Provisional revenue generation for the month of January 2016 was PKR 671.515 million through freight on lifting of Liquid Cargo, and PKR 298.497 million against freight on lifting of Dry Cargo. In total monthly revenue of PNSC was PKR 970.012 million approx.

Pakistan National Shipping Corporation (PNSC), a National Flag carrier enjoys a global presence in the shipping world with a fleet of nine (09) ships. It undertakes business operations in an internationally competitive environment, competes even for transporta-tion of national imports and exports and earns most needed foreign exchange for Paki-stan. PNSC fleet is a mix of double hull Aframax tankers, Panamax, Supramax, Handy-max and Handysize bulk carriers, all of modern vintage, having a total deadweight carry-ing capacity of 681,806 metric tons. PNSC transports all types of dry and liquid bulk cargoes on several geographical routes covering almost entire world. PNSC undertakes three main functions:

• Fleet Maritime Operations • Real Estate Management of Three Commercial Buildings • Marine Workshop (Repair & Maintenance of ships)

INSIDE THIS NEWSLETTER

Performance Outlook  1 

National Ports & Shipping     News  2 

Global Shipping Updates  3 

Business News  4 

Major Events of the Month  4 

A P R O M I N E N T P L A Y E R A N D K E Y S T A K E H O L D E R I N G L O B A L S H I P P I N G

I N D U S T R Y

C OMMERCIAL HIGHLIGHT S

F INANCIAL HIGHLIGHT S

During the month of January 2016, PNSC lifted 965,361.90 metric tons liquid and 67,193.76 met-ric tons Break Bulk/Bulk cargoes. PNSC also pro-vided Slot/NVOCC services and transported 344 TEUS during the month. All the five Dry bulk carriers remained fully employed on trip/voyage/time char-ter worldwide.

P N S C B R I E F

P A K I S T A N N A T I O N A L S H I P P I N G C O R P O R A T I O N

T H E N A T I O N A L F L A G C A R R I E R

Volume 11 Monthly Newsletter January 2016

All necessary preparations were being made to start Karachi-Gwadar and Karachi-Iran ferry services within two months, to provide comfort-able and affordable travelling facility to the people and devotees. The services would also promote tourism and generate economic activity in the region. Prime Minister Muhammad Nawaz Sharif, during his visit to Port Qasim Authority (PQA) on December 28, 2015 directed Pakistan National Shipping Corporation (PNSC), to expedite the work on Karachi-Gwadar and Karachi-Iran (for Zaireen) ferry services. Fol-lowing the directive, Federal Minister of Ports and Shipping Kamran Micheal has taken initiatives to launch the ferry service within two months and efforts were being made to strengthen ports and ship-ping sector in a proper manner. The people would enjoy safe journey for religious and general purposes. Currently, nine ships are operating in the area to carry out shipments to other ports and earning profit. (Reported in Business Recorder, 30th January 2016)

The Karachi Port handled 24.485 million tons of cargo during the first half (July-December) of 2015-16 as compared to 21.652m tons handled in the same period last year, an increase of 13.08 percent. Bulk of cargo handled by the port was related to imports which grew by 18.15pc year on year while export cargo registered a decline of 4.13pc. As per the official data, import of dry general cargo grew by 21.87pc to 8.321m tons from 6.828m tons in July-December 2014-15. Dry bulk cargo handling also grew by 8.64pc to 4.314m tons from 3.971m tons in the same period last year. Import of liquid bulk cargo rose 20.24pc to 7.131m tons from 5.930m tons in July-December 2014-15. However, handling of export cargo fell to 4.718m tons from 4.921m tons. As per the break-up of exports, the port handled 3.746m tons of dry gen-eral cargo as compared to 3.587m tons, an increase of 4.43pc year-on-year. However, export of dry bulk cargo declined by 45.56pc to 323,807 tons from 594,757 tons. Export of liquid bulk cargo also dipped 12.33pc to 648,127 tons from 739,317 tons in the same period last year. During July-December 2015-16, the port handled 938,258 TEUs as compared to 833,158 TEUs in the same period last year, a growth of 12.61pc. As per the details, handling of import containers grew 12.94pc to 484,797 TEUs from 429,238 TEUs. While, handling of export cargo containers also rose 12.27pc to 453,461 TEUs from 403,920 T EUs in July-December 2014-15. (Reported in Business Recorder, 24th December 2015)

Page 2 PNSC Monthly Newsletter January-2016

Federal Minister for Ports and Shipping Kamran Michael said that a fast ferry service between Karachi to Iranian port of Chabahar and Gwadar will be started in March this year. While chairing an Inter Ministerial meeting on fast ferry Service the Federal Minister said that Prime Minister Nawaz Sharif directed to launch the project shortly. Mr. Kamran Michael said that the service would facilitate Zaireen who want to travel to Iran and Iraq to visit religious places. We are going to start this service in the larger national interest and are working with other ministries to make it possible. He said that Ministry of Ports and Shipping would provide all possible help to Federal Investigation Agency, Anti Narcotics Force, Federal Board of Revenue, Ministry of Foreign Affairs and others at Karachi and Gwadar Ports. Regarding the requirements of Iranian side the minister said that it would be better that both the governments sign a document for executing the project. It was the priority of the government to provide maximum security to Zaireen and it would be dis-cussed thoroughly. Chairman Pakistan National Shipping Corporation (PNSC) Mr. Arif Elahi briefed the par-ticipants about the project of ferry service in detail. Secretary of the Ministry of Ports and Shipping Khalid Pervez, the chairman of Karachi Port Trust and representatives from ministries of interior and foreign af-fairs, FIA, FBR and ANF attended the meeting. (Reported in The News, 27th January 2016)

C H A R T I N G T H E F U T U R E W I T H I N T E G R I T Y

Ferry Service between Pakistan and Iran to Start in March 2016

Ferry Service: Generate Economic Activity, Promote Tourism

Karachi Port Cargo Handling Grows 13pc

Gwadar to Get First SEZ under CPEC

The first model Special Economic Zone (SEZ) will be developed at Gwadar under the $46 billion China-Pakistan Economic Corridor (CPEC) due to Beijing preference given to the region. Target is to make the Gwadar SEZ, spread over an area of 3,000 acres, fully functional by end of 2017. It will be developed by China and would accommodate industrial units for mines and minerals, food proc-essing, agriculture, livestock and energy. The remaining SEZs would be designed and developed on similar lines. According to the Plan-ning Commission a total of 27 SEZs would be set up across the country under the CPEC. KP leads in SEZs Khyber Pakhtunkhwa will have eight SEZs, the highest among all provinces, followed by seven each in Punjab and Balochistan, three in Sindh and one each in Gilgit-Baltistan and Islamabad Capital Territory. The three SEZs in Sindh would include an exclusive Chinese Industrial Zone near Ka-rachi over 2,000 acres besides a 1,250-acre Textile City near Port Qasim and the 300-acre Marble City Karachi. (Reported in Daily Dawn, 28th January 2016)

N A T I O N A L P O R T S & S H I P P I N G N E W S

C H A R T I N G T H E F U T U R E W I T H T E A M W O R K

The most destructive oil crash in a generation is giving ship owners a billion-dollar windfall. With the Organization of Petroleum Exporting Count­ries abandoning output limits in a drive for market share, ships that carry as much as 2 million barrels a trip are in demand to haul crude from the Middle East to Asia and North America. While oil prices fell about 35 per cent in 2015, average earnings for these carriers jumped to $67,366 a day, the most since at least 2009, according to Clarkson, the world’s largest shipbroker. Tanker analysts are predicting the rate boom will persist for many of the same reasons oil forecasters are bearish. OPEC shows no sign of reversing its market strategy, and Iran has outlined plans to ramp up its exports once economic sanctions against the country are lifted. The average carrier is about 332 me-ters long, or almost 1,089 feet, data from IHS show. The carriers’ earnings will more than double this year, according to analyst estimates compiled by Bloom­berg. The extra rates would work out at more than $5bn in additional revenues if applied across the entire fleet. A sce-nario in which crude oil prices are suppressed across 2016 could lead to a boom in tanker earnings of comparable magnitude to 2007-08. At the same time, low oil prices have served to stimulate world oil consumption, which rose by 1.8m barrels a day in 2015, the highest in five years, according to the International Energy Agency. With about 40pc of the world’s crude shipped by sea that will result in 1.4m barrels a day more cargoes this year, according to Clarkson data. The very thing which has been negative for oil markets has been positive for tanker markets. (Reported in DAWN Newspaper, 3rd January 2016)

Page 3 PNSC Monthly Newsletter January-2016

Billion-Dollar Windfall For Ship Owners

G L O B A L S H I P P I N G N E W S

Freight rates for capesize bulk carriers fall to lowest since June 1999 Freight rates for capesize bulk carriers on key Asian routes, which have fallen to 16 and ½ year lows, are set to remain unchanged as some European and Asian owners’ idle ships on reduced cargo volumes. It’s a similar feeling to last week - there is still no sign of freight rates going up and there is a very limited volume of cargo. There is no sign of seeing more cargo. A bottom in the market seems to have been reached by owners. Several have started to lay up or idle ships rather than trade them at a loss. With capesize rates down to levels not seen since mid-1999, 40-50 capesize vessels have been idled in Asian waters, according to a Sin-gapore-based capesize broker. Star Bulk and Zhejiang Ocean Shipping Co (ZOSCO) are among around seven capesize owners who have anchored vessels, brokers said. Capesize rates for a transpacific voyage are around $2,000 a day, the Singapore broker said. That compared with daily operating costs of about $7,300 per day, according to accountancy firm Moore Stephens. Norwegian ship broker Fearnley said in a note that idling or lay-up was now the real

alternative to sailing even for owners of modern tonnage. With capesize rates below $3,000 per day, owners are expected to cut their losses and scrap older vessels.(Reported in Business Recorder, 17th January 2016)

Iran To Boost Oil Output By 500,000 Barrels

Iran is aiming to increase its oil production by 500,000 barrels per day now that sanctions have been lifted under a landmark nuclear deal with world powers. Deputy Oil Minister Rok-noddin Javadi said Iran is determined to retake its share of the oil market, which plunged after crippling sanctions were imposed in 2012. The UN nuclear agency certified that Iran has met all its commitments under last summer`s agreement, prompting the lifting of a broad range of economic sanctions, including those covering the oil industry. Other sanctions unrelated to Iran`s nuclear program remain in place. Iran used to export 2.3 million barrels per day but its crude exports fell to 1m in 2012. Iran`s total production currently stands at 3.1m barrels per day. In the wake of removal of sanctions, Iran is prepared to increase its crude output by 500,000 barrels per day. Oil prices have recently plummeted to under $30 a barrel, the lowest in 13 years..(Reported in DAWN Newspaper, 19th January 2016)

Kuwait, Iraq Say OPEC Will Not Cut Output Alone The Kuwaiti and Iraqi oil ministers said that OPEC will not cut production unless producers outside the cartel do the same, despite the plunge in crude prices. Iraqi Oil Minister Adel Abdulmahdi said Baghdad was ready to cooperate on cutting production to raise oil prices, but only if non OPEC producers did so as well. The cartel is refusing to reduce crude output as it seeks to drive less competitive players, including US shale producers, out of the market. (Reported in DAWN Newspaper, 27th January 2016)

P.N.S.C Building Moulvi Tamizuddin Khan Road, P.O. Box No. 5350, Karachi-Pakistan. Phone : (92-21) 99203980-99 (20 Lines) Fax : (92-21) 99203974, 235636658.

E-mail: communication@pnsc.com.pk URL : http://www.pnsc.com.pk

B U S I N E S S N E W S

Page 4 PNSC Monthly Newsletter January-2016

China’s 2015 Coal Output Drops 3.5pc China’s coal production fell 3.5 percent to 3.68 billion tons in 2015, as declining demand and a drive by authorities to curb fossil fuel use forced many firms to cut back operations. China’s coal industry is struggling with a huge supply glut that has sapped prices and forced many mines to shut. Key coal-consuming industries like steel and power also experi-enced declines in 2015, with crude steel production falling 2.3 percent over the year and power generation dipping 0.2 percent. (Reported in Business Recorder, 27th January 2016)

Chinese Iron Ore Futures Fall To Two Session Low Chinese iron ore futures dropped for the second straight session as piling iron ore inventories at ports in the world’s top consumer and oversupply pressured the raw material. Iron ore inventories at China’s big ports have surged to above 100 million tons, traders said, as Chinese steel mills are running low operation rates while top miners in Australia and Brazil continue increasing production. High port stockpiles have suggested the supply glut remains over-whelming which will keep pressuring prices. The steel market demand and supply condition will not improve largely in the first quarter, so steel prices are likely to stay volatile at low levels. (Reported in Business Recorder, 24th January 2016)

M A J O R E V E N T S O F T H E M O N T H

Instructional Visit of WAPDA Administrative Staff College

WAPDA Administrative Staff College organized a 95th Middle Management Course where a group of 30 participants along with two faculty members visited PNSC Building Karachi. The participants were senior officers in Grade 18 and 19 and were drawn from all Power Distribu-tion Companies, Hydel Generation and NTDCL. The participants attended a briefing session held at PNSC Head office, Karachi on 22nd Janu-ary 2016. The Executive Director (Admin) Brig. Rashid Siddique briefed the participants about PNSC.

Eid Milad-un-Nabi Gathering Organized at PNSC Building

A gathering was organized by PNSC to celebrate Eid Milad-un-Nabi (Peace Be Upon Him) on 27th January 2016. Enlightening speeches of Chairman PNSC Mr. Arif Elahi, Executive Director (Admin), Brigd. Rashid Siddique and CBA President Mr. Naib Hussain were delivered on life of Holy Prophet Hazrat Muhammad (Peace be upon him).

During the month, Chairman PNSC met with top management of prominent organizations and exchanged views on mutual cooperation.

• Meeting at Prime Minister Office.

• Appeared as Chief Guest in DJRIAN Function at National Sailing Center.

• Meeting with Managing Director, MAN & BW.

• Presentation to Investors from USA , Mr. Michael Chapel at PNSC Office.

• Meeting with OCAC & M/s. Zishan Engineering Officials regarding port constraints for POL Handling.

• Inter-Ministerial meeting regarding ferry service .

• Addressing to PNSC officers in quarterly meeting at PNSC.