‘The International Drybulk Shipping Industry Drybulk cargo is shipped in quantities and can be easily stowed in a single hold with litle rsk of cargo damage. According to industry sources, in 2013, approximately 4,307 million tons of cargo was transported by drybulk carirs, including iron ore, coal and grains representing 27 8%, 25.9% and §.6% ofthe total drybulk trade, respectively. ‘The demand for drybulk cartier capacity is determined by the underlying demand for commodities transported in drybulk carriers, which in tum is influenced by trends in the global economy. Between 2001 and 2007, trade in all drybulk commodities increased from 2.237 million tons to 3204 million tons, an increase of 43.2%. One of the main reasons for that increase in drybulk: trade was the growth in imports by China of iron ore, coal dnd steel products during the last eight years. Chinese imports of iron ore alone increased from 92.5 million tons in 2001 to approximately 383.7 million tons in 2007. In 2008, seaborne trade in all drybulk commodities increased to 3,298 million tons. However, demand for drybulk shipping decreased dramatically in the second quarter of 2008 evidenced by the decrease in Chinese iron ore imports which decreased froma high of 119.6 million tons inthe second quarter of 2008 to low of 97.7 million tons during the fourth quarter of 2008 representing a decrease of 18.3%, In 200, seabore trade in all drybulk commodities increased to 3,193 million tons as demand for deybulk shipping picked up following mainly an increase in (Chinese irom ofe imports from 44.3 million tons in 2008 to 628.4 milion tons in 2009. In 2010 and 2011, seaborne trade in ll drybulk commodities increased to about 3,594 million tons and 3,828 million tons, respectively, representing an increase since 2009 of 12.6% and 16.6% respectively. During 2012, seabome trade increased by 6.8% and Chinese iron ore imports rose by 8.5%. During 2013, seaborne trade increased by 5.4% and (Chinese irom ofe imports rose by 0.2% Demand for drybulk cartier capacity is also affected by the operating efficiency ofthe global fleet, with port congestion, which has been a feature of the matket since 2004, absorbing tonnage and therefore leading ta tighter balance between supply and demand. In evaluating demand factors for drybulk cartier capacity, we believe that drybulk carriers can be the most versatile clement of the global shipping flets in terms of employment alternatives. Drybulk carriers seldom operate on ound trip voyages. Rather, the norm is triangular or mult-leg voyages. Hence, trade distances ‘assume greater importance inthe demand equation, ‘The global drybulk carrer fleet may be divided into five categories based on a vessel's curying capacity. These categories consist of ge Ore Carriers, or VLOCS, have a carrying capacity of more than 200,000 dwt and are comparatively new sector of the drybulk carrier ‘haul iron ore routes. Very Lar fleet. VLOCs are built to exploit economies of scale on lon CCapesize vessels, which have carrying capacities of 110,000 ~ 199,999 dwt. These vessels generally operate along long-haul iron ore and coal trade routes. There are relatively few ports around the world with the infrastructure to accommodate vessels ofthis size Panamax vessels, which have a earying capacity of between 60,000 and 85,000 dwt. These vessels carry coal, grins, and, toa lesser ‘extent, minor balks, including steel products, forest products and ferilizrs. Panamax vessels are able to passthrough the Panama Canal ‘making them more versatile than larger vessels Hlandymax vessels, which have a carrying capacity of between 35,000 and 60,000 dwt. The subcategory of vesels that have a carrying ‘capacity of between 45,000 and 60,008 dt called Supramax. These vessels operate along a large number of geographically dispersed ‘global trade routes mainly carrying grains and minor bulks. Vessels below 60,000 dwt are sometimes built with on- board cranes ‘enabling them to load and discharge cargo in countries and ports with limited infrastructure Hiandysize vessels, which have a carrying capacity of up to 35,000 dwt, These vessels cary exclusively minor bulk cargo. Inreasingly, these vessels have operated along regional trading routes, Handysize vessels are well suited for small ports with length and draft restrictions that may ack the infrastructure for cargo loading and unloading "The supply of drybulk carriers is dependent on the delivery of new vessels and the removal of vessels from the global lect, either through serapping or loss. The orderbook of new drybulk vessels scheduled tobe delivered in 2014 represents approximately 9.8% ofthe world drybulk fleet as of January 1,2014-The level of serapping activity is generally a function of scrapping prices in relation to current and prospective charter market ‘conditions, as well as operating, repair and survey costs. Drybulk carriers at oF over 25 years old are considered to be scrapping candidate vessels, 33