3. The markets

Global economic activity and world trade picked up in the second half of 2013 and global growth ended at 3.0% compared to 3.1% in 2012. The worldwide volume of exports and imports climbed 4.1% year on year as of October 2013. There have been several signs of recovery, especially for the U.S. economy, but also for the euro area which turned from recession to growth in 2013. Although the euro area still struggles on many fronts, domestic demand appears to be improving and some countries are showing sign of progress. The Chinese economy rebounded strongly in the second half of the year led by acceleration in investments and growth, and ended with a growth of 7.7%, the same as in 2012.

The dry bulk market strengthened considerably in the second half of 2013 with both higher freight rates and improving vessel values. In the first and second quarter of 2013 the Baltic Dry Index (BDI) fell and ended 13% down compared to 2012. In the second half of the year, the index rose significantly resulting in a 71% higher freight market in the second half of 2013 compared to 2012. It was a very volatile year with spot capesize rates ranging from USD 4.200/day to USD 42.200/day. The 2013 average of the 4 T/C Routes for the Baltic Panamax Index and the 6 T/C Routes for Baltic Supramax Index ended at 9.472 and 10.275 $/day, respectively. The newbuilding price index increased by 8% in 2013, still 47% lower than the 2008 peak, and the 5-year old second-hand vessel values rose by 30%.

The container market for feeder vessels stayed relatively flat in 2013 with only minor improvements in freight rates and vessel values. The average time charter rate for sub-panamax 2.500 TEU standard type was USD 7.592/day in 2013 compared to USD 6.879/day in 2012. A total of 8 sub-panamax container vessels were delivered in 2013 and 20 were scrapped, reducing the fleet from 673 to 661 vessels during the year. 23 vessels were idle at year end.