SHIP DEMOLITION REPORT AND MARKET ANALYSIS

SHIP DEMOLITION REPORT AND MARKET ANALYSIS The surprise came last week from Bangladesh where the High Court of Justice ruled on March 18 th, 20 that all ship recycling yards not operating with environmental clearance should be closed within two weeks. As none of those yards operate under such requirement, this would have practically meant for all Chittagong-based yards to stop their activities. The court decision detailed several measures vessels (cleaning-up, safeguards measures ) should be complying with before entering Bangladesh for ultimate disposal. The consequences were immediate: the local banks stopped processing of Letters of credit, the Director General of Shipping refrained issuing the so-called no-objection certificate making any further imports of recycling ships not possible. The entire Bangladeshi ship recycling industry was frozen just as the prices were getting above the USD 350/- per Lightweight level. We now understand that the matter is in the process of being solved with a petition successfully filed against the decision of the High Court of Justice. However recent sales to Bangladeshi breakers at improved levels may come under pressure and may be re-negotiated by parties taking advantage of this situation. The Indian market continues to be depressed with the exchange rate of the Indian Rupee depreciating against the U.S. Dollar and the local steel market falling down. We estimate the price correction the Indian market sustained to be between USD 25/- and USD 30/- per long ton Lightweight. The about 150.000 tons of Lightweight to be delivered to Alang-based shipbreakers should not be supportive of any price recovery at very short term. Despite ongoing political problems, the Pakistani shipbreakers have been able to take advantage from the situation on both Indian and Bangladeshi markets in securing two further units for recycling. Since the beginning of 20, more than 250.000 tons of Lightweight have been beached in Gadani Beach corresponding to a market share of 13% of the vessels delivered to recycling yards. The Chinese market has further dropped this week with prices below USD 200/- per Lightweight for tankers and large bulkers. Prices related to green dismantling are about undergoing the USD 150/- per long ton Lightweight depending of the type and size of the concerned units. Despite the massive flow of vessels delivered to Chinese breakers for green dismantling, the market share of Chinese market remains below 10%. www.eckhardt-marine.com 1

INDIA SALES MSC TAMPA Container Ship 53325 dwt 1984 blt 18710 ldt USD 280 MSC EDNA Container Ship 38743 dwt 1970 blt 15463 ldt USD 285 MSC GIULIA Container Ship 21185 dwt 1970 blt 8670 ldt USD 290 COMMANDER General Cargo Ship 20544 dwt 1976 blt 6935 ldt USD 3 GLOBAL PROVIDER Passenger/ Vehicle Ferry 6670 dwt 1981 blt 5289 ldt USD 283 As is Fujairah ARCTICA General Cargo Ship 4990 dwt 1973 blt 2937 ldt USD 360 DUBAI DIAMOND Container Ship 8717 dwt 1988 blt 5782 ldt PNC TAO YUAN General Cargo Ship 292 dwt 1979 blt 8176 ldt USD 250 As is Taiwan YE LAN General Cargo Ship 29213 dwt 1979 blt 8172 ldt USD 260 As is Kaohsiung DUBAI TRADER Container Ship 8717 dwt 1987 blt 5376 ldt USD 280 RUBY RAY Vehicle Carrier 10555 dwt 1978 blt 9376 ldt PNC 11 vessels 94886 tons ldt sold www.eckhardt-marine.com 2

ALANG PORT POSITION ETA Arrived Beached MIKHAIL STENKO General Cargo Ship 8540 dwt 1975 blt 4470 ldt 24-03- -- -- CELJE General Cargo Ship 18430 dwt 1977 blt 6005 ldt 24-03- -- -- MSC GIULIA Container Ship 21185 dwt 1970 blt 8670 ldt 22-03- -- -- MSC EDNA Container Ship 38743 dwt 1970 blt 15463 ldt 22-03- -- -- VASILIY BELOKONENKO General Cargo Ship 8514 dwt 1974 blt 4470 ldt 22-03- -- -- RUBY RAY Vehicle Carrier 10555 dwt 1978 blt 9376 ldt -- 18-03- -- MSC TAMPA Container Ship 53325 dwt 1984 blt 19220 ldt -- 17-03- -- ELLISPONTOS Bulker 31255 dwt 1981 blt 7181 ldt -- 19-03- -- SVYATAYA YELIZAVETA Bulker 54612 dwt 1974 blt 12812 ldt 14-03- 15-03- -- A SHUJAA I General Cargo Ship 21894 dwt 1982 blt 8966 ldt 14-03- 19-03- -- ZARECHENSK Bulker 22868 dwt 1968 blt 7295 ldt 14-03- 16-03- -- VULTURNUS Bulker 27112 dwt 1978 blt 87 ldt 14-03- 14-03- -- CAP DOMINGO Container Ship 34680 dwt 1984 blt 4025 ldt 14-03- 17-03- -- DAFNIS General Cargo Ship 16728 dwt 1981 blt 6842 ldt 14-03- 16-03- -- HENA Bulker 38403 dwt 1977 blt 8516 ldt 07-02- 03-03- -- MIRA Bulker 32535 dwt 1980 blt 7338 ldt 16-02- 19-02- -- DARIA General Cargo Ship 22635 dwt 1979 blt 5242 ldt -- 26-02- -- TRADER Container 11060 dwt 1982 blt 5358 ldt -- 25-02- -- RANGE Roro 4216 dwt 1985 blt. 3469 ldt 08-03- 08-03- 14-03. GOLDEN SUN Bulker 22646 dwt 1977 blt 5701 ldt -- 10-03- 14-03- GOLDEN BRIDGE Container Ship 22014 dwt 1984 blt 7451 ldt -- 07-03- 16-03- 21 vessels 16621 ldt beached www.eckhardt-marine.com 3

BANGLADESH SALES DURI Bulker 138350 dwt 1986 blt 20026 ldt USD 335 YIN YUAN Bulker 23785 dwt 1972 blt 5646 ldt USD 290 SALAM PANJANG Container Ship 7727 dwt 1978 blt 3100 ldt PNC 3 vessels 28772 tons ldt sold www.eckhardt-marine.com 4

CHITTAGONG PORT POSITION ETA Arrived Beached GULF LION Tanker 29820 dwt 1981 blt 7271 ldt -- 20-03- -- PROCESS Tanker 28292 dwt 1984 blt 8450 ldt -- 18-03- -- LA FORGE LPG Carrier 45587 dwt 1981 blt 17111 ldt -- 16-03- -- BUANA Bulker 16617 dwt 1977 blt 4135 ldt -- 13-03- 17-03- SIDRATUL MUNTAHA Bulk Wood Chip Carrier 23625 dwt 1975 blt 6982 ldt -- 13-03- 15-03- 5 vessels 11117 tons ldt beached www.eckhardt-marine.com 5

PAKISTAN SALES ASMAA Tanker 16266 dwt 1983 blt 4190 ldt PNC ASTIR Bulker 30310 dwt 1977 blt 7189 ldt PNC 2 vessels 11.379 tons ldt sold GADANI PORT POSITION ETA Arrived Beached SIBI Dry Cargo Ship 3010 dwt 1981 blt 6733 ldt -- 24-02- 15-03- SUTHATHIP NAREE Bulker 25404 dwt 1983 blt 6935 ldt -- 17-03- 19-03- 2 vessels 13.668 tons ldt beached www.eckhardt-marine.com 6

CHINA SALES YANTALLES General Cargos Ship 3930 dwt 1968 blt 1959 ldt USD 200 LA PALOMA Bulker 149571 dwt 1990 blt 20329 ldt USD 205 Main engine damaged KAVALEROVO General Cargo Ship 3860 dwt 1970 blt 2210 ldt USD 210 3 vessels 24.498 tons ldt sold PORT POSITION NO NEW VESSELS REPORTED ETA Arrived Beached www.eckhardt-marine.com 7

MARKET PRICES EVALUATION DRY TONNAGE WET TONNAGE TREND INDIA USD 270 USD 280 BANGLADESH USD 285 (last week) USD 350 (last week) Difficult to assess a current price level due to possible consequences of court order. PAKISTAN USD 270 USD 280 CHINA USD 150 USD 185 TURKEY USD 140 USD 145 The above price guidances are based on a standard / average ship type of about 10,000 ldt, with fairly prompt delivery. The trend reflects Eckhardt Marine s perception of the possible market development on a short term basis. www.eckhardt-marine.com 8

700 600 500 400 300 200 100 0 $/ldt BDA for Bulk Carrier (Figure 1) 1-05 2-05 3-05 4-05 5-05 6-05 7-05 8-05 9-05 10-05 11-05 12-05 1-06 2-06 3-06 4-06 5-06 6-06 7-06 8-06 9-06 10-06 11-06 12-06 1-07 2-07 3-07 4-07 5-07 6-07 7-07 8-07 9-07 10-07 11-07 12-07 1-08 2-08 3-08 4-08 5-08 6-08 7-08 8-08 9-08 10-08 11-08 12-08 1-2- 3-4- 5-6- Index 12000 11000 10000 9000 8000 7000 6000 5000 4000 3000 2000 1000 0 BDA Bulk Carrier Subcontinent BDA Bulk Carrier China BDI Figure 1: Illustrating the evolution of the Baltic Exchange Demolition Assessment (BDA) for bulk carrier in contrast to the Baltic Dry Index. The assessment of the BDA is based on a bulk carrier (7,000 12,000 long tons light weight), gas free for man entry, delivery basis as is, under own power, cash price, basis standard commission. Delivery China and Subcontinent respectively on a 15/30 days basis. Figures provided by The Baltic Exchange Ltd. www.eckhardt-marine.com 9

$/ldt 5000 4500 4000 3500 3000 2500 2000 1500 1000 500 0 BDA for Bulk Carrier vs. Secondhand Sales (Figure 2) 1-05 2-05 3-05 4-05 5-05 6-05 7-05 8-05 9-05 10-05 11-05 12-05 1-06 2-06 3-06 4-06 5-06 6-06 7-06 8-06 9-06 10-06 11-06 12-06 1-07 2-07 3-07 4-07 5-07 6-07 7-07 8-07 9-07 10-07 11-07 12-07 1-08 2-08 3-08 4-08 5-08 6-08 7-08 8-08 9-08 10-08 11-08 12-08 1-2- 3-4- 5-6- Index 12000 11000 10000 9000 8000 7000 6000 5000 4000 3000 2000 1000 0 Bulker: Secondhand Sales BDA Bulk Carrier Subcontinent BDA Bulk Carrier China BDI Figure 2: Illustrating the evolution of the Baltic Exchange Demolition Assessment (BDA) in contrast to the Baltic Dry Index and selected secondhand sales. The secondhand sales bars reflect the price per long ton light weight paid for a bulk carrier (7,000 12,000 long tons light weight), aged between 20 and 23 years. Figures provided by The Baltic Exchange Ltd. www.eckhardt-marine.com 10

$/ldt 1000 900 800 700 600 500 400 300 200 100 BDA for Tanker (Figure 3) 1-05 2-05 3-05 4-05 5-05 6-05 7-05 8-05 9-05 10-05 11-05 12-05 1-06 2-06 3-06 4-06 5-06 6-06 7-06 8-06 9-06 10-06 11-06 12-06 1-07 2-07 3-07 4-07 5-07 6-07 7-07 8-07 9-07 10-07 11-07 12-07 1-08 2-08 3-08 4-08 5-08 6-08 7-08 8-08 9-08 10-08 11-08 12-08 1-2- 3-4- 5-6- Index 2500 2300 2100 1900 1700 1500 1300 1100 900 700 500 300 100 BDA Dirty Tanker Subcontinent BDA Clean Tanker Subcontinent BDA Dirty Tanker China BDA Clean Tanker China BDTI BCTI Figure 3: Illustrating the evolution of the Baltic Exchange Demolition Assessment (BDA) for tanker in contrast to the Baltic Dirty Tanker Index (BDTI) and the Baltic Clean Tanker Index (BCTI). The routes are based either on a dirty tanker (15,000 25,000 long tons light weight) or product tanker (6,000-10,000 long tons light weight), gas free for man entry, delivery basis as is, under own power, cash price, basis standard commission. Delivery China and Subcontinent respectively on a 15/30 days basis. Figures provided by The Baltic Exchange Ltd. www.eckhardt-marine.com 11

BDA for Tanker vs. Secondhand Sales (Figure 4) 1900 1700 1500 1300 1100 900 700 500 300 100 $/ldt Index 2500 2300 2100 1900 1700 1500 1300 1100 900 700 500 300 100 1-05 2-05 3-05 4-05 5-05 6-05 7-05 8-05 9-05 10-05 11-05 12-05 1-06 2-06 3-06 4-06 5-06 6-06 7-06 8-06 9-06 10-06 11-06 12-06 1-07 2-07 3-07 4-07 5-07 6-07 7-07 8-07 9-07 10-07 11-07 12-07 1-08 2-08 3-08 4-08 5-08 6-08 7-08 8-08 9-08 10-08 11-08 12-08 1-2- 3-4- Tanker: Secondhand Sales BDA Dirty Tanker Subcontinent BDA Clean Tanker Subcontinent BDA Dirty Tanker China BDA Clean Tanker China BDTI BCTI Figure 4: Illustrating the evolution of the Baltic Exchange Demolition Assessment (BDA) for tanker in contrast to the Baltic Dirty Tanker Index (BDTI) and the Baltic Clean Tanker Index (BCTI) as well as selected secondhand sales. The secondhand sales bars reflect the price per long ton light weight paid for a dirty tanker (15,000 25,000 long tons light weight) or a product tanker (6,000 10,000 long tons light weight), aged between 20 and 23 years. Figures provided by The Baltic Exchange Ltd. www.eckhardt-marine.com 12

Volatility of the BDA index since initial quotation in 2005 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% -10% -20% -30% -40% -50% 01/05 03/05 05/05 07/05 /05 11/05 01/06 03/06 05/06 07/06 /06 11/06 01/07 03/07 05/07 07/07 /07 11/07 01/08 03/08 05/08 07/08 /08 11/08 01/ 03/ D/TKR_CHINA (04.01.05: $358) D/TKR_SUBCON (04.01.05: $440) B/C_CHINA (04.01.05: $330) B/C_SUBCON (04.01.05: $387) C/TK_CHINA (04.01.05: $351) C/TKR_SUBCON (04.01.05: $424) www.eckhardt-marine.com 13

Volatility 50% 40% 30% 20% 10% 0% -10% -20% -30% -40% Volatility of the BDA index (Bulk Carrier) based on the previous quotation BDA $800 $700 $600 $500 $400 $300 $200 $100-50% $0 01/05 03/05 05/05 07/05 /05 11/05 01/06 03/06 05/06 07/06 /06 11/06 01/07 03/07 05/07 07/07 /07 11/07 01/08 03/08 05/08 07/08 /08 11/08 01/ 03/ 05/ Volatility: B/C_CHINA BDA Bulk Carrier China Volatility: B/C_SUBCON BDA Bulk Carrier Subcontinent www.eckhardt-marine.com 14

Volatility 50% 40% 30% 20% 10% 0% -10% -20% -30% -40% Volatility of the BDA index (Bulk Carrier) based on the previous quotation BDA $800 $700 $600 $500 $400 $300 $200 $100-50% $0 01/05 03/05 05/05 07/05 /05 11/05 01/06 03/06 05/06 07/06 /06 11/06 01/07 03/07 05/07 07/07 /07 11/07 01/08 03/08 05/08 07/08 /08 11/08 01/ 03/ 05/ Volatility: D/TKR_CHINA BDA Dirty Tanker China Volatility: B/C CHINA Volatility: D/TKR_SUBCON BDA Dirty Tanker Subcontinent Volatility: B/C SUBCON www.eckhardt-marine.com 15

Volatility 50% 40% 30% 20% 10% 0% -10% -20% -30% -40% Volatility of the BDA index (Clean Tanker) based on the previous quotation BDA $800 $700 $600 $500 $400 $300 $200 $100-50% $0 01/05 03/05 05/05 07/05 /05 11/05 01/06 03/06 05/06 07/06 /06 11/06 01/07 03/07 05/07 07/07 /07 11/07 01/08 03/08 05/08 07/08 /08 11/08 01/ 03/ 05/ Volatility: C/TK_CHINA BDA Clean Tanker China Volatility: C/TKR_SUBCON BDA Clean Tanker Subcontinent www.eckhardt-marine.com 16

DEMOLITION STATISTICS FOR 20 number dwt ldt number dwt ldt TEU DRY BULK Average age: 30,51 CONTAINER SHIP Average age: 27,59 < 19,999 dwt 8 130.607 38.068 < 999 TEU 12 170.967 78.033 7.231 20,000 59,999 dwt 65 2.115.699 502.001 1,000 2,499 TEU 18 524.653 203.982 31,288 60,000 79,999 dwt 14 922.335 187.336 2,500 4,499 TEU 6 276.440 110.080 18,201 > 80,000 dwt 3 482.350 68.584 > 4,500 TEU 0 0 0 0 Total 90 3.650.991 795.989 Total 36 972.060 391.5 56.720 TANKER Average age: 27,31 REEFER Average age: 27,39 < 29,999 dwt 11 196.937 61.478 Total 4 42.038 22.990 30,000 44,999 dwt 6 229.830 74.119 45,000 59,999 dwt 4 199.053 56.958 GENERAL CARGO, MPP Average age: 31,81 60,000 74,999 dwt 2 128.372 28.714 Total 66 1.129.868 406.253 75,000 124,999 dwt 1 113.881 20.319 125,000 149,999 dwt 0 0 0 RORO Average age: 28,85 > 150,000 dwt 1 155.211 21.900 Total 18 190.404 129.424 Total 25 948.306 263.488 PASSENGER Average age: 41,18 COMBINATION Average age: 27,39 Total 3 19.289 34.341 Total 1 77.673 15.956 MISCELLANEOUS Average age: / Total 0 0 0 NUMBER DWT LDT TEU AVERAGE AGE GRAND TOTAL 243 7.105.607 2.037.564 56.720 28,50 These statistics include ships sold for demolition and effectively beached. Average age reflects the average age of the ship type at the date of sale for demolition. www.eckhardt-marine.com 17

ldt 500 000 Quantity of Lightweight beached in 20 number 60 450 000 400 000 51 50 350 000 300 000 250 000 34 40 30 200 000 21 19 20 150 000 17 15 13 14 100 000 10 8 50 000 5 2 0 0 0 Jan Feb Mrz Apr Mai Jun Jul Aug Sep Okt Nov Dez Bangladesh ldt India ldt Pakistan ldt China ldt Bangladesh Number India Number Pakistan Number China Number www.eckhardt-marine.com 18

Pakistan 253 899 13% Distribution of leightweight (20) China 161 866 9% Bangladesh 627 393 33% India 848 436 45% The information contained in this report has been obtained from various market sources. Eckhardt Marine GmbH believes such information to be factual and reliable without making guarantees regarding its accuracy or completeness. Eckhardt Marine GmbH will not be held responsible for any action or failure to take action upon reliance on information contained in this report. Whilst every care has been taken in the production of this review, no liability can be accepted for any loss incurred in any way whatsoever by any person who may seek to rely on the comments contained herein. www.eckhardt-marine.com 19