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Multipurpose & Heavy-Lift Fleet Update BreakBulk Europe 2016

26th May 2016

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Agenda: No let-up: MPV/HL Fleet still under siege

• Vessel Supply ‒ Multipurpose vessels and project carriers

• Cargo Demand ‒ Dry cargo demand, General cargo demand and Project cargo

• Sector Competition ‒ Handy bulk carriers and Container vessels

• Market Outlook ‒ Challenges and conclusions

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Vessel Supply

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Vessel Supply

Source: Drewry’s Multipurpose Shipping Market Review and Forecast (www.drewry.co.uk/publishing)

MPV Fleet age profile (‘000 dwt)

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Vessel SupplyMPV Fleet age profile by vessel type (‘000 dwt)

Source: Drewry’s Multipurpose Shipping Market Review and Forecast (www.drewry.co.uk/publishing)

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Vessel Supply

Source: Drewry’s Multipurpose Shipping Market Review and Forecast (www.drewry.co.uk/publishing)

MPV orderbook / delivery schedule (no. of vessels)

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Vessel SupplyMPV & HeavyLift demolitions (‘000 dwt) Average age of demolitions (years)

Source: Drewry’s Multipurpose Shipping Market Review and Forecast (www.drewry.co.uk/publishing)

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Vessel SupplyFleet development to 2018 (‘000 dwt)

Source: Drewry’s Multipurpose Shipping Market Review and Forecast (www.drewry.co.uk/publishing)

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Vessel Supply

Source: Drewry’s Multipurpose Shipping Market Review and Forecast (www.drewry.co.uk/publishing)

Fleet development by vessel type to 2018 (‘000 dwt)

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Cargo Demand

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Cargo Demand

World economic growth (% change)

Crude oil price – Dubai ($/bbl)

World economic growth (% change)

Key Drivers

Source: Drewry’s Multipurpose Shipping Market Review and Forecast (www.drewry.co.uk/publishing)

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Cargo DemandDevelopment of dry cargo demand (million tonnes)

Source: Drewry’s Multipurpose Shipping Market Review and Forecast (www.drewry.co.uk/publishing)

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Cargo DemandDevelopment of General cargo demand (million tonnes)

Source: Drewry’s Multipurpose Shipping Market Review and Forecast (www.drewry.co.uk/publishing)

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Cargo DemandDevelopment of MPV market share (million tonnes)

Source: Drewry’s Multipurpose Shipping Market Review and Forecast (www.drewry.co.uk/publishing)

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Sector Competition

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Sector competitionDrewry all earnings index

Source: Drewry’s Multipurpose Shipping Market Review and Forecast (www.drewry.co.uk/publishing)

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Sector competitionWeighted East-West Container rates ($ per TEU) Estimated bulkcarrier time charter rates ($pd)

Source: Drewry’s Multipurpose Shipping Market Review and Forecast (www.drewry.co.uk/publishing)

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Sector competitionOne year timecharter rates ($pd)

Source: Drewry’s Multipurpose Shipping Market Review and Forecast (www.drewry.co.uk/publishing)

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Market Outlook

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Market outlookSupply vs Demand balance

Source: Drewry’s Multipurpose Shipping Market Review and Forecast (www.drewry.co.uk/publishing)

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Market outlookSupply vs Demand Index – Projected movement in rates

Source: Drewry’s Multipurpose Shipping Market Review and Forecast (www.drewry.co.uk/publishing)

Market Outlook

• Forecast for the MPV Fleet ‒ 2016 expected to be another difficult year ‒ 2017 unlikely to see significant increase before second half ‒ 2018 hoping to turn a corner

• Factors affecting the forecast ‒ Global trade growth weak throughout 2016, principally due to slowdown

from China but also low oil price and little investment. ‒ Competing sectors struggling with weak cargo demand, likely to encroach

further into MPV share of general cargo ‒ MPV sector disproportionally losing market share ‒ Total MPV fleet supply forecast growth at just 0.3%pa but the project

carrier segment is much stronger at almost 4%pa over the period

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