PRE PRECIOUS CIOUS SH SHIPPING IPPING PU PUBLIC BLIC COM COMPAN PANY Y LIMITED LIMITED (“PSL”) SET Opportunity Day, Website http://www.preciousshipping.com Meeting Room 603 E-Mail psl@preciousshipping.com Building B, SET Building, ir@preciousshipping.com 14 th Aug 2018 Precious Shipping PCL 1
Indus Industr try y Ov Over erview view Precious Shipping PCL 2
The Market The Market as as manifested manifested by by the the BDI BDI 12000 BDI (Cape, Panamax, Supramax and Handy) 20 th May 2008 All time High 11,793 10 th February 2016 All time Low 290 10000 13 th November 2007 Previous Highs 11,039 BDI 6 th December 2004 6,208 3 rd June 2009 4,291 3 rd February 2012 8000 Previous Lows 647 554 July 1986 16 th December 2015 471 8 th August 2018 Latest 1,704 6000 12 th June 2008 Largest daily fall 963 4000 2000 0 Precious Shipping PCL 3
The he Mar Market a et as s ma manif nifes ested ted by by cha hang nges es in in an annu nual al BDI BDI Lowest average BDI 8000 in history!! 7,065 6,390 7000 Fourth Second lowest Third lowest lowest BDI 6000 ever BDI in BDI in in history. history. 4,510 history. 5000 4000 3,371 3,180 2,617 2,758 2,617 3000 1,673 1,549 1,260 2000 1,145 1,175 906 715 1,018 1,137 920 1,206 1,105 719 673 1000 0 1985 1986 1987 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Q1'18 Q2'18 Q3'18* (*Upto 8Aug) Index Value Precious Shipping PCL 4
The The BDI BDI va values lues in in 2016 2016 – 8 8 Aug’ 18 18 Between the start of 2016, and to date, the trend line of the lows and the highs has been in the upward direction. The trend shows sustainability for the BDI. Precious Shipping PCL 5
Aver erage ge BD BDI v I ver ersu sus s Ships Ships sc scrappe pped d in in 2016 2016 – 8 8 Aug’ 18 18 35 1800 1,673 50% lower than 29.74 1600 the lowest 1,509 30 average BDI in history!! 1400 1,260 25 1,175 1,145 1,137 1200 1,006 994 20 mDWT 945 1000 BDI 15.16 14.22 736 800 15 673 612 600 10 8.52 360 400 4.99 3.76 4.15 5 3.66 3.24 200 2.36 1.71 1.06 0.64 0 0 Q1-16 Q2-16 Q3-16 Q4-16 2016 Q1-17 Q2-17 Q3-17 Q4-17 2017 Q1-18 Q2-18 Q3-18* (*Upto 8 Aug) Scrap DWT Avg BDI Precious Shipping PCL 6
Is China’s Import Growth Sustainable? Is China wants to stop producing ‘product’ or normal Steel and produce only high quality Steel. To do that you will need high grade iron ore and high grade coke, both mainly available from imports. China has slapped a ban on imports of Coal from North Korea. This was about 23 MMT during 2016 with very low ton-mile impact. This has added to the ton-mile demand growth. Pollution can only be reduced by using cleaner Iron Ore, Coal and Coke via imports. China shut 500 MMT of coal mining capacity over 2016 & 2017. China aims to cut outdated coal capacity by 150 MMT in 2018. If this target is met, China will have achieved 81% of the 800 MMT target by end of 2018 with the deadline being end 2020. China has withdrawn 1,000 licenses in the iron ore mining sector during 2017. China has ordered, between 15 November to 15 March the following year, a 50% cut in Steel production and 30% cut in Aluminum production in 14 provinces every year till 2021. Latest available Data points on China for 2017 & latest for 2018 (annualized): Iron Ore imports for 2017 up 4.9% to 1,075.3 MMT. Up to Jul’ 18 was 620.2 MMT (1,063.2 MMT). Coal imports for 2017 up 6.1% to 271.2 MMT. Up to Jul’ 18 was 174.5 MMT (299.1 MMT). Steel production for 2017 up 4.8% to 845.1 MMT. Up to Jun’ 18 was 448.8 MMT (897.6 MMT). Steel inventories for 2017 down 24.0% to 7.9 MMT. As of Jul’ 18 was 9.9 MMT. Steel exports for 2017 down 30.6% to 75.6 MMT. Up to Jul’ 18 was 41.4 MMT (71.0 MMT). China consumed more Steel in 2017, up by 9.6% to 782.7 MMT, than last year likely due to Belt and Road Initiative project. Up to Jun’ 18 was 419.9 MMT (719.8 MMT). Precious Shipping PCL 7
Chine Chinese se Ir Iron Ore on Ore and and Coal Coal imports imports 7 M’ 2017: 625.7 MMT, 7 M’ 2018: 620.2 MMT 7 M’ 2017: 152.8 MMT, 7 M’ 2018: 174.5 MMT %CHANGE: - 0.9 Y-O-Y %CHANGE: + 14.2 Y-O-Y Precious Shipping PCL 8
Chine Chinese se Soy Soybea bean n imports imports 7 M’ 2017: 54.9 MMT, 7 M’ 2018: 52.9 MMT %CHANGE: - 3.6 Y-O-Y Precious Shipping PCL 9
Chinese Chine se Steel Steel Produ Production, ction, Inven Inventory tory and and Expo Export rts FH’ 2017: 419.0 MMT, FH’ 2018: 448.8 MMT %CHANGE: + 7.1 Y-O-Y 7 M’ 2017: 48.0 MMT, 7 M’ 2018: 41.4 MMT 7 M’ 2017: 9.2 MMT, 7 M’ 2018: 9.9 MMT %CHANGE: - 13.8 Y-O-Y %CHANGE: + 7.6 Y-O-Y Precious Shipping PCL 10
China - facts China acts 2010 2011 2012 2013 2014 2015 2016 2017 2018 GDP Growth Rate 10.4% 9.2% 7.8% 7.7% 7.4% 6.9% 6.7% 6.9% 6.7%^ Iron Ore Imports (m MT) 618 686 745 820 933 953 1,025 1,075 1,063** Coal Imports (m MT) 164 182 289 322 292 204 256 271 299** Steel Production (m MT) 626 684 709 775 813 801 807 845 898* Steel Exports (m MT) 43 49 56 62 95 112 109 76 71* Steel Exports %age of 6.9% 7.2% 7.9% 8.0% 11.7% 14.0% 13.5% 9.0% 7.9%* Production ^ as of FH’ 2018 * annualized based on figures of FH’ 2018 ** annualized based on figures of 7 M’ 2018 Precious Shipping PCL Source: Various 11
Indus Industr try y Ov Over erview view - Sup Suppl ply y Side Side Ana Analys ysis is Precious Shipping PCL 12
Dr Dry y Bulk Bulk Fleet leet as as of of 1 st st Jul ul 2018 2018 Ship Type DWT Range (MT) Ships Av Age (yrs) Total DWT Av DWT % of DWT (m MT) (MT) 10,000 – 29,999 Handysize 1,848 14.43 38.43 20,794 4.65% 30,000 – 39,999 Handymax 1,759 7.55 61.83 35,153 7.48% 40,000 – 59,999 Super Handymax 2,682 10.22 142.87 53,269 17.29% 60,000 – 69,999 Ultramax 854 4.60 53.73 62,921 6.50% 70,000 – 89,999 Panamax 2,166 8.95 171.68 79,261 20.78% Capesize 90,000+ 2,015 7.94 357.78 177,556 43.30% Total / Average 11,324 9.42 826.32 72,703 100% Changes in 2018 Ship Type DWT Range (MT) Ships (No / %age) DWT (m MT / %age) 10,000 – 29,999 Handysize -11 (-0.59%) -0.18 (-0.41%) 30,000 – 39,999 Handymax +33 (+1.91%) +1.22 (+2.01%) 40,000 – 59,999 Super Handymax -3 (-0.11%) -0.08 (-0.06%) 60,000 – 69,999 Ultramax +47 (+5.82%) +2.96 (+5.83%) 70,000 – 89,999 Panamax +25 (+1.17%) +2.76 (+1.63%) Capesize 90,000+ +23 (+1.15%) +6.11 (+1.74%) Total / Average +114 (+1.02%) +12.79 (+1.57%) Source: Clarksons Precious Shipping PCL 13
Con Confi firmed med Or Order ders s as as of of FH FH 2018 2018 til till end l end 2021 2021 20.00 18.62 Total Confirmed Orders: 2018: 17.45 m DWT or +2.14% 18.00 2019: 32.66 m DWT or +4.01% 16.05 2020: 23.77 m DWT or +2.92% 16.00 2021: 5.13 m DWT or +0.63% Total until 2021: 79.01 m DWT or +9.71% {includes 62.97 m DWT or 14.00 79.70% Gearless ships (Panamax, Capesize and VLOCs)} Geared: 16.04 m DWT or 5.40% of existing Geared ships fleet 12.00 Gearless: 62.97 m DWT or 11.89% of existing Gearless ships fleet 10.00 8.80 8.46 8.00 6.00 4.28 3.63 4.00 3.36 2.88 2.70 2.53 2.13 1.46 2.00 1.02 0.54 0.63 0.40 0.36 0.31 0.16 0.07 0.19 0.18 0.25 0.00 0.00 Handysize Handymax Super Handymax Ultramax Panamax Capesize (Geared) (Gearless) (Geared) (Geared) (Gearless) (Geared) 2018 2019 2020 2021 Source: CRS - PSL Precious Shipping PCL 14
Bulk Bulk Car Carrier rier Con Contr tracting acting (mD (mDWT WT) 180 169.19 2015 included: 11.66 mDWT (65.0%) Gearless (Panamax, Capesize & VLOCs) 2016 included: 12.39 mDWT (93.7%) Gearless (Panamax, Capesize & VLOCs) 160 2017 included: 27.68 mDWT (85.6%) Gearless (Panamax, Capesize & VLOCs) As of FH-2018 includes: 10.29 mDWT (82.5%) Gearless (Panamax, Capesize & VLOCs) 140 120 104.12 104.12 104.46 100 80 59.51 57.32 60 42.23 38.52 40 32.32 30.56 24.41 17.93 20 12.48 13.23 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 FH-2018 Bulk Carrier Contracting (mDWT) Precious Shipping PCL Source: CRS - PSL 15
Dr Dry y Bulk Bulk Fleet leet - New Buildings New Buildings Pr Projec ojected ted vs Deli vs Deliver ered ed %age %age slippage in slippage in DWT DWT %age 38% 47.5% %age slippage in 120.00 slippage in DWT 46% DWT %age 35% 100.26 slippage 92.96 100.00 in DWT Estimated 85.40 33.7% %age slippage in 74.83 80.00 DWT 20% 57.72 60.00 50.17 48.25 48.42 48.35 38.28 34.43 40.00 31.15 18.17 20.00 0.00 2013 2014 2015 2016 2017 2018 Source : Clarksons Precious Shipping PCL 16
Ships Ships Delivered Delivered & Scrapped (Jan’ 17 17 - Jul’ 18 18) Scrapped in 7 M’ 17 = 10.02 mDWT Delivered in 7 M’ 17 = 29.89 mDWT Scrapped in 7 M’ 18 = 3.32 mDWT Delivered in 7 M’ 18 = 18.17 mDWT Change = - 11.72 mDWT (- 39.2%) Change = - 6.70 mDWT (- 66.9%) Precious Shipping PCL 17
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