Argus European LPG Markets LPG Shipping - Current Challenges and Future Opportunities

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1 Argus European LPG Markets LPG Shipping - Current Challenges and Future Opportunities A presentation prepared by ViaMar AS, Oslo All information provided by ViaMar AS, whether oral or written, is ViaMar s present opinion, and it is subject to change without notice. Clients cannot rely solely on the information provided by ViaMar AS. ViaMar AS shall not be liable for any damages or for the breach of any warranty, expressed or implied, or for any other obligation or liability on account of the services rendered, w hether due to negligence or otherw ise

2 ViaMar AS - The independent shipping market analyst company Established 1996 in Oslo. Covers: The Tanker Shipping Markets The Dry Bulk Shipping Markets The Container Shipping Markets The Shipping Markets for LPG, Ammonia and the Petrochemical gases. Focus on two vital areas : Earnings and rates (transportation costs). Ship values new building and second hand. Serve a broad range of international clients; ship owners, cargo owners, traders, and financial institutions. Produce every quarter updated analysis of the forward outlook for the shipping markets. Build close client relationships based on frequent face-to-face meetings. Offer clients access to an experienced, fully equipped and up to date research staff with a proven track record. Visit

3 Shipping capacity; what to expect of fleet growth

4 World LPG Fleet Age Distribution and Orders VLGC

5 Expected Inflow of New Orders

6 Year Growth 1,9% 8,8% 11,1% 2,7% 0,9% 1,6% 4,7% 6,1% 4,3% 5,7%

7 World LPG Fleet Age Distribution and Orders Medium Size

8 Expected Inflow of New Orders

9 Year Growth 6,4% 3,6% -0,2% 1,2% 1,7% -0,3% 0,9% 2,7% 4,5% 5,1%

10 World LPG Fleet Age Distribution and Orders Small Size

11 Expected Inflow of New Orders

12 Year Growth 4,8% 7,1% 7,4% 5,7% 5,8% 4,9% 3,9% 4,3% 4,2% 4,4%

13 Demand growth; where will there be growth

14 LPG Outlook Supply growth from the Middle East stall Growth returns with new volumes ex UAE. Export growth from the US (shale gas and new terminal capacity), Africa and Europe (Russia ex. Baltic and ex. Black Sea). Asian refinery growth will produce more LPG. Demand drivers: Low priced LPG: attractive to the pet chemindustry Europe and Asia. PDH in China and Turkey. Residential demand in Asia, E-Med/N.Afr. and L.Am. Japans LPG consumption shifted to growth in 2013.

15 Seaborne LPG Supply Growth

16 LPG Demand Growth VLGC Segment Year Growth 3,3% -3,1% 2,6% 5,8% 0,0% 2,5% 2,5% 9,4% 12,2% 2,2% 4,8%

17 AmmoniaOutlook Severe US drought 2012 give rise to increased planting and fertilizer demand in the US in Attractively priced US natgas initiate investments in the US and Canada for new ammonia production capacity. Production problems in the ME sends BS cargoes east. Iranian export volumes affected by sanctions. SorfertAlgeria plant expected start up 2013 with 800kta capacity. Sharp dropin Euro Intratradein 2012 willcontinue.

18 Seaborne Demand Growth Medium Size Segment Total Year Growth 1,4 % 2,5 % -5,6 % -11,8 % 11,0 % 2,4 % 0,2 % 4,7 % 4,5 % 0,8 % 0,7 %

19 PetrochemicalGasesOutlook Middle East ethylene production growth eases off. Iranian export hindered by sanctions. New growth in 2014/15. Slow world economic growth affects manufacturing. Apparent demand growth in China stalls. US shale gas growth to spill into increased ethylene production volumes. Ethane shipments to start in Algeria and Mexico likely starting up new ethylene crackers. Ineosnew sea terminal in Antwerp likely to have impact. PDH units coming in China, Turkey and the US.

20 Seaborne Demand Growth Small Size Sector Annual growth Total Year Demand 11,6 % -1,5 % 5,5 % 8,4 % 6,4 % -0,6 % 5,4 % 9,4 % 7,7 % 3,0 %

21 Rates and earnings; what to expect

22 Year Supply Growth 1,9 % 8,8 % 11,1 % 2,7 % 0,9 % 1,6 % 4,7 % 6,1 % 4,3 % 5,7 % Demand Growth -4,2 % 2,6 % 4,7 % 1,0 % 1,4 % 2,5 % 9,4 % 12,2 % 2,2 % 4,8 % Inefficiencies 7,5 % 5,0 % 4,0 % 5,0 % 5,0 % 3,0 %

23 Earning Forecast Large Size(VLGC)

24 Supply 6,4 % 3,6 % -0,2 % 1,2 % 1,7 % -0,3 % 0,9 % 2,7 % 4,5 % 5,1 % Demand 2,5 % -5,6 % -11,8 % 11,0 % 2,4 % 0,2 % 4,7 % 4,5 % 0,8 % 0,7 % Ineffiencies 1,0 % 2,0 % 3,0 % 3,0 % 6,0 % 5,0 % 4,0 % 3,0 % 3,0 %

25 Earning Forecast Mid Size

26 Year Supply Growth 4,8 % 7,1 % 7,4 % 5,7 % 5,8 % 4,9 % 3,9 % 4,3 % 4,2 % 4,4 % Demand Growth 11,6 % -2,1 % 5,5 % 8,5 % 5,9 % -0,1 % 5,7 % 9,8 % 7,7 % 3,2 % Inefficiencies 2 % 2 % 4,0 % 3,0 % 3,0 % 3,0 % 3,0 %

27 Earning Forecast Small Size

28 Ship values; is it time to invest?

29 The ViaMar Asset Market Model Shipyard Capacity Orderbooks SHIPYARD CGT SUPPLY BALANCE UTILIZATION Steel price, lead time NEWBUILDING PRICE MARKET ANALYSIS SHIPYARD CGT DEMAND ORDERING ACTIVITY SECONDHAND PRICES Tankers Others Dry Bulk EARNINGS Container Gas Tankers

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32 Conclusions on Investments Gas SHV10 Time to Buy Time to do nothing Time to Sell VLGC 35k Gas 10-20k Gas 3,5k Gas

33 Thank you for your attention!