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WEEKLY
Published by Fearnresearch 13. July 2011

TANKERS
Crude An active week in all respects for the VLCCs and predominantly in the MEG where many had thought the monthly volumes would be lower than previous months. As we are about to finalize the July lifting program statistics actually show a month in line with the previous active months this year. Rates remain under pressure simply due to an oversupply of tonnage, though with a general feeling that we are at or close to the bottom. The daily returns are hence meager with limited upward potential in the near future. Rates for Suezmax improved the past week as the activity picked up resulting in a thinning position list for second decade. West Africa is still relatively active but some charterers managed to re-arrange their cargo windows while others was looking at space share on VLCCS in order to dampen the evident increase in rates. At the time of writing, the West Africa market has increased about 5 points while Black Sea and MED enjoyed an increase of about 10 points. The North Sea and Baltic Aframax markets saw slightly better numbers last week. This week we got off to a slow start and the build-up of available tonnage resulted in a negative correction in both segments. Despite a bullish start to the week, Med and Bsea rates remained unchanged as supply sill overcomes charterers demand. Product Fresh cargoes going Transatlantic have been few and far between this week. Initially it looked to firm up, but with scarce activity, no arbitrage open and FFA for next month sold down, rates are flat at ws150 for UKC/USAC basis 37kt. The LR1s trading Baltic/USAC are not much better, with flat rates at ws110 basis 60kt. Trading cross Cont is also stable, Handies across NWEurope fixing ws150 basis 30kt, with Flexis softer at ws185 basis 22kt. Elsewhere in the states, Caribs and USG activity is under continued pressure, with up coast voyages fixing at ws150 basis 38kt, backhaul voyages USG/ UKC-Med at ws90 level basis 38kt. Next week we expect to see a continued flat trend for clean tonnage in the West, as the MR position list looks sufficient to cover whatever requirements may come. East of Suez remains fairly flat and quiet, with LR1s trading MEG/JPN still fixing at WS 122.5 basis 55kt. For the LR2s trading on the same route, there is not much activity to be reported and fixtures are being concluded at WS 117.5 basis 75kt. The trend remains flat for both sizes. LR1s fixing Jet fuel MEG/UKC have softened to USD 1.95 million basis 65kt. MRs trading Spore/JPN are seeing rates around ws145 basis 30kt, whilst MRs trading MEG/JPN are still seeing rates around ws145 basis 35kt.

DRY BULK
Handy Buisness from USG to Cont/Med farily healty but nervous going forward.Overall the Atlantic activity is on the low side with a negative undertone as number of open positions seems to increase. Some shortage of tonnage in the South Atlantaic with the same trend as further north - rates are softening. Pacific market remains quiet. For Indo-India, supras in South China are getting close to 10k. Nickel-ore rounds are getting firm rates in low teens. Very quiet on iron ore front due to monsoons as WCI-China, rates slid to 10k and from ECI around 9k. Little Indian tonnage seen ballasting to Indonesia and RBCT. As a result, RBCT biz fixed on APS at around 20k. Red Sea, ferts on handymax/ supras are fixed at very mid 20s pmt on voy bss to WC India. Period deals done at 13k for large supras. Panamax Overall the market is suffering from low activity and a bearsih sentiment where Charterers are holding back to book. North Atlantic rates remain realtively flat above the mid teens with a fine balance between fresh requirements and open positions. In the South Atalntic the almost stable 25 + 500 level gradually seems to disappear as the area clearly is suffering from an increasing number of ballasters from the east. In the Pacific the trend from last week continues. Levels in the 9,000 area and fresh buisines mainly represented by some coal from Indonesiea to China. Otherwise low activity and volumes for more open positions in the Far East. With a slowly sliding FFA market and summer holidays in Europe coming, the forecast is not exactly thrilling. Capesize After a short period where owner seems to be deciding the direction and rates kept improving, the air suddenly was out of the balloon end last week. So far this week the big ones have not appeared in the market for West Australia/China, resulting in rates dropping from usd 8.65 to usd low 8s (based on sentiment and lack of fixtures). The front haul rates have however remained steady arnd usd 20.50 bss Tub/Gd, but expected to decrease as less West Australia fixtures resulting in more ballasters. Period marked is steady, with short period rates arnd usd 12,000 dly.

CHARTERING

CHARTERING

ACTIVITY LEVEL
Capesize Slower RATES CAPESIZE (usd/day, usd/tonne) TCT Cont/Far East (172 dwt) Tubarao / R.dam (Iron ore) Richards Bay/R.dam PANAMAX (usd/day, usd/tonne) Transatlantic RV TCT Cont / F. East TCT F. East / Cont TCT F. East RV Murmansk b.13-ARA 15/25,000 sc Murmansk b.13-L.pool 15/25,000 sc HANDYSIZE (usd/day) Atlantic RV Pacific RV TCT Cont / F. East 1 YEAR T/C (usd/day) Capesize Capesize Panamax Handysize Baltic Dry Index (BDI): Panamax Low Handysize Low This Week Last Week Low 2011 High 2011 24,000 10.75 10.40 27,000 11.40 10.70 16,000 7.25 8.50 30,000 11.40 10.80

ACTIVITY LEVEL
VLCC Stable Suezmax Active Aframax Slow P. E. of Suez Slow P. W. of Suez Slow RATES DIRTY (Spot WS) MEG / West MEG / Japan MEG / Singapore WAF / USG WAF / USAC Sidi Kerir / W Me N. Afr / Euromed UK / Cont Caribs / USG CLEAN (Spot WS) MEG / Japan MEG / Japan MEG / Japan Singapore / Japan Baltic T/A UKC-Med / States Caribs / USNH This Week Last Week Low 2011 High 2011 VLCC VLCC 260,000 260,000 130,000 135,000 80,000 80,000 70,000 37.5 49.0 49.0 50.0 72.5 75.0 92.5 100.0 92.5 38.0 49.0 49.0 50.0 67.5 67.5 95.0 105.0 92.5 30.0 46.0 46.0 50.0 57.5 57.5 70.0 80.0 80.0 47.5 80.0 80.0 80.0 112.5 140.0 192.5 150.0 195.0

15,750 22,000 4,750 9,000 9.20 10.40

15,500 23,000 5,000 9,500 9.20 10.40

10,500 19,600 3,400 7,400

20,600 27,500 7,100 17,250 10.25 11.35

75,000 55,000 30,000 30,000 60,000 37,000 38,000

122.5 117.5 145.0 145.0 110.0 150.0 150.0

122.5 117.5 145.0 145.0 110.0 147.5 155.0

97.5 110.0 120.0 120.0 110.0 130.0 115.0

132.5 150.0 198.0 160.0 160.0 242.5 210.0

16,550 9,250 19,900

16,500 9,400 19,750

11,000 4,000 19,750

23,000 18,000 33,000

150,000 dwt 170,000 dwt 75,000 dwt 53,000 dwt

1 YEAR T/C (usd/day) (theoretical) VLCC (modern) Suezmax (modern) Aframax (modern) LR2 105,000 LR1 80,000 MR 47,000 VLCCs fixed all areas last week: VLCCs avail. in MEG next 30 days:

10,000 10,000 9,500 18,500 12,500 12,000 10,750 21,000 13,000 12,800 12,750 17,500 12,000 12,250 12,000 17,000 This Week: 1383 Last week: 1443

23,000 19,500 15,000 17,000 15,000 13,250 48 84

23,500 20,000 15,000 17,250 15,500 13,250 previous week: last week:

23,000 19,500 15,000 17,000 15,000 12,750 37 100

29,500 25,000 18,000 18,750 15,750 13,500

SALE AND PURCHASE

Vessel Size Built Buyer Cape Providence 146,019 1987 Indonesian Jiangsu New Yangzijiang 93,000 2011 Greeks Resale Veenus 80,000 2011 Star Bulk Sher-E-Punjab Sea Of Harmony Toro Meridian Halo Beststar Judi Muhieddine Medousa Cocoa Heart 80,000 2011 76,397 73,000 56,070 29,365 28,360 15,794 8,555 2001 1995 2006 1987 1986 1981 1998 Undisclosed Undisclosed Greeks Canadian Bangladeshi Syrians Chinese Price Comm. 10.50 37.30 100.00 En bloc, incl. TC 7yrs @ 28/k/d En bloc, incl. TC 5+1+1yrs @ 29k/d 22.00 XS 17 26.60 Bss SS/DD due 5.50 5.80 2.60 7.00

SALE AND PURCHASE

Vessel Havelstern Alsterstern Size Built Buyer 17,080 1994 Undisclosed 17,080 1994 Undisclosed Price Comm. 6.70 En bloc 6.70

Fearnleys Weekly Report

13. July 2011

Published by Fearnresearch

GAS
Our predictions in our latest weekly were proven correct when both spot rates and the Baltic VLGC index were given a solid push up this week. The rates broke through the USD 50 per ton barrier for the first time in a couple of months, and some conditional optimism has returned. The highest confirmed fixture in the low USD 50s pmt basis RT/Chiba returns just over USD 23,000 per day on a modern full-size VLGC, a level not much below the highest so far in 2011. The spot market has improved rather fast on the back of quite a few fixtures, however, a couple of weeks ago it was obvious that fewer VLGCs than normal would be available for July spot loading. The independent owners in control of nearly all those vessels can hardly be blamed for taking advantage of this momentum - hence the spot market improved 10% last week. By the look of it there will hardly be any tonnage overhang from July into August, and as some early August freight inquiries are already floated, the owners will surf on this wave for a few weeks more.

NEWBUILDING
GENERAL COMMENT
Still some activity in the midst of the summer months. In addition the reoccurring container and LNG contracts, two separate Heavy Lift orders were confirmed this week. Both Jumbo Shipping and Hong Kong based, United Faith Group, placed orders in Croatia and China respectively.

CHARTERING

ACTIVITY LEVEL
Tankers Low Average Far Eastern Prices PRICES (mill usd) VLCC 300dwt Suezmax 150dwt Aframax 110dwt Product 47dwt Capesize 180dwt Panamax 76dwt Handymax 56dwt Dry Bulkers Low Others Active

ACTIVITY LEVEL
COASTER Moderate 15-23,000 cbm Moderate 82,000 cbm Active RATES This Week Last Week Low 2011 High 2011 SPOT MARKET (usd/month***) 82.000 cbm / FR 710,000 550,000 335,000 885,000 57.000 cbm / FR 615,000 615,000 590,000 615,000 35.600 cbm / FR 650,000 650,000 575,000 650,000 20.000 cbm / SR* 690,000 690,000 690,000 780,000 10.000 cbm ETH** 560,000 560,000 560,000 650,000 6.500 cbm / SR 575,000 575,000 530,000 585,000 COASTER Europe 380,000 400,000 320,000 450,000 COASTER Asia 235,000 235,000 220,000 250,000 * 20,000 cbm s/r reflects average spot market, LPG and Petchems (segment 15,000 / 23,000 cbm) ** 10,000 cbm eth reflects average spot market, Petchems and LPG (segment 8,200 / 12,500 cbm) *** Excl. waiting time, if any LNG SPOT MARKET (usd/day) East of Suez 138-145cbm West of Suez 138-145cbm 1 yr TC 138-145cbm LPG/FOB prices (usd/tonne) FOB North Sea / ANSI Saudi Arabia / CP MT Belvieu (US Gulf) Sonatrach : Bethioua This Week Last Week Low 2011 High 2011 88,000 90,000 92,000 88,000 90,000 92,000 59,000 62,500 69,500 Butane 816.00 855.00 850.51 848.00 88,000 90,000 92,000 ISO

This Week Last Week Low 2011 High 2011 102.0 102.0 102.0 102.0 65.0 65.0 65.0 65.0 55.0 55.0 55.0 55.0 36.0 36.0 36.0 36.0 54.0 54.0 54.0 55.0 36.0 36.0 35.5 36.0 31.0 31.0 31.0 31.0

NEWBUILDING CONTRACTS
Type Cont Cont MT LNG Heavy Lift Heavy Lift No Size 3 2000 teu 4 9600 teu 2 320000 dwt Yard Jinhai HI HHI Jinhai Heavy Owner Craig Enese Gulf Nav Gaslog Jumbo Shipping United Faith Group Del Mill$ Comm. 2013 2014 2013100 2014 2013 declared options 2013 2013 69,8

2 155000 cbm Samsung 1 2 14000 dwt Brodosplit 50000 dwt Yantai Raffles

MARKET BRIEF
Rate of exchange JPY/USD KRW/USD NOK/USD USD/EUR Interest rate Eurodollar 12 mnths EuroNOK 12 mnths Commodity prices Brent spot (USD) Bunker prices Singapore This Week Last Week Low 2011 High 2011 79.49 80.88 79.49 85.20 1060.84 1063.45 1058.57 1132.94 5.59 5.42 5.28 5.93 1.40 1.43 1.30 1.49 0.75 3.63 116.27 180 CST 380 CST Gasoil 180 CST 380 CST Diesel 678.00 668.00 971.00 674.00 648.00 979.00 0.74 3.74 112.96 663.00 653.00 936.00 651.00 628.00 934.00 0.73 3.09 92.46 520.00 510.00 782.00 515.00 495.00 770.00 0.80 3.74 124.48 695.00 680.00 1035.00 694.00 655.00 1031.00

Propane 807.00 815.00 793.22 820.00

947.93

SALE AND PURCHASE

Vessel Cbm Type No reportable sales this week Built Buyers Price Misc

Rotterdam

DEMOLITION
Vessels sold for demolition VLCC/VLOO Year to date 2011: 6 Year to date 2010: 10 2010 total: 10 SUEZMAX 0 5 6 CAPE/OBO 22 0 2

SOLD FOR DEMOLITION

Vessel name MV Hamburg Pearl MT Washington Voyager MV Atticos Cont King Honor Tween King Glory Tween King Favor Cont MSC Paola MV Captain Eglio Reef Cape Vincente Reef Nostalgic Reef Asiatic Reef Antigua Size Ldt Built Buyer 44,500 8,777 1982 Chinese 35,000 10,764 1976 USA 29,165 6,537 1976 Chinese 28,800 10,800 1978 Indian 22,211 7,693 1979 Indian 20,200 10,425 1984 Indian 19,974 9,820 1978 Indian 14,179 4,232 1974 Indian 6,817 4,235 1991 Indian 5,175 2,347 1986 Indian 4,988 2,288 1980 Indian 4,468 2,790 1991 Indian Price 457 260 463 510 510 510 526 487 485 485 485 485

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