Disclaimer: This presentation material is prepared for the use of Oldendorff Carriers and may not be redistributed, retransmitted or disclosed, in

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1 Oldendorff Carriers GmbH & Co. KG June 2015

2 Disclaimer: This presentation material is prepared for the use of Oldendorff Carriers and may not be redistributed, retransmitted or disclosed, in whole or in part, or in any form or manner, without the express written consent of Oldendorff Carriers. Any unauthorized use or disclosure is prohibited. Receipt and review of this research report constitutes your agreement not to redistribute, retransmit, or disclose to others the contents, opinions, conclusion, or information contained in this report without first obtaining expressed permission from an authorized officer of Oldendorff Carriers. Materials prepared by Oldendorff Carriers research personnel are based on public information. The information herein (other than disclosure information relating to Oldendorff and its affiliated was obtained from various sources and we do not guarantee its accuracy. All opinions, projections and estimated constitute the judgment of the author as of the date of the report and are subject to change without notice.

3 PRESENTATION AGENDA A FORWARD LOOK AT MAJOR ISSUES INTRODUCTION TO OLDENDORFF 2015 REVIEW MAJOR ISSUES IN DRY BULK SHIPPING FLEET OUTLOOK CONCLUSION

4 Oldendorff Group

5 Oldendorff Carriers Satellite Offices Oldendorff Carriers Project Offices Vancouver London New York Port of Spain New Amsterdam Headquarters Hamburg Iskenderun Dubai Abu Dhabi Tokyo Shanghai Mumbai Hong Kong Singapore Rio de Janeiro Santiago Cape Town Melbourne

6 Oldendorff Carriers Present Fleet* Unloaders Reloaders Capesize Size No Total DWT Capesize ,491,888 Handysize Panamax 112 8,933,962 Supramax 166 9,443,688 Panamax Handysize 65 2,235,960 Unloaders 7 477,513 Supramax Reloaders/Barges ,770 All Ships ,990,781 * Indication as of 15 May 2015

7 2015 REVIEW 7

8 Baltic Exchange Dry Bulk Indices* 2015 REVIEW 40,000 35,000 Baltic Exchange Indices from 2014 to 2015 $/day BCI TCA BPI TCA BSI TCA BHSI TCA 30,000 25,000 20,000 15,000 10,000 5,000 0 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Source: Baltic Exchange * Indication as of 14 May

9 2015 REVIEW Chinese Iron Ore Imports Grew by 2% YoY in Q1 2015, Slower than Q s Growth of 19% China Q1 Iron Ore and Concentrate Import growth increased 2.2% YoY , MillionTons Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: Bloomberg 9

10 China Imported 49 Mt of Coal in Q REVIEW China Q1 Coal Import growth dropped 42% YoY , MillionTons Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: National Bureau of Statistics 10

11 Slowdown in China s Minor Bulk Imports 2015 REVIEW 25 China monthly minor bulk imports Million tons, $/ton, Q1 Petcoke Nickel Ore Bauxite Scrap Potash Alumina Manganese Ore Copper Concentrates Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Source: China customs data, Oldendorff Research 11

12 MAJOR ISSUES 12

13 CHINA S ECONOMY IN TRANSITION Muted Growth in China for the 4 Major Drivers of Steel Demand Property CAGR : 6% F: 0% Construction CAGR : 6% F: 0% Machineries CAGR : 9% F: 0% Auto CAGR : 11% F: 1% Source: Oldendorff Research 13

14 Steel Exports May Swing The Direction Growth of China Steel Production % 8 2.8% % % % % CHINA S ECONOMY IN TRANSITION Steel Production Growth To Slow From CAGR 7.5% to -0.6% Over the Next Five Years Crude Steel Production = Apparent Steel Consumption + Net Exports, Mt, F 900 Net Steel Exports Apparent Consumption Crude Steel Production Growth - RHS % % -0.8% -0.5% -0.3% 16% 14% 12% 10% 8% 6% 4% 2% 0% -0.1% -2% F 2016F 2017F 2018F 2019F -4% Source: MPI, Oldendorff Research 14

15 GLOBAL IRON ORE OVERSUPPLY Pressure of Supply Overhang Likely to Continue to Weigh on Prices Planned Iron Ore Supply Exceeds Global Demand Indicates Lower Iron Ore Price Going Forward Global Iron Ore Market Projections, Mt, F 1800 Planned Iron Ore Supply Import Demand 1600 We estimate approx. 100Mtpa of seaborne iron ore needs to be curtailed or delayed in order to restore market balance over the next five years F 2016F 2017F 2018F 2019F Source: UNCTAD, Oldendorff Research 15

16 Cash Cost (CFR China), $/t Approximately 258 Mt of Non-Competitive Capacity Between Iron Ore Price of $50-70/t Global Iron Ore Mines Cash Cost, 62% Fe CFR China, $/t Brazil Australia India Liberia South Africa Sierra Leone Peru Congo Guinea Mauritania Russia Chile USA Canada Sweden Ukraine China GLOBAL IRON ORE OVERSUPPLY Majors from Australia & Brazil Remain Competitive at Current Price Theoretical Production Cuts Cash Cost Cumulative CFR China ($/t) Vol. Lost (Mt) Incremental Vol. Lost (Mt) > > > > > > closing price : $71.26/t Price as of 10/4/2015: $48.34/t Production, Mt Junior miners at risk or already out of the money Source: Various Sources, Oldendorff Research 16

17 Coal Consumption Will Continue to Increase Despite Share Reduction GREEN POLICY 6,000 China to Reduce Coal Share of Total Primary Energy Consumption to 62% by 2020 Total Energy Consumption, Mtce, f Non-Fossil Fuel Natural Gas Crude Oil Coal 5,000 4,000 3, % 14.3% 13.5% 12.8% 12.0% 11.3% 5.8% 6.4% 7.0% 7.6% 8.2% 8.8% 9.4% 10.0% 10.5% 9.8% 18.4% 17.6% 16.9% 16.1% 15.3% 14.5% 13.8% 13.0% 2,000 1, % 65.4% 64.9% 64.3% 63.7% 63.1% 62.6% 62.0% f 2015f 2016f 2017f 2018f 2019f 2020f Source: China s State Council, Oldendorff Research 17

18 ENERGY DEMAND Ambitious Targets Set for Power Capacity Additions 250 India to Increase Coal-Fired Capacity by 37% by end FY 2020 India Installed Coal-Fired Capacity, GW, FY 2010-FY 2020F 200 FY 2010 FY 2015 FY 2020F 60 GW GW GW Addition of 60 GW coal-fired capacity translates to about 210Mt of additional coal demand base on 75% on load factor 0 FY 2010 FY 2015 FY 2020F Source: CEA, Oldendorff Research 18

19 Indonesia Mineral Ore Export RESOURCE NATIONALISM Nickel Ore and Bauxite Exports Mt f Philippine Nickel Ore Exports Mt 2014 YoY Growth in Indonesia Mineral Export Volume +14Mt 2014 YoY Growth in Mineral Export from other sources Mineral Ore Exports from Others E 2015F 2016F Indonesia Mineral Ore Exports E 2015F 2016F Source: Various agents, Oldendorff Research F 2015F 2016F

20 COUNTERPARTY RISK 20 Baltic Exchange Forward Assessment* 12,000 11,000 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 Source: Baltic Exchange BFA Rates from 2015 to 2016 $/day Q1 (15) Q2 (15) Q3 (15) Q4 (15) Cal 15 Cal 16 Capesize 4,582 4,985 7,927 10,950 7,111 10,030 Panamax 4,815 5,048 5,233 6,379 5,369 6,433 Supramax 6,434 6,551 6,407 7,538 6,733 6,931 Handysize 5,339 5,326 5,438 5,944 5,512 6,050 * Indication as of 14 May 2015

21 Impacts of Record Orders in Million Newbuilding deliveries started strong in Jan 2015 followed by strong Q1 Historical Deliveries incl Conversions, Mdwt, YTD CAPE PMXPP SUPRA HANDY FLEET OVERSUPPLY Total Delivery in Q115 = MDWT Total Demolition in Q115 = 8.35 MDWT Jan 08 Jul 08 Jan 09 Jul 09 Jan 10 Jul 10 Jan 11 Jul 11 Jan 12 Jul 12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Source: Seaweb, Shipsales24 Source: Seaweb, Oldendorff Research 21

22 Dry Bulk Market to be Challenging Over 2015 KEY TAKEAWAY With a fleet growth of 3.5 percent in 2015 combined with about 3 4 percent increase in tonnage demand (in Mt), the market fundamentals point to challenging market throughout this year. Capesize will still set the dry bulk market tone. Fleet age profile dominated by younger vessels. 56 percent are younger than 5 years and 71 percent are younger than 10 years. New Building ordering activities to remain low in 2015 to 1H The focus of buyers will be resale from owner/shipyard. Counter party risk is an important factor in challenging market. 22

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