Spot D $/TONNE. Asia. Asia

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1 Bunker fuel ICIS quotes Bunker fuel in Asia and as follows: Region Assessment name Type Freq Units Also Pubs Code CFR Singapore prices of bunker 380CST fuel Asia oil CFR Singapore prices of bunker 180CST fuel Asia oil Asia CFR Singapore prices of MGO CFR Hong Kong prices of bunker 380CST fuel Asia oil, 180CST fuel oil, MGO CFR Hong Kong prices of bunker 380CST fuel Asia oil Asia CFR Hong Kong prices of bunker 180CST fuel oil Asia CFR South Korea prices of MGO Asia CFR Japan prices of bunker 380CST fuel oil Asia CFR Japan prices of bunker 180CST fuel oil Asia CFR Japan prices of MGO Asia CFR Taiwan prices of bunker 380CST fuel oil, 180CST fuel oil, MGO Asia CFR Taiwan prices of bunker 180CST fuel oil Asia CFR Taiwan prices of MGO Ex-wharf prices of bonded bunker 180CST fuel oil in South Ex-wharf prices of bonded bunker 180CST fuel oil in Yangtze River Delta Ex-wharf prices of bonded bunker 180CST fuel oil in Yangtze River Delta Ex-wharf prices of bonded bunker 180CST fuel oil in Bohai Bay Ex-wharf prices of bonded bunker 120CST fuel oil in South Ex-wharf prices of bonded bunker 120CST fuel oil in Yangtze River Delta Ex-wharf prices of bonded bunker 120CST fuel oil in lower reaches of Yangtze River Ex-wharf prices of bonded bunker 120CST fuel oil in Bohai Bay Ex-wharf prices of bonded zero pour point gasoil in South Ex-wharf prices of bonded zero pour point gasoil in Yangtze River Delta Ex-wharf prices of bonded zero pour point gasoil in lower reaches of Yangtze River Ex-wharf prices of bonded zero pour point gasoil in Bohai Bay 180CST fuel oil in South 180CST fuel oil in Yangtze River Delta 180CST fuel oil in lower reaches of Yangtze River and Bohai Bay 180CST fuel oil in Bohai Bay 1

2 120CST fuel oil in South 120CST fuel oil in Yangtze River Delta 120CST fuel oil in lower reaches of Yangtze River 120CST fuel oil in South Bohai Bay zero pour point gasoil in South zero pour point gasoil in Yangtze River Delta zero pour point gasoil in lower reaches of Yangtze River zero pour point gasoil in Bohai Bay Publications referenced above: 1. ICIS C1 Asia Bunker Market Weekly (in English) 2. ICIS C1 Bunker Market Weekly (in Chinese) 3. ICIS C1 assessments databank Methodology last updated: 20 July 2012 Recent changes to this methodology Date Assessment Code Change To comment on any aspect of this methodology, or to propose changes, please click here. ICIS continuously develops, reviews and revises its methodologies in consultation with industry participants. Product specifications and trading terms and conditions used aim to reflect typical working practices prevalent in the industry. General methodology ICIS publishes market prices based on information continuously gathered from market participants about: spot transactions, spot bid and offer levels, contract price negotiations, prices of related commodities, and relevant freight costs. ICIS includes in its price generation process only information gathered up to the published market close time for each commodity and assessed period. ICIS does not make retrospective adjustments or changes to price quotations based on information subsequently received. ICIS regards all arm s-length transactions which meet its specification criteria as carrying equal weight. ICIS uses proprietary models where necessary to normalize data to the typical specifications for cargo size and date ranges given for each commodity. Some ICIS assessments are the product of calculation alone, for example in markets where insufficient market activity takes place to permit price assessment, or where a market 2

3 habitually itself sets prices according to a formula. Such calculated assessments are noted as such in their detailed methodology specifications. ICIS endeavours to cross-check all the transaction information it gathers. ICIS will not use information for assessment purposes where such checks call into doubt the accuracy of the original information, or where a transaction appears to have occurred under circumstances that render it non-repeatable or otherwise markedly unusual. ICIS publishes a number of types of market quotation: Spot Range assessments Published daily and weekly, these delineate the typically tradable range for a full working day or week. The range is normally established using verified typical transactions and standardized atypical transactions. In the event that no relevant transactions have occurred in the assessed period, ICIS will establish a range using bids and offers for typical spec material; and using established market relationships resulting from manufacturing economics, product linkages, freight and forward markets. Weekly range assessments are marked in some ICIS reports with a + to distinguish them from spot close assessments (see below). In the bunker fuel report, on days with deals, the assessment will reflect deals alone. On days without deals, the assessment will reflect bids and offers alone and can use the correlation between the current month and the forward month. On days with only one deal, the assessment will reflect that deal as well as bids and offers. Instrument function: Provides overview of market activity over course of one day in the case of daily reports, or one week in the case of weekly reports. Width of range offers insight into current levels of market volatility. Variable range width means assessment trades off accuracy for inclusivity, and transparency is reduced vis-a-vis spot close assessment. Suitable for inclusion in averaging mechanisms and market analysis tools Spot Close assessments Published daily and weekly, these reflect the transactable market value of the assessed product at the close of business for the assessed period (daily or weekly). Assessments are nevertheless shown as a low-high range, indicating the space in which a transaction is deemed to have been possible at the specified time. This low-high is typically tighter than that shown in a Spot Range assessment. The assessment is established taking into account: typical, repeatable transactions at arm s length between non-affiliated market participants; standardized atypical transactions, where it is possible to derive a typical equivalent market value for a transaction which does not conform to standard specifications; bids and offers for typical spec material; movements in related markets. In the absence of reliable, confirmable market information for a specific commodity, ICIS reserves the right to compute changes in specific assessments based on established relationships derived from manufacturing economics, product linkages, freight, and forward markets. Weekly Spot Close assessments are marked in some ICIS reports with a * to distinguish them from Spot Range assessments (see above). 3

4 Instrument function: Reflects most recent tradable market value with high transparency and high accuracy. Suitable for inclusion in averaging mechanisms and market analysis tools. Indexes In some markets, ICIS publishes volume-weighted averages known as indexes or indices of verified typical transactions over specified periods, either daily or weekly. Inputs to an index are checked editorially for conformity to specification and statistical outliers are eliminated. See individual methodologies for details. Instrument function: An index is a mathematically derived indicator of typical traded value over a given period. Because it is an average, it should be noted that an index does not provide a currently transactable price indication it is inevitably historical in nature; and both accuracy and volatility may vary with quantity of inputs. Suitable for long-term market analysis. Contract Reference prices These are publicly announced, often single number, reference contract prices, agreed in multilateral negotiations and used as a base price for contractual sales of material by producers, typically between major producers and large end-users. ICIS publishes Contract Reference prices once confirmation is obtained of at least two agreements between recognised contract partners of significant size. Note that the date of publication can vary for each contract period depending on the speed of industry negotiations. Instrument function: Contract reference prices are used in some markets as the basis for monthly or quarterly contracts and form the basis further negotiations between producers and buyers on volume-related discounts. Contract price assessments Published weekly, these reflect the achievable base price for contractual sales of material by producers, either to onward distributors or direct to end-users. Prices, typically valid either for one month or for three, are arrived at by negotiation between producers and buyers, and are updated by ICIS once confirmation is obtained of agreement between major producers and typical buyers of the size indicated in individual specifications. Note that most contract prices are agreed as a base from which discounts are given to individual buyers, and that the size of these discounts typically varies based on the volume purchased over the contract period by the buyer. In the event that market participants fail or decline to confirm outright contract price levels to ICIS, ICIS reserves the right to make its assessments of achievable contract prices based on established market relationships derived from manufacturing economics, product linkages, freight, and forward markets. Instrument function: Provides view of baseline for currently prevailing contract mechanisms, where these are statically determined that is, bilaterally negotiated contracts not based on automated averaging of spot market prices. Distribution indicators Published weekly for some markets, these reflect contract prices net of known discounts to typical-sized product distributors. See individual methodology statements for details. 4

5 Instrument function: Provides additional insight into typical prices paid by buyers in statically determined (ie bilaterally negotiated contracts not based on averaged spot market prices). Margins Published in ICIS Margin Reports, margin prices reflect computed differentials between different products related through the processing chain. Instrument function: Provides insight into supply chain economics and industry profitability. Theoretically determines scope of pricing further along processing chain. Note that market behaviour sometimes violates apparent margin economics. Suitable for in-depth market and industry analysis. Assessment Window Asia and daily spot assessments are based on information gathered throughout working day to close of business every day (1730 hours Beijing time), reflecting the most likely traded prices during the day. Assessed Periods For Asia, ICIS C1 takes into consideration spot cargoes for lifting in Singapore, Hong Kong, South Korea, Japan and Taiwan between 3-7 days forward from publication date. bonded spot assessments are for spot cargoes delivered 7 days forward from publication date. internal-trade spot assessments are for spot cargoes delivered between 1-5 days forward from publication date. Product quality Bunker fuel, which is the fuel for ships, consists of bunker fuel oil and bunker gasoil. ICIS C1 provides assessments for internal-trade bunker fuel in, bonded bunker fuel in and bunker fuel in Asia s Singapore, Hong Kong, Japan, South Korea and Taiwan. Internal-trade bunker fuel is supplied to ships plying domestic ports, including bunker fuel oil and bunker gasoil. Bonded bunker fuel is used to refuel ships destined for overseas ports under the surveillance of the customs, as ships with domestic ports as destinations could only refuel after-tax bunker fuel. Bonded bunker fuel is regarded as exports. Specifications for bunker fuel oil: Note that bonded bunker fuel oil and Asia bunker fuel oil are both in accordance to ISO 8217:2005 Item Unit Density kg/m³ internal-trade bunker fuel(gb/t) bonded bunker fuel and international bunker fuel(rme) 180CST 120CST 180CST 380CST (20 C) 982 (20 C) 991 (15 C) 991 (15 C) Kinematic viscosity mm²/s

6 (50,CST) Water % V/V 0.5 Carbon residue % m/m Sulphur % m/m Ash % m/m Vanadium mg/kg Flash Point C 60 Pour Point C 30 Aluminium + Silicon mg/kg 80 Total potential sediment % m/m 0.1 Zinc mg/kg 15 Phosphorus mg/kg 15 Calcium mg/kg 30 Specifications for bunker gasoil: Item Unit internal-trade bunker fuel(gb/t) Zero Pour Point Gasoil Density (15 ) kg/m³ bonded bunker fuel and international bunker fuel (RME) DMA(MGO) Kinematic viscosity Kinematic viscosity Carbon residue by 10% distillation mm²/s 3(20 C) 1.5(40 C) mm²/s 8(20 C) 6(40 C) % (m/m) Pour Point (Summer) Pour Point (Winter) C Water % V/V - Sulphur % (m/m) Ash % m/m Vanadium mg/kg - 6

7 Aluminium + Silicon mg/kg - Flash Point C Cetane Number Distillation Range:50% evaporation temperature 90% evaporation temperature 95% evaporation temperature Total potential sediment C C C % m/m - Credit terms Typical credit terms of internal trades are LC 0-30 days. Typical credit terms of bonded trades for LC days. Typical credit terms of trades in Asia are for LC 30 days. Standard spot cargo size In the Asia market, CFR Singapore assessments are typically 500-1,500 tonnes for bunker 380CST fuel oil, 300-1,000 tonnes for bunker 180CST fuel oil and tonnes for MGO CFR Hong Kong assessments are typically 500-1,000 tonnes for bunker 380CST fuel oil, tonnes for bunker 180CST fuel oil and tonnes for MGO CFR South Korea assessments are typically tonnes for bunker 380CST fuel oil, tonnes for bunker 180CST fuel oil and tonnes for MGO CFR Japan assessments are typically 300-1,500 tonnes for bunker 380CST fuel oil, tonnes for bunker 180CST fuel oil and tonnes for MGO CFR Taiwan assessments are typically tonnes for bunker 380CST fuel oil, tonnes for bunker 180CST fuel oil and tonnes for MGO In bonded market, assessments are typically tonnes for bunker 380CST fuel oil, tonnes for bunker 180CST fuel oil and tonnes for MGO In internal-trade market, assessments are typically tonnes for bunker 180CST fuel oil, tonnes for bunker 120CST fuel oil and tonnes for zero pour point gasoil Contract Reference prices N/A Assessment basis Asia market: 7

8 Singapore ex-wharf prices for cargoes delivered mainly in Singapore ports. Hong Kong ex-wharf prices for cargoes delivered mainly in ports at Hong Kong. South Korea ex-wharf prices for cargoes delivered mainly in Pusan port, etc. Japan ex-wharf prices for cargoes delivered mainly in Tokyo Bay port, etc. Taiwan ex-wharf prices for cargoes delivered mainly in Kaohsiung, Taichung, Keelung, Hualien, Suao ports, etc. internal-trade and bonded markets: Pearl River Delta ex-wharf prices for cargoes delivered mainly in Guangzhou and Xiamen, etc. Yangtze River Delta ex-wharf prices for cargoes delivered mainly in Shanghai, Ningbo and Zhoushan, etc. Lower reaches of Yangtze River ex-wharf prices for cargoes delivered mainly in Nantong, Nanjing, Jiangyin and Zhangjiagang, etc. Bohai Bay ex-wharf prices for cargoes delivered mainly in Dalian, Tianjin, Qinhuangdao and Qingdao, etc. Taxes Tax Code Product Import tax rate for 2012 Export tax rate Light gasoil (excluding biogasoil) 0% 0% No. 5-7 fuel oil 1% 0% Wax oil 0% 0% Heavy gasoil 6% 0% Other gasoils and fuel oils 6% 0% Exchange rate ICIS C1 adopts the exchange rate released by the People s Bank of on 10:00 (Beijing time) on each working day. The exchange rate is a mean of offers/bids at a specified time on a specific day. The exchange rate provided by ICIS C1 is only for reference purposes, which may be different from the exchange rate released by local banks or other financial institutions. Editorial Group: Liu Chuanjun liuchuanjun@c1energy.com Liu Wenya liuwenya@c1energy.com Zhu Minhao zhuminhao@c1energy.com Chang Sichao changsichao@c1energy.com 8