January 24th, 2020 GMS Weekly

1. ,l’ -+Ali / +N January 24th, 2020 Volume 209, Issue 914 Week 4 “Anything I come across that feels impossible, I probably need to take a second look.” - Joe Gebbia (Co-founder, AirBnb) Highlights: MARKET COMMENTARY SUDDEN SURGE! • Pressure on. • Buyer shortage. • Caution issued. • Supply increase. • 400/LDT risk. • Turkey tumbles. A sudden surge of tonnage pre-Chinese New Year holidays has started to put pressure on recycling markets once again, particularly as the already limited number of Recyclers of large LDT tonnage has started to get booked up. There is a shortage of capable and performing End Buyers, especially those whose banks will sanction large Dollar value L/Cs on the heavier lightweight units (Capesize bulkers, VLOCs and VLCCs) and this seems to be (with the exception of tankers) one of the most active sectors for the recycling of older assets at present. After a stunning surge which saw prices improve by over USD 35/LDT over December and the early part of January, consecutive days of steel declines in India have started to put downward pressure on the local market. As such, it is worth issuing a cautionary note as we head into the long Lunar / Chinese New Year holidays this week that there may ensue several weeks of softer activity and dampened prices / demand as a result. If the current trends persist - with poorer freight rates (particularly on dry bulk vessels) - then the markets may well see a deluge of tonnage for recycling after the holidays and that will certainly put downward pressure on prices once again, just as some improved levels and market stability had started to be seen of late. Prices in both India and Bangladesh have surged above the USD 400/LDT mark in recent times (particularly for favored container units), but all of that could be in danger if supply starts to outstrip demand and fundamentals suffer going into February. Finally, the Turkish market has already started to suffer, with price declines on the back of falling steel prices being reported this week. For week 4 of 2020, GMS demo rankings / pricing for the week are as below. Demo Rank 1 2 3 4 Dry Bulk USD / LDT USD 390 / LT USD 380 / LT USD 370 / LT USD 230 / MT Tankers USD / LDT USD 400 / LT USD 390 / LT USD 380 / LT USD 240 / MT Containers USD / LDT USD 410 / LT USD 400 / LT USD 390 / LT USD 240 / MT Location Sentiment India Bangladesh Pakistan Turkey Steady Steady Steady Declining \ All at GMS would like to wish readers a Happy Chinese New Year!!

2. GMS Weekly Page 2 of 8 BANGLADESH TONNAGE FOR ALL! The recent efforts by Bangladeshi Buyers to keep up with a rampant Indian market have somewhat slowed, as a fresh batch of vessels introduced into the market this week seems to have convinced local Recyclers that there is plenty of tonnage to go around for all markets to bid on, even at comparatively reduced rates. The majority of the recently concluded large LDT dry units (particularly VLOCs of 38K – 40K LDT) have been committed into Bangladesh this year and the number of capable and open End Buyers is already starting to dwindle as a result. Chinese New Year holidays may be coming at an opportune time this week, in order to stem the flow of tonnage and bring back a bit of confidence / aggression to continue buying units post holidays. Competition high. Stem the flow. NO MARKET SALES REPORTED

3. GMS Weekly Page 3 of 8 INDIA NERVES OF STEEL! As the highest placed sub-continent market, there were a few nervous wobbles in India this week as consecutive days of steel declines (by almost USD 8/LDT) temporarily bought a halt to the buying mid-week and an easing in previously surging sentiments. However, subsequent gains towards the end of the week seemed to put the market back on a positive track and several market and private deals were concluded to Alang Buyers, at continuingly firmer rates. The INR continues to trade into the low Rs. 71s against the U.S. Dollar, in encouraging signs on local fundamentals as the markets gear up for a potentially busy year ahead – especially with charter rates starting to soften and higher VLSFO prices that would compel more vessels to be introduced for scrap. On the sales front, at least two units were concluded to local Recyclers as the Russian owned AMUR (3,861 LDT) was committed basis a rather firm USD 416/LT LDT. Additionally, bulk carrier ULA (LDT 8,040) was committed basis an India / Pakistan delivery – however, given ongoing Pakistani reticence to offer on units, she will more than likely end up in India. Finally, GMS is proud to announce the accession to class NK HKC status of Leela affiliate yard Efcee Global Ship Recycling Yard, Plot number 84-D, in further encouraging strides and raised standards made in the industry. Fundamentals wobble. NK yard addition. MARKET SALES REPORTED VESSEL NAME AMUR ULA TYPE LDT 3,861 8,040 REPORTED PRICE USD 416/LT LDT USD 388/LT LDT General Cargo Bulk Carrier

4. NO MARKET SALES REPORTED GMS Weekly Page 4 of 8 Page 5 of 8 PAKISTAN UNABLE TO ACQUIRE! The Gadani market unfortunately remains positioned some ways behind their sub- continent competitors and despite an increase in supply, local Recyclers have been unable to get their hands on any market / private tonnage that has been proposed for sale of late. The import of Iranian steel has halted and this should hopefully bring back pricing to more of an even keel, yet there remains a real lack of confidence to go and acquire at serious and competitive levels in Pakistan, having been on the sidelines for over two years now. There is perhaps the lingering hope in Gadani that the increased supply of tonnage should see vessels trickle down, even to their competitively lower placed market, yet, we shall see whether this situation materializes in due course (or not). Positioned behind. Lingering hope. NO MARKET SALES REPORTED

5. Page 5 of 8 GMS Weekly TURKEY FACING THE UNEXPECTED! Even though the Turkish market was struggling through the maddening shortage of tonnage that has really affected the domestic ship recycling sector, fundamentals and prices had firmed over the last month and provided a degree of confidence to local Buyers that should the availability of tonnage improve in 2020 (thanks to the low Sulphur regulations that came into effect), the Turkish market would be ready and be a suitable alternative to the subcontinent markets. Unfortunately, local steel prices have declined by a noteworthy USD 25/MT, resulting in local offerings rolling back in kind. Even the Turkish Lira has started to decline this week as it approaches TRY 6.0 mark against the U.S. Dollar. Making matters worse have been the firming sub-continent markets and the increasingly widening pricing gap between the 2 locations (at nearly USD 200/Ton), ensuring that other than offshore units coming in from EU waters for green recycling, the chances of Aliaga Recyclers picking up any prospective market units in the near future is all but impossible. As a result, an increasingly dire situation for the Turkish market is about to unfold in the coming weeks. Steel declines USD 25/MT. Increasingly dire situation. NO MARKET SALES REPORTED

6. Miscellaneous i Page 6 of 8 FUN FACTS Bullfrogs do not sleep. The dark region on the north pole of Pluto’s moon, Charon, is called Mordor. Eight of the ten largest statues in the world are of Buddhas. In 2015, a silver coin with Superman on the heads side was made which is legal tender in Canada. There was only 350,000 produced. It took the creator of the Rubik’s Cube, Erno Rubik, one month to solve the cube after he created it; as of June 2018 the world record is 4.22 seconds. Japanese square watermelons are ornamental plants and are not edible. Tigers have striped skin not just striped fur. The stripes are like fingerprints and no two tigers have the same pattern. Ketchup originated in China as a boiled-down brine of pickled fish and spices called ‘ke-chiap’. In Morse Code -.- means k. In 2005, a fortune cookie company called Wonton Food Inc. correctly foretold lottery numbers, resulting in 110 winners and an investigation. No fraud was involved. Two PlayStation 1 games, FIFA 2001 and Gran Turismo 2, has scratch & sniff discs. The FIFA 2001 smelled like a soccer field, while Gran Turismo 2 smelled like car tires. IMPORTANT DATES INDIA BEACHING TIDES January 21 – January 30 February 07 – February 15 February 22 – February 28 BANK HOLIDAYS January 26 – Republic Day No Holidays in February BANGLADESH BANK HOLIDAYS February 21 – Shaheed Day BEACHING TIDES January 26 – January 29 February 10 – February 13 February 26 – February 29 IMPORTANT BANK HOLIDAYS PAKISTAN CHINA TURKEY No holidays in January February 05 – Kashmir Day No holidays in January + February January 24 –30 – Chinese New Year No holidays in February Prices indicated above are as reported in the market and are not necessarily accurate. This information is provided without prejudice and is given in good faith and without any guarantees whatsoever. While every care has been taken in the preparation of this report, no liability can be accepted for any loss incurred in any way whatsoever by any person relying on the information contained herein. Opinions expressed herein may be deemed subjective and arbitrary. This WEEKLY is intended only for the person or entity to which it is addressed and may contain confidential and/or privileged material. Any review, retransmission, dissemination or other use of this information by persons or entities other than the intended recipient is prohibited.

7. GMS Port Report Page 7 of 8 ALANG - Port Position as of January 24, 2020 No. 1 2 3 4 5 6 7 8 9 10 11 Total Tonnage VESSEL NAME LDT TYPE Barge LNG Oil Tanker Utility Vessel Utility Vessel Oil Tanker Gas Carrier Container Container Crew Boat Crew Boat STATUS Arrived January 23 Arrived January 23 Arrived January 13 Beached January 23 Beached January 23 Beached January 21 Arrived January 24 Arrived January 19 Arrived January 20 Beached January 23 Beached January 23 Abi - 2 GC (Under Tow) Denas Fan 4 Fan 6 Lotus Maha Sawasdee Laemchabang Sinokor Ulsan Zulu 7 (Under Tow) Zulu 9 (Under Tow) 3,856 30,174 1,374 1,126 580 3,312 8,350 6,952 2,942 115 156 58,937 CHATTOGRAM - Port Position as of January 24, 2020 No. 1 2 3 4 5 6 Total Tonnage VESSEL NAME LDT TYPE Bulk Carrier STATUS Arrived January 21 Arrived January 21 Arrived January 16 Arrived January 20 Arrived January 21 Arrived January 22 Berge Hua Shuan Bold Endurance Ji Tai No. 8 Jin Xing Karadeniz Powership Ragip Bey Trinity Explorer 40,394 5,839 2,091 5,355 1,469 959 56,107 Cable Layer / Support Vessel Tanker Bulk / Log Carrier Offshore Supply Vessel Accommodation Vessel GADANI - Port Position as of January 24, 2020 No. 1 Total Tonnage VESSEL NAME LDT TYPE STATUS Arrived January 21 Hua Wei 7 2,371 2,371 Oil / Chemical Tanker WHILE EXTREME CARE HAS BEEN TAKEN IN THE PREPARATION OF THIS REPORT, NO LIABILITY CAN BE ACCEPTED FOR ANY LOSS INCURRED IN ANY WAY WHATSOEVER BY ANY PERSON RELYING ON THE INFORMATION CONTAINED HEREIN.

8. Steel Plate Prices Page 8 of 8 INDIA STEEL PRICES USD/T INDIA STEEL PRICES PAKISTAN STEEL PRICES USD/T PAKISTAN STEEL PRICES BANGLADESH STEEL PRICES USD/T BANGLADESH STEEL PRICES CHINA STEEL PRICES USD/T DATE 1/18/2020 423.47 30,100.00 568.48 88,000.00 465.50 39,800.00 368.77 1/19/2020 423.47 30,100.00 568.48 88,000.00 465.50 39,800.00 368.77 1/20/2020 420.53 29,900.00 568.66 88,000.00 465.50 39,800.00 369.92 1/21/2020 415.73 29,600.00 569.21 88,000.00 465.50 39,800.00 370.23 1/22/2020 415.73 29,600.00 569.03 88,000.00 465.50 39,800.00 368.90 1/23/2020 418.13 29,800.00 569.03 88,000.00 465.50 39,800.00 368.78 1/24/2020 422.28 30,100.00 569.03 88,000.00 465.50 39,800.00 368.78 www.gmsinc.net GMS_Leadership GMS, Inc. snp@gmsinc.net Athens, Greece Tel: +30.210.899.0669 Cumberland, USA Tel: +1.301.759.9240 Hamburg, Germany Tel: +49.40.3197.9963 Shanghai, China Tel: +86.216.075.1900 Singapore Tel: +65.6823.8037 Bhavnagar, India Tel: +91.278.300.5253 Dubai, UAE Tel: +971.4.423.0720 New York, USA: +1.240.505.9716 Seoul, South Korea Tel: +82.10.4650.0720 Tokyo, Japan Tel: +81.3.5453.6311