC Handies gained 5WS points up to 3@155 for the CrossUKC routes. The Panamax market was rather quiet with rates for UKC or Med TA remaining at 55@115 level. Rates Unit 5-Oct 28-Sep W-o-W Y-o-Y TC1 MEG-Japan ( 7 5 k ) ws % -27.6% TC1 MEG-Japan ( 7 5 k ) usd/day 4,648 6, % -7.6% TC8 MEG-UKC ( 6 5 k ) usd/mt % -6.6% TC5 MEG-Japan ( 5 5 k ) ws % -8.7% TC5 MEG-Japan ( 5 5 k ) usd/day 6,137 6, % -36.9% TC2 Cont-USAC ( 3 7 k ) ws % +26.6% TC2 Cont-USAC ( 3 7 k ) usd/day 6,756 2, % +67.8% TC14 USG-Cont ( 3 8 k ) ws % +11.% TC14 USG-Cont ( 3 8 k ) usd/day -2,95-1, % -88.3% TC9 Baltic-UKC ( 2 2 k ) ws % +2.2% TC6 Med-Med ( 3 k ) ws % -18.1% TC7 Spore-ECAu ( 3 k ) ws % -37.% TC7 Spore-ECAu ( 3 k ) usd/day 6,552 7, % -53.8% TC11 SK-Spore ( 4 k ) usd/mt % -21.6% MR Pacific Basket usd/day 3,622 4, % -71.8% MR Atlantic Basket usd/day 7,419 5, % +47.8% LR2 1 Year TC Period usd/day 15,5 15,5 +.% +.% MR2 1 Year TC Period usd/day 13, 13, +.% -1.3% TD12 Cont-USG ( 5 5 k ) ws % +15.4% TD18 Baltic-UKC ( 4 K ) ws % -8.2% BSea-Med ( 3 k ) ws % +41.9% Med-Med ( 3 k ) ws % +37.9% Delays at Turkish Straits for Daylight Restricted Vessels Unit 5-Oct 28-Sep W-o-W Y-o-Y Northbound days % % Southbound days % +1.% market report - week 4/218 TC1 LR2 MEG-Japan (usd/day) 2, 15, 1, 5, MR Atlantic Basket (usd/day) 2, 15, 1, 5, MR Pacific Basket (usd/day) 2, 15, 1, 5, 1 YR TC Period (usd/day) 16, 15, 14, 13, 12, Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 LR2 MR2 7

8 containers Containership Market New figures covering the second quarter 218 suggest that ocean freight demand from Asia to the Middle East and South Asia is in a steep decline. In the chartering market we registered decreasing of charter rates in the all sizes. Recent Fixtures Vessel Name Built TEUs TEU@14 Gear Fixture Period Rates MP The Brady no fixed to Hapag L. 5-7 m $1,/d Ms Tiger no extended to Cosco 4-6 m $11,/d Cape Orient yes fixed to Hmm 5-8 m $13,85/d Cape Nabil no extended to Ts Line 4-6 m $9,5/d Warnow Mate no extended to Evergreen 5-7 m $9,1(d Elan no extended to Wec 5-6 m Eur 6,4/d VHSS Containership Timecharter Assessment (source: Hamburg Shipbrokers Association) Unit 4-Oct 27-Sep W-o-W Y-o-Y ConTex index % +2.% 425 teu (1Y, g less) usd/day 12,1 12, % +35.8% 35 teu (1Y, g less) usd/day 11,719 11,72 +.1% +4.% 27 teu (1Y, g less) usd/day 11,365 11, % +21.6% 25 teu (1Y, geared) usd/day 11,1 11,77 -.6% +24.9% 17 teu (1Y, geared) usd/day 9,823 9,93-1.1% +27.9% 11 teu (1Y, geared) usd/day 7,98 7, % +12.2% Shanghai Containerized Freight Index (source: Shanghai Shipping Exchange) Unit 5-Oct 28-Sep W-o-W Y-o-Y Comprehensive Index index n.a. 871 n.a. n.a. Services: Gearless - 1 YR TC Period (usd/day) 14, 12, 1, 8, 6, 4/1/17 4/2/18 4/6/18 4/1/ Geared - 1 YR TC Period (usd/day) 13, 11, 9, 7, 5, 4/1/17 4/2/18 4/6/18 4/1/ Shanghai - North Europe usd/teu n.a. 735 n.a. n.a. Shanghai - Mediterranean usd/teu n.a. 767 n.a. n.a. Shanghai - WC USA usd/feu n.a. 2,332 n.a. n.a. 1, 9 Shanghai Container Freight Index Shanghai - EC USA usd/feu n.a. 3,319 n.a. n.a. Shanghai - Dubai usd/teu n.a. 354 n.a. n.a. Shanghai - Santos usd/teu n.a. 976 n.a. n.a. Shanghai - Singapore usd/teu n.a. 138 n.a. n.a market report - week 4/218 8

9 sale & purchase Newbuilding Market Santoku Shipping was reported to have ordered at SWS another 2 units Capesize vessels bringing the total of its orders there to 4 units, vessels are tier III and deliveries are expected in 22. One Kamsarmax was ordered by Shunzan Kaiun at Sanoyas shipbuilding at low $3s mln, delivery during the second half of 22. Norden placed an order for 2 Ultramax 62, dwt at Oshima for delivery March and June 22. Doun Kisen has also been reported to have declared the option for 2 Ultramax Sdari 63,5 dwt at Nantong Xiangyu, for delivery 22, the vessels are Tier II and the price around $25 mln each. Hyundai Merchant Marine contracted 2 containerships at 3 S. Korean yards; all ships will be both scrubbers and LNG ready and are expected to be delivered within 1H22: Samsung will build 5 x 23, teu, deliveries September 22, price $154.6 mln each; DSME another 7 x 23, teu dely August 22, price $155.5 mln each and HHI 8 x 14, teu dely June 221 at $121.5 mln each. Newbuilding Reported Orders Type Size Built Yard Buyers Price Comment Bulk 186, 22 SWS Santoku Shpg n.a. Tier III Bulk 81, 2H22 Sanoyas Shunzan Kaiun Low $3 Bulk 62, 22 Oshima Norden n.a. Opt. declared Bulk 62, 22 Nantong Xiangyu Doun Kisen $25 Tier II Cont 388, teu 22/21 3 S. Korean yards HMM $2.8 bn Scrubber & LNG ready Indicative Newbuilding Prices (China) Unit 1-Sep-18 M-o-M Y-o-Y Capesize usd mln % +8.5% Ultramax usd mln % +9.3% Supramax usd mln % +9.4% VLCC usd mln % +7.2% LR2 Coated usd mln % +6.5% MR2 Coated usd mln % +2.8% Interest Rates Libor USD Libor Euro Euribor Euro 6 Months Months Interest Rate Swaps 3 yrs 5 yrs 7 yrs 1 yrs 15 yrs 2 yrs USD Euro Exchange Rates 5-Oct 28-Sep W-o-W Y-o-Y USD/Euro % -2.% Yen/USD % +.8% SK Won/USD 1,131 1, % -1.% market report - week 4/218 Newbuilding Prices (usd mln) Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Ultramax LR2 MR2 USD/Euro Exchange Yen/USD Exchange

10 sale & purchase Secondhand Market A few interesting sales were recorded for dry bulk tonnage. Starting from Kamsarmax, the Japanese controlled Sky Jade 81, dwt, built 21 by Universal was sold to clients of Minsheng for a price between $18.5/19 mln. On Ultramax the JP Morgan controlled Sage Baylcorom 63, dwt built 215 by Dayang is reported sold to JME Navigation of Greece at $22.95 mln. The Medi Firenze, Tess 58, built 28 by Tsuneishi Cebu was committed at a level around $13.3 mln whilst two Dolphin 57, the Guardianship and the Gladiatorship 57, dwt built 21 and 211 by Jinling were reported at $23 mln enbloc. A private sale was reported for a 21 Kanda OHBS Handy bulker 32, dwt, the vessel was controlled by Japanese owners and sold to Middle Eastern buyer at $11.8 mln. On the tanker side there is not much to report, the most interesting deal is the sale to Minsheng of 2 VLCCs DS Venture / DS Vision 297, dwt, built 211 at Dalian, the price reported is in the mid/high $5 mln with 7/1 years TC to Cosco. Secondhand Reported Sales TYPE VESSEL NAME DWT BLT YARD BUYERS PRICE NOTE Bulk Energy Midas 77, Misui Far Eastern buyers 6.5 Bulk Double Prosperity 76, 25 Imabari Middle Eastern buyers 1.8 Bulk Angelic Grace 74, 21 Hudong Greek buyers 5.5 Bulk Sage Baylorcom 63, Yangzhou Dayang Greek buyers Bulk Medi Firenze 58, 28 Tsuneishi Cebu Indonesian buyers 13.3 Bulk Greenfinch 32, Kanda Middle Eastern buyers 11.8 Bulk Golden Kiku 29,7 25 Shikoku Far Eastern buyers 7.5 Sold at eletronic auction Open hatch, box shaped Crude Front Ariake 298,53 21 Hitachi Undisclosed 2.7 Chem Global Mercury 12, Higaki South Korean buyers 1.3 ST/ST Baltic Secondhand Assessments Unit 8-Oct 1-Oct W-o-W Y-o-Y Capesize usd mln % +1.2% Panamax usd mln % +8.1% Supramax usd mln % +9.5% VLCC usd mln % +1.8% Aframax usd mln % +.8% MR Product usd mln % +1.5% Baltic Demolition Assessment (Subcontinent) Unit 8-Oct 1-Oct W-o-W Y-o-Y Dry Bulk usd/ldt % +1.2% Dirty Tanker usd/ldt % +1.3% Clean Tanker usd/ldt % +11.4% market report - week 4/218 Secondhand Values (usd mln) /1/17 8/2/18 8/6/18 8/1/18 Panamax Aframax MR SubCon Demo Assessment (usd/ldt) /1/17 8/2/18 8/6/18 8/1/18 Dirty Tnk Clean Tnk Dry Bulk 1

11 news Dry Bulk Commodities China to cut import tariffs on wide range of products China will cut import tariffs on textile products and metals, including steel products, to 8.4 percent from 11.5 percent, effective Nov. 1, the finance ministry said on Sunday. Beijing has pledged to take steps to increase imports this year amid rising tension with some of its biggest trade partners, such as the United States. Steel scrap usage rises year on year in H1, notably in China: BIR Steel scrap usage rose year on year in the first half of 218 in certain key consuming countries including China, the US, Japan, Turkey and Russia, while staying stable in the European Union and declining in South Korea, the Bureau of International Recycling said in a quarterly report. Crude steel production, meanwhile, increased in all these countries and regions compared with the first half of 217, Rolf Willeke, BIR Statistics Advisor said, citing worldsteel figures which put global steel crude production 4.6% higher at million mt. EU extends duties on steel pipes from Russia, Ukraine The European Commission said on Wednesday it had extended duties on imported steel and iron pipes and tubes from Russia and Ukraine for another five years. The duties on seamless pipes range from 24.1 to 35.8 percent for imports from Russia and from 12.3 to 25.7 percent for imports from Ukraine. Australia expects resource exports to hit record $182 bln in Australia's government expects the nation's resource and energy exports to hit a record of A$252 billion ($182 billion) in , buoyed by climbing prices for commodities such as natural gas and by a weaker Australian dollar. However, the country's Department of Industry also said in a report that the value of such exports would edge back to around A$238 billion in even as volumes rise again, pulled down as growing global supply and concerns over demand pressure prices. The figure for was A$227 billion. Rio Tinto, Japanese partners to invest $1.6 bln on Australian iron ore Rio Tinto and its joint venture partners, Mitsui & Co and Nippon Steel & Sumitomo Metal, will spend about $1.55 billion to maintain production capacity at two iron ore projects in Western Australia. Rio will invest a total of $82 million to develop the projects at the Robe River Joint Venture in Australia's mineral rich Pilbara region, the Anglo- Australian miner said in a statement on Monday. Peabody says Q4 production to end at Australian North Goonyella after fire US miner Peabody Energy said it does not expect any fourth-quarter production at its North Goonyella metallurgical coal mine in Australia as the result of damage sustained from a fire. The company said it has a small amount of inventory to ship, but expects "with strong performance from other mines," it will maintain its full-year 218 met coal sales volumes of million st. Brazil soy forward sales way ahead of last year - consultancy Forward sales of the new Brazilian soybean crop are well ahead of last year's levels, as farmers take advantage of favorable prices and the United States-China trade dispute to clinch deals early in the season, consultancy Safras & Mercado said on Friday. Brazilian soybean producers have sold 27.3 percent of the crop that will start to be collected around January, compared with 14.1 percent that had been sold at this time last year, Safras said in a report. Saudi Arabia plans to allow private sector to import feed barley - SPA Saudi Arabia, the world's largest importer of feed barley, will restore a private sector role in the trade after two years during which it was handled solely by the state, Minister of Environment, Water and Agriculture Abdel Rahman Al-Fadli was quoted as saying on Sunday. Saudi Arabia used to import its feed barley through the private sector but since 216 the responsibility for imports has been held by the state grain buyer, the Saudi Grains Organisation (SAGO). Russia has no immediate plans to suspend grain loading points in Krasnodar - RIA Russia's agriculture safety watchdog has no immediate plans to suspend the operation of grain loading points in Black Sea ports near the city of Krasnodar, a regional office of the watchdog was quoted as saying by RIA news agency. Chicago wheat prices rose on Wednesday after the watchdog said on Tuesday it could temporarily suspend operations of 3 inland grain loading points in two of Russia's top grain exporting regions - Krasnodar and Rostov. BHP sees major copper demand boost from China's widening belt and road China's overseas expansion will spread over land that is home to more than half the world's population, potentially boosting copper use by 1.6 million tonnes, or roughly 7 percent of annual demand, major miner BHP said on Thursday. BHP has analysed the impact of China's Belt and Road Initiative (BRI), a network of overseas construction projects, on commodity demand on the basis of a database it constantly updates. Source: Thomson Reuters/ Platts market report - week 4/218 11

12 news Oil & Gas OPEC oil output boost in September limited by Iran losses - Reuters survey OPEC delivered only a limited increase in oil production in September, a Reuters survey has found, as a cut in Iranian shipments due to U.S. sanctions offset higher output in Libya, Saudi Arabia and Angola. The 15-member Organization of the Petroleum Exporting Countries pumped million barrels per day in September, the survey on Monday found, up 9, bpd from August's revised level and the highest this year. U.S. crude oil shipments to China "totally stopped" amid trade war - shipping exec U.S. crude oil shipments to China have "totally stopped", the President of China Merchants Energy Shipping Co (CMES) said on Wednesday, as the trade war between the world's two biggest economies takes its toll on what was a fast growing businesses. Washington and Beijing have slapped steep import tariffs on hundreds of goods in the past months. And although U.S. crude oil exports to China, which only started in 216, have not yet been included, Chinese oil importers have shied away from new orders recently. U.S. actively considering waivers on Iran oil sanctions The Trump administration is actively considering waivers on sanctions it will reimpose next month for countries that are reducing their imports of Iranian oil, a U.S. government official said on Friday. The administration withdrew from a deal over Tehran's nuclear program in May and is unilaterally reimposing sanctions on Iran's crude oil consumers on Nov. 4. India to keep buying Iranian oil despite U.S. sanctions - sources India will buy 9 million barrels of Iranian oil in November, two industry sources said, indicating the world's third-biggest oil importer will continue purchasing crude from the Islamic republic despite U.S. sanctions coming into force on Nov. 4. "Refiners have placed November nominations to lift 1.25 million tonnes (about 9 million barrels) of oil from Iran," one of the sources said. Asia scrambles for West African oil before U.S. sanctions hit Iran Shipments of West African oil to Asia are set to hit a two-month high in October as Chinese refineries scramble for alternatives to Iranian crude before U.S. sanctions take effect on Nov. 4. Loadings for Asia will rise to 2.52 million barrels per day (bpd) in October, equivalent to 75 percent of total output from Angola, Nigeria, Republic of Congo, Ghana and Equatorial Guinea, based on Reuters calculations, shipping brokers and Refinitiv Eikon data. Citgo, Valero drive up U.S. purchases of Venezuelan oil in September Venezuela's September crude sales to the United States rose to their highest in over a year, boosted by purchases by Citgo Petroleum, the U.S. refining arm of Venezuela's state-run PDVSA, and Valero Energy, according to Refinitiv Eikon trade flows data. A collision in August at a dock of Venezuela's main oil port of Jose has limited exports in large vessels to Asia, spurring loading of more medium-size tankers including those typically covering routes to the United States. U.S. crude oil stocks jump 8 million barrels last week U.S. crude oil stockpiles rose by their most in a week since March 217, driven in part by a build at the Cushing, Oklahoma, hub and a drop in exports, the Energy Information Administration said on Wednesday. Crude inventories jumped by 8 million barrels in the week to Sept. 28, four times analysts' expectations. Big is back: Canada's mega LNG project gets green light on Asia demand The approval of a massive liquefied natural gas export (LNG) terminal in Canada is being touted as the return of the mega-project, ending a lean period where low energy prices and oversupply concerns kept investors from taking big risks. The C$4 billion ($31 billion) LNG Canada project led by Royal Dutch Shell was given the go-ahead by the Anglo- Dutch giant and its partners, making it the fuel's first major new project to win approval in recent years. At least 25, T of gasoline seen booked for Singapore arrival - data Caught between soaring crude oil prices and a wave of fresh gasoline supply bound for an already well stocked market, Asia's gasoline margins have sunk to their lowest in two and a half months, industry sources said. At least 25, tonnes of European gasoline, ordered up earlier during a period of tighter supply, are currently en route for Singapore, data from Refinitiv Eikon shows. Singapore plans to tighten controls in maritime fuel industry Singapore plans to apply stricter control measures to the marine fuels sector, a move that industry sources say could boost transparency in a notoriously opaque industry. Singapore was the first port to mandate the use of mass flow meters (MFMs) in 217 for marine, or bunker, fuel oil sales from barges to the end-user vessels. The proposed measures would extend the use of MFMs to fuel transfers from oil terminals to the bunker barges. Source: Thomson Reuters/ Platts market report - week 4/218 12

13 MGO IFO 18 IFO 38 commodities Bunker Prices Unit 5-Oct 28-Sep W-o-W Y-o-Y Rotterdam usd/t % +53.% Gibraltar usd/t % +49.7% Singapore usd/t % +55.2% Rotterdam usd/t % +54.4% Gibraltar usd/t % +5.7% Singapore usd/t % +5.4% Rotterdam usd/t % +42.1% Gibraltar usd/t % +39.1% Singapore usd/t % +47.2% Oil & Gas Prices Unit 5-Oct 28-Sep W-o-W Y-o-Y Crude Oil Brent usd/bbl % +49.9% Crude Oil WTI usd/bbl % +49.6% Crude Oil Dubai usd/bbl % +52.3% Natural Gas Henry Hub usd/mmbtu % +11.5% Gasoline Nymex usd/gal % +32.7% ICE Gasoil usd/t % +39.8% Naphtha Tokyo usd/t % +42.4% Jet-Kerosene Asia usd/bbl % +46.9% Coal Prices Unit 5-Oct 28-Sep W-o-W Y-o-Y Richards Bay usd/t % +16.2% Newcastle usd/t % +16.7% Coking Coal Australia usd/t % +17.5% Iron Ore and Steel Prices Unit 5-Oct 28-Sep W-o-W Y-o-Y Iron Ore (Platts) usd/t % +1.7% Iron Ore rmb/t % +12.8% Rebar in China rmb/t n.a. 4,496 n.a. n.a. Plate in China rmb/t n.a. 4,465 n.a. n.a. HR Coil in China rmb/t n.a. 4,46 n.a. n.a. CR Sheet in China rmb/t n.a. 4,88 n.a. n.a. Agricultural Unit 5-Oct 28-Sep W-o-W Y-o-Y Wheat usd/t % +18.2% Corn usd/t % +5.4% Soybeans usd/t % -1.5% Palm Oil usd/t % -17.% market report - week 4/218 Bunker Singapore (usd/t) IFO 38 IFO 18 MGO Brent and WTI Oil Prices (usd/bbl) Brent WTI Iron Ore and Coal Prices (usd/t) Steam Coal Iron Ore Steel Prices in China (rmb/t) 5, 4,5 4, 3,5 3, Rebar Plate Wheat and Corn Prices (usd/t) Corn Wheat 13

14 network head office: via pammatone, genoa (italy) phone: [5631-1] dry - capesize capes@bancosta.com research research@bancosta.com dry - panamax capespmx@bancosta.com ship finance financial@bancosta.com dry - handy handy@bancosta.com insurance insurance@bancostains.it dry - operation dryoper@bancosta.com p&i hull@bancostains.it tankers tanker@bancosta.com yachting yachts@bancosta.it containers containers@bancosta.com agency bcagy@bcagy.it s&p salepurchase@bancosta.com ship repair shipyard@bcagy.it offshore offshore@bancosta.com towage/salvage shipyard@bcagy.it bancosta uk bancosta monaco bancosta sa medioriental london monte carlo geneva dubai phone: phone: phone: phone: info@bancosta.co.uk info@bancosta-monaco.com info@bancosta.ch mena@bancosta.com bancosta oriente bancosta oriente bancosta oriente japan rep.office singapore hong kong beijing tokyo phone: phone: phone: phone: sap@bancosta.com.hk sap@bancosta.com.hk capespmx@bancosta.it bancosta.tokyo@spa.nifty.com web site: linkedin: linkedin.com/company/banchero-costa twitter: twitter.com/banchero_costa In addition to regular market reports, research recognize the need for bespoke reports & analysis, tailored to specific client needs. Reports can be produced on a wide range of shipping markets including dry bulk, tankers, gas & containers. In addition in-depth reports can be produced on specific commodity markets. To discuss individual requirements please contact: Phone: research@bancosta.com Legal notice: The information and data contained in this presentation is derived from a variety of sources, own and third party s, public and private, and is provided for information purposes only. Whilst has used reasonable efforts to include accurate and up-to-date information in this presentation, makes no warranties or representations as to the accuracy of any information contained herein or accuracy or reasonableness of conclusions drawn there from. Although some forward-looking statements are made in the report, cannot in any way guarantee their accuracy or reasonableness. assumes no liabilities or responsibility for any errors or omissions in the content of this report.