Precious Shipping Public Company Limited SET Opportunity Day Date 14 th August 2019 Meeting Room 603, Building B, SET Building
Industry Overview Shipping Commercial Crafts Dry Trades Passenger Tanker Trades Multi Car Cement Dry Cargo Containers Cruise Chemical Purpose Carriers Carriers Handysize Ferries Gas 10-39,999 DWT PSL Supra/Ultramax Clean 40-69,999 DWT Crude Panamax 70-89,999 DWT Capesize 90,000+ DWT Precious Shipping PCL 2
Changes in the Baltic Dry Index (as of 31 July 2019) 12000 BDI (Cape, Panamax, Supramax and Handy*) 20 th May 2008 All time High 11,793 10 th February 2016 10000 All time Low 290 13 th November 2007 Previous Highs 11,039 6 th December 2004 6,208 8000 3 rd June 2009 4,291 3 rd February 2012 Previous Lows 647 6000 554 July 1986 16 th December 2015 471 31 st July 2019 4000 Latest 1,868 12 th June 2008 Largest daily fall 963 2000 0 Dec 85 Dec 86 Dec 87 Dec 88 Dec 89 Dec 90 Dec 91 Dec 92 Dec 93 Dec 94 Dec 95 Dec 96 Dec 97 Dec 98 Dec 99 Dec 00 Dec 01 Dec 02 Dec 03 Dec 04 Dec 05 Dec 06 Dec 07 Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Dec 16 Dec 17 Dec 18 Dec 19 *Handy was removed 1 March 2018 BDI Precious Shipping PCL 3
Changes in annual Baltic Dry Index (average figures) 8000 7,065 7000 6,390 6000 Second lowest ever Third lowest BDI Lowest average 5000 BDI in history 4,510 in history BDI in history 4000 3,371 3,180 2,6172,758 3000 2,617 1,870 2000 1,549 1,1451,353 1,2061,105 1,0181,137 798 995 906 715 920 1000 719 673 0 1985 1987 2003 2005 2007 2009 2011 2013 2015 2017 Q1'19 Q3'19 Index Value Upto 31 Jul 19 Precious Shipping PCL 4
Evolution of the Baltic Dry Index since 2016 2,500 2,000 1,500 1,000 500 0 Jan 16 Feb 16 Mar 16 Apr 16 May 16 Jun 16 Jul 16 Aug 16 Sep 16 Oct 16 Nov 16 Dec 16 Jan 17 Feb 17 Mar 17 Apr 17 May 17 Jun 17 Jul 17 Aug 17 Sep 17 Oct 17 Nov 17 Dec 17 Jan 18 Feb 18 Mar 18 Apr 18 May 18 Jun 18 Jul 18 Aug 18 Sep 18 Oct 18 Nov 18 Dec 18 Jan 19 Feb 19 Mar 19 Apr 19 May 19 Jun 19 Jul 19 Baltic Exchange Dry Index Upto 31 Jul 19 Precious Shipping PCL 5
Baltic Dry Index versus Ships scrapped from 2016 to 31 July 2019 30 2,100 50% lower than 25 the lowest 1,750 average BDI in history 20 1,400 mDWT BDI 15 1,050 10 700 5 350 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 Q4-18 2018 Q1-19 Q2-19 Q3-19 Scrap DWT Avg BDI Q3 -19 shows data upto 31 Jul 19 Precious Shipping PCL 6
Is China’s import growth sustainable? Latest available Data points on China for 2018 & up to July 2019 (annualized): Iron Ore imports for 2018 down 1.1% to 1,063.9 MMT. Up to Jul’19 was 591.4 MMT (1,013.8 MMT). Coal imports for 2018 up 3.2% to 280.8 MMT. Up to Jul’19 was 186.1 MMT (319.0 MMT). Steel production for 2018 up 9.8% to 927.5 MMT. Up to Jun’19 was 491.5 MMT (983.0 MMT). Monthly average Steel inventory in 2018 was 11.0 MMT and for 2019 till Jul, it is 13.4 MMT. Steel exports for 2018 down 7.9% to 69.6 MMT. Up to Jun’19 was 33.4 MMT (66.8 MMT). China consumed more Steel in 2018 up by 11.3% to 871.0 MMT than last year likely due to development of One Belt, One Road project. Up to Jun’19 was 464.0 MMT (928.0 MMT). Precious Shipping PCL 7
Chinese Iron Ore and Coal imports 120 7M’2018: 620.2 MMT, 7M’2019: 591.4 MMT %CHANGE: - 4.6 Y-O-Y 110 100.3 100 94.1 93.1 91.3 90.9 90.0 89.3 88.4 86.7 86.4 86.3 90 85.8 84.3 83.8 83.2 83.1 82.5 80.8 80 75.2 70 60 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Iron Ore Import (MMT) - 2018 Iron Ore Import (MMT) - 2019 50 7M’2018: 174.5 MMT, 7M’2019: 186.1 MMT %CHANGE: +6.6 Y-O-Y 40 33.5 32.5 29.0 28.8 27.8 27.1 26.7 26.6 30 25.5 25.3 25.1 23.5 23.0 22.3 22.3 20.9 19.2 17.6 20 10.2 10 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Coal Import (MMT) - 2018 Coal Import (MMT) - 2019 Precious Shipping PCL 8
Chinese Soybean imports 12 7M’2018: 52.9 MMT, 7M’2019: 46.9 MMT %CHANGE: - 11.3 Y-O-Y 9.7 10 9.1 8.7 8.6 8.5 8.0 8.0 7.6 8 7.4 7.4 6.9 6.9 6.5 5.7 5.7 6 5.4 5.4 4.9 4.5 4 2 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Soybeans imports (MMT) - 2018 Soybeans imports (MMT) - 2019 Precious Shipping PCL 9
Chinese Steel Production 100 6M’2018: 448.8 MMT, 6M’2019: 491.5 MMT %CHANGE: + 9.5 Y-O-Y 89.1 90 87.5 85.0 82.6 81.2 81.1 80.9 80.3 80.2 80.3 78.6 80 77.6 76.7 76.1 74.0 71.9 71.0 70 64.9 60 50 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec China Steel Production (MMT) - 2018 China Steel Production (MMT) - 2019 Precious Shipping PCL 10
Chinese Steel Inventory and Exports 7M’2018: 12.2 MMT, 7M’2019: 13.4 MMT 25 %CHANGE: + 9.8 Y-O-Y 18.8 20 17.9 15.2 14.1 13.0 15 12.8 12.9 11.7 11.3 11.3 11.1 10.3 10.0 10.0 9.9 9.9 9.1 8.3 8.1 10 5 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec China Steel Inventory (MMT) - 2018 China Steel Inventory (MMT) - 2019 6M’2018: 35.6 MMT, 6M’2019: 33.4 MMT 9 %CHANGE: - 6.2 Y-O-Y 8 6.9 6.9 7 6.5 6.3 6.3 6.2 6.0 5.9 5.9 5.7 5.7 6 5.6 5.5 5.3 4.9 4.7 5 4.5 4.3 4 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec China Steel Exports (MMT) - 2018 China Steel Exports (MMT) - 2019 Precious Shipping PCL 11
China - facts 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 GDP Growth Rate 10.4% 9.2% 7.8% 7.7% 7.4% 6.9% 6.7% 6.9% 6.6% 6.2%^ Iron Ore Imports (m MT) 618 686 745 820 933 953 1,025 1,075 1,064 1,014* Coal Imports (m MT) 164 182 289 322 292 204 256 271 281 319* Steel Production (m MT) 626 684 709 775 813 801 807 845 928 983** Steel Exports (m MT) 43 49 56 62 95 112 109 76 70 67** ^ as of Q2’2019 * annualized based on figures of 7M’2019 ** annualized based on figures of 6M’2019 Precious Shipping PCL 12
Historical tonne-mile growth in seaborne trade for Dry bulk cargoes Year 2016 2017 2018 2019 (f) 2020 (f) Iron Ore 7,934.3 8,180.4 8,174.9 7,960.7 8,193.1 Coal (includes Lignite) 4,982.4 5,249.6 5,563.5 5,509.7 5,583.2 Grains (includes Soybeans) 3,204.6 3,422.2 3,323.9 3,409.7 3,501.2 Minor Bulk 11,097.1 11,632.1 12,207.0 12,723.4 13,326.5 % age increase over the previous year 10% 6.4% 5.6% 5.1% 5.0% 4.7% 4.2% 4.1% 5% 3.6% 3.0% 2.8% 2.6% 2.5% 2.5% 1.8% 1.3% 0.6% 0% -0.1% -1.0% -2.7% -3.0% -5% 2016 2017 2018 2019 (f) 2020 (f) Iron Ore Growth (%) Coal Growth (%) Grains Growth (%) Minor Bulk Growth (%) Source : Clarksons Precious Shipping PCL 13
Historical tonne-mile growth in seaborne trade for minor Dry bulk cargoes Year 2016 2017 2018 2019 (f) 2020 (f) Steel Products 1,801 1,761 1,855 1,899 1,936 Forest Products 2,435 2,488 2,536 2,582 2,632 Other Minor Bulk 6,883 7,417 7,889 8,332 8,787 Total Minor Bulk 11,119 11,665 12,281 12,813 13,355 Ships 10-69999DWT (MDWT) 284.45 292.94 299.69 308.14 314.73 % age increase over the previous year 10% 7% 6% 5% 5% 5% 5% 5% 5% 4% 4% 4% 3% 5% 2% 2% 3% 2% 3% 2% 2% 2% 2% 2% 2% 0% -2% -5% -10% -10% -15% 2016 2017 2018 2019 (f) 2020 (f) Steel Prod. Growth (%) Forest Prod. Growth (%) Other Minor Growth (%) Minor Bulk Growth (%) Growth rate on 10-69999DWT ships (%) Source : Clarksons Precious Shipping PCL 14
Cargoes carried by PSL Ships in year 2016 – 1H’2019 Bulk cargo in the aggregate amount of 12.3 MMT, 11.7 MMT, 12.7 MMT, 6.63 MMT was carried on PSL ships in 2016, 2017, 2018 and 1H’2019 respectively 3.0 2.5 2.0 1.5 MMT 1.0 0.5 0.0 Agri Prods Cement Coal Fertilizers Limestone Logs Ore/Conc. Other cargoes Petcoke Salt Scrap Steel 2016 2017 2018 2019 Precious Shipping PCL 15
Industry Overview Supply Side Analysis
Vessel Supply Dry Bulk Fleet as of 31 Jul 2019 Total DWT Av DWT Ship Type DWT Range (MT) Ships Av Age (yrs) % of DWT (m MT) (MT) Handysize 10,000 – 39,999 3,829 11.49 105.37 27,838 12.32% Supra/Ultramax 40,000 – 69,999 3,615 8.14 201.7 58,108 23.59% Panamax 70,000 – 89,999 2,265 9.56 179.24 79,135 20.96% Capesize 90,000+ 2,049 8.55 368.83 180,005 43.13% Total / Average 11,758 10.07 855.14 72,728 100% Changes in 2019 Ship Type DWT Range (MT) Ships No (%age) DWT m MT (%age) Handysize 10,000 – 39,999 +179 (+4.90%) +3.80 (+3.74%) Supra/Ultramax 40,000 – 69,999 +56 (+1.57%) +3.59 (+1.81%) Panamax 70,000 – 89,999 +74 (+3.38%) +6.08 (+3.51%) Capesize 90,000+ +18 (+0.89%) +5.21 (+1.43%) Total / Average +327 (+2.86%) +18.68 (+2.23%) Source: Clarksons Precious Shipping PCL 17
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