DRY
ArcelorMittal’s $1 bln India joint venture to get green light next week
State-owned Steel Authority of India Ltd (SAIL) is set to approve a long-proposed $1 billion joint venture with ArcelorMittal at its board meeting next week, three sources with direct knowledge of the matter told Reuters. The decision to approve the deal was reached after talks between ArcelorMittal’s billionaire Chairman Lakshmi Mittal, India’s Steel Secretary Aruna Sharma and SAIL Chairman P.K. Singh at a meeting last week in New Delhi. (Reuters)
Higher-than-expected sugar output to curb U.S. import needs
A hurricane that ripped through Florida will not curb the state’s cane sugar output and weaker-than-forecast demand will further reduce U.S. sugar import needs this year, a closely watched North American trader said on Thursday. U.S. production of beet and cane sugar will total 9.1 million tons (8.3 million tonnes) in the 2017-18 crop year, as cane fields in Florida withstood any real impact from Hurricane Irma, said JSG Commodities president and veteran trader Frank Jenkins at an industry conference on Thursday. (Reuters)
Russia will boost transport subsidies to speed grain exports in 2018
Russia will spend 2 billion roubles ($34 million) in grain transportation subsidies to help to speed exports in 2018, the Deputy Agriculture Minister said on Thursday. Already among the world’s largest wheat exporters, Russia is trying to step up a gear after this year’s record crop, which is keeping its grain storage, railway transport and export infrastructure working at maximum capacity. (Reuters)
China’s November coal imports down 18.24% on year to 22.05 million mt
China imported 22.05 million mt of coal in November, including lignite, thermal and metallurgical material, up 3.62 % from October but down 18.24% year on year, according to preliminary data released Friday by China’s General Administration of Customs.
China imported 21.28 million mt of coal in October and 26.97 million in November 2016.
For January-November, total imports rose 8.5% year on year to 248.17 million mt.
The country exported 0.75 million mt of coal in November, down 8.54% from 0.82 million in the year-ago month, the data showed. In October, exports totaled 0.12 million mt.
Exports over January-November were 7.47 million mt, down 6.9 % from 8.03 million mt in the year-ago period.
The GAC did not give a breakdown of imports and exports for November; it will be available later this month. (Platts)
BALTIC INDEX
Last Index Published Date: 8 DECEMBER 2017
Baltic Exchange Dry Index 1702 +23
Baltic Exchange Capesize Index 4193 +46
Baltic Exchange Panamax Index 1588 +24
Baltic Exchange Supramax Index 943 -1
Baltic Exchange Handysize Index 631 +1
TIMECHARTER
‘Maria G.O.’ 2011 87378 dwt dely Gibraltar 12 Dec trip via US Gulf redel India intention coal $21,800 – cnr
‘Star Kamila’ 2005 82769 dwt dely Hazira 8 Dec trip via Richards Bay redel India $14,000 – cnr
‘Doric Liberty’ 2012 82084 dwt dely CJK prompt trip via Australia redel India $11,250 – Ultrabulk
‘Aeolian Light’ 2007 82014 dwt dely Huanghua 7 Dec trip via Australia redel Japan $12,500 – MOL
‘Farah Louise’ 2017 81886 dwt dely Gibraltar prompt trip min 50 days trading via US Gulf & Spain redel Skaw/Barcelona $19,000 – Bunge
‘Cemtex Innovation’ 2013 81326 dwt dely Xinsha 10/11 Dec trip via Australia redel Singapore-Japan $13,200 – cnr
‘Innovation’ 2012 81309 dwt dely CJK 8 Dec trip via Australia redel Singapore-Japan $12,250 – cnr
‘Trans Africa’ 2017 81270 dwt dely Gibraltar 07/09 Dec trip via US Gulf redel Skaw-Cape Passero $18,000 – Vattenfall
‘Stefanos T’ 2011 80499 dwt dely EC South America 20 Dec trip redel Singapore-Japan $14,500 + $450,000 bb – Glencore
‘ADS Arendal’ 2004 76830 dwt dely Bayuquan trip via Australia redel Singapore-Japan $11,000 – NYK
‘Aqua Lady’ 2004 76492 dwt dely Canakkale 15/21 Dec trip via Black Sea & Sudan redel Port Said $15,500 – cnr
‘Apollon’ 2017 75614 dwt dely retro Mundra 30 Nov/02 Dec trip via South Africa redel India intention coal $13,000 – PWSL
‘Rosalia D’Amato ‘ 2001 74716 dwt dely Kamsar 20/25 Dec trip with bauxite redel Singapore-Japan $14,500 + $450,000 bb – Oldendorff – <recent>
‘Afovos’ 2001 74297 dwt dely Ningbo spot trip via Australia redel Singapore-Japan $10,250 – Hyundai Glovis
‘Great Century’ 2017 61441 dwt dely Magdalla 12 Dec trip via Richards Bay redel Kandla $12,000 + $200,000 bb – cnr
‘Navios Mercury’ 2013 61393 dwt dely Kosichang 10 Dec trip via Indonesia redel China $10,100 – Universe Eternity
‘Josco Runzhou’ 2011 58722 dwt dely S China prompt trip redel US Gulf $2,750 first 70 days thereafter $10,500 – cnr
‘Xin Xiang Hai’ 2012 56111 dwt dely N China prompt trip redel SE Asia $7,000 – cnr
‘RHL Clarita’ 2008 53828 dwt dely Annaba prompt trip redel India intention fertiliser $17,000 – cnr
‘Yangtze Legend’ 2015 39171 dwt dely Gresik 07 Dec trip via Indonesia redel China $10,000 – cnr
PERIOD
‘Pacific Century’ 2011 180467 dwt dely CJK mid Dec 11/13 months trading redel worldwide $17,750 – Bilgent
‘Istria’ 2013 81761 dwt dely Dalian 11 Dec balance of period about 3/5 months redel worldwide $11,250 – Louis Dreyfus
‘Egret Oasis ‘ 2014 76028 dwt dely Lianyungang 12/13 Dec 3/5 months trading redel worldwide approx. $11,000 – cnr
‘Ocean Gem’ 2011 75617 dwt dely Tanjung Bin 18/19 Dec 4/6 months trading redel worldwide $12,000 – Solebay
COMMODITY NEWS
Oil prices were stable, held back by a strengthening U.S. dollar but supported by China’s relentless thirst for crude amid the OPEC-led supply cuts that have already tightened the market this year. Gold edged up in early trade as investors resorted to bargain hunting after the yellow metal dropped below its recent trading range to hit the lowest in more than four months overnight. Shanghai copper futures were on track to end the week in negative territory after opening softer, ignoring signs of supply-side support. Chicago wheat futures ticked higher as the market took a breather after falling for the last four sessions with prices on track for the biggest weekly decline in four months on pressure from ample supplies. Sterling rose while the euro edged down, as traders waited to see if British Prime Minister Theresa May has finally clinched an elusive deal with Irish and EU officials on how they would run their post-Brexit Irish land border. (Reuters)
TANKERS
Kinder Morgan Canada wins Trans Mountain pipe expansion appeal
Canada’s energy regulator ruled on Thursday in favour of Kinder Morgan Canada Ltd’s appeal to sidestep some municipal permits for its Trans Mountain pipeline expansion, a major victory for the C$7.4 billion ($5.8 billion) project. The ruling, which came just three days after the regulator heard the case, could offset some of the construction delays afflicting the company, which said on Monday the project could be further set back if it could not get clarity about the permits. (Reuters)
China’s November natural gas imports hit record, crude shipments rebound
China’s natural gas imports in November rose to a record as domestic demand surged while crude imports were the second-highest ever, as refiners ramped up output to cash in on strong profits as fuel prices soar, customs data showed on Friday. November gas arrivals, including pipeline imports and liquefied natural gas (LNG) shipments, hit 6.55 million tonnes, breaking a previous record of 6.1 million tonnes last December, data from the General Administration of Customs showed. (Reuters)
Russia’s Rosneft knocks Sistema with new $2.2 bln lawsuit
Russian oil major Rosneft filed a new $2.2 billion lawsuit against conglomerate Sistema on Thursday, escalating a dispute which has rekindled concerns about the investment climate in Russia. The long-running row over mid-sized oil company Bashneft pits powerful Rosneft chief executive Igor Sechin, a close ally of President Vladimir Putin, against billionaire Vladimir Yevtushenkov who told Russian media outlet RBC that the latest lawsuit was an “act of intimidation”. (Reuters)
Hyundai Glovis Pens Crude Oil Shipping Deal with GS Caltex
South Korean logistics company Hyundai Glovis has inked a long-term crude oil shipping contract with compatriot oil refiner GS Caltex.
Under the deal signed on December 8, 2017, Hyundai Glovis will transport crude oil from Saudi Arabia and other countries from that region to Korea, the company announced on Korea Exchange.
As informed, the deal covers the period from October 1, 2019, to September 30, 2029.
The contract is worth KRW 209.8 billion (around USD 190.9 million), subject to change.
In line with the newly signed contract, the company plans to order a 300,000 dwt very large crude carrier (VLCC) at a domestic shipyard. The newbuilding would be delivered until the start of the contract with GS Caltex, local media reported.
Hyundai Glovis currently operates a fleet of more than 90 ships, including pure car and truck carriers (PCTCs), bulkers and tankers. (World Maritime News)
Mexico’s oil regulator calls off JV deepwater tender for lack of takers
A planned tender for a joint venture (JV) deep-water oil prospect in the Gulf of Mexico was cancelled on Thursday by Mexico’s oil industry regulator because of a lack of interest, according to Reuters.
CNH (Comisio Nacional de Hidrocarburos) called off the tender, which was intended to provide a partner for state oil company Pemex in developing the Maximino-Nobilis block, because there were no takers.
An auction had been planned for 31 January 2018.
Last month CNH had tried to make the JV more appealing by lowering Pemex’s stake from 49% to 40%. Joint ventures are relatively new in Mexico’s oil industry which used to be monopolized by Pemex.
Mexico has been opening up its oil industry to outside investment since 2013 as part of energy reform measures aimed at increasing the sector’s productivity.
The Maximino-Nobilis block is in the Perdido area, 15km from the marine border with the US and about 230km east of the state of Tamaulipas. It is estimated to contain more than 500 million barrels of crude oil equivalent. (Splash247)
China’s Sinopec Fuel signs term contract with Saudi Aramco to buy LPG for 2018
China Sinopec Fuel Oil Sales Co. Ltd, a wholly-owned subsidiary of state-owned Sinopec, has signed one year term contract with Saudi Aramco to buy LPG cargoes for delivery in 2018, a source close to the matter said Friday.
“The cargoes will comprise both propane and butane and are expected to start delivery in the first quarter of 2018,” the source said.
“The cargoes under the contract will be priced according to Saudi Aramco’s monthly CPs on an FOB basis, just like Saudi Aramco’s other term contracts,” the source added.
The total volume of the contract was not immediately known.
“This is Saudi Aramco’s second direct sale of LPG cargoes to China and Sinopec Fuel also has the right to recommend a monthly contract price to Saudi Aramco,” the source said.
Saudi Aramco signed its first term contract directly with a buyer in China, propane dehydrogenation plant operator Wanhua Chemical, in February 2016, and has subsequently renewed the annual term contract, S&P Global Platts reported earlier.
Saudi Aramco is the fourth biggest LPG supplier to China, mostly via international trading companies and Wanhau, sending 1.12 million mt of LPG to China in the first 10 months of this year.
Sinopec Fuel, whose core business used to be oil product trading, currently has no big LPG terminals and storage facilities in China.
“The company is expected to cooperate with other LPG import terminals or its sister companies which have LNG terminals and storage facilities for receiving the LPG cargoes,” the source said.
Unipec, another wholly-owned subsidiary of Sinopec, signed a long-term contract to buy propane from US refiner Phillips 66 in 2014, Platts reported earlier.
China’s LPG demand has seen significant growth in the past few years, attracting new suppliers to the market, sources said.
China’s LPG apparent demand had posted two-digit growth every year since 2013, with volume seen at around 49.84 million mt in 2016, up 79% from 27.91 million mt in 2013, according to Platts calculations based on data from the General Administration of Customs and the National Bureau of Statistics. (Platts)
SHIPPING
Former Hanjin Shipping boss jailed for insider trading
Choi Eun-young, 55, the former chairwoman of now-defunct Hanjin Shipping was handed an 18-month jail sentence by a court in Seoul today, convicted of insider trading.
Choi was sentenced for her family’s decision to sell off their stake in the Korean line days ahead of Hanjin announcing a court-led debt restructuring. The debt restructuring ultimately failed and Hanjin became the most high profile bankruptcy in the 62-year history of container shipping.
The court also ordered Choi to pay a KRW1.2bn ($1.09m) fine and forfeit KRW503m.
Choi is the wife of the late Cho Su-ho, the younger brother of Hanjin Group chairman Cho Yang-ho, who also runs the country’s top air carrier Korean Air. She took over the management control of Hanjin Shipping in 2006 after her husband’s death and headed the company until April 2014. (Splash247)
Melbourne port blockade forces ships to reroute
A 10-day workers dispute at the Port of Melbourne ratcheted up today with around 1,000 workers marching and blockading the Victoria International Container Terminal (VICT).
The dispute between the Maritime Union of Australia (MUA) and VICT centers around a recent audit which revealed that 22 workers did not have a Maritime Security Identification card, which lets workers into secure areas.
According to the union, the one worker who had taken the company to court had his employment terminated. The man in question has a criminal record.
The MUA wants VICT to withdraw its letter of termination and give the man shifts when he gets his permit back.
VICT argues that the sacked man lied about his criminal conviction.
Ships are already being diverted to other Australian ports as the blockade hits local supply chains. (Splash247)
Dalian, Wärtsilä to design shuttle tanker
Dalian Shipbuilding Industry Company (DSIC) and Wärtsilä have signed a joint industry project co-operation agreement to develop a production-level design for a new shuttle tanker.
Dalian, a subsidiary of the China Shipbuilding Industry Corporation, has already received approval in principle from DNV GL for its initial design.
The initial design includes a twin propulsion system and capacity for a DP2 crane and is in compliance with EEDI Phase 3 regulations.
Wärtsilä said it will provide technical expertise for the production-level design project, including developing the propulsion and thruster systems and electric configuration for the vessel’s dynamic positioning control system.
The 127,000 DWT tanker design is targeted at potential owners looking for inclusion of a dynamic positioning system for use in the North Sea and on the Norwegian continental shelf.
Wärtsilä Marine Solutions vice president Aaron Breshnahan said “We are excited to enter into this agreement that offers a proactive approach to meeting the future needs of the tanker sector. We congratulate DSIC for their vision and foresight in working to develop a state-of-the-art shuttle tanker.” (TankerShipping)
UK Maritime Sector Responds to Brexit ‘Breakthrough’ Deal
The UK and EU have struck a “last-minute” deal on Brexit that prevents a hard border on the island of Ireland but includes a divorce bill that could reach up to GBP 39 billion (USD 52.3 billion).
Maritime bodies in the UK welcomed the end of the political drama, expressing hope that the deal would be a basis for continuation of talks on trading relations.
“Negotiators may have cut it fine, but industry will welcome the fact that we can now progress to the most important stage of the negotiations; discussing our future relations,” David Dingle CBE, Chairman of Maritime UK, said.
“It remains our aim that we secure as frictionless a trading relationship as possible. This is in the interests of both sides of the Channel. Failure to get that frictionless deal will not only see delays and disruption at ports like Dover, Holyhead and Portsmouth, but also in the EU at ports like Zeebrugge, Calais and Dublin,” he added.
The maritime sector players feel that the UK should continue both its current economic participation and form in the single market and customs union during a transitional period as the simplest way to secure stability for the industry.
What is more, the sector believes that the transition period should last until a new deal is in force, and serve as a vehicle to transition to the terms set out in the new deal.
Commenting on the Brexit ‘breakthrough’ deal, Guy Platten, CEO of the UK Chamber of Shipping, said the language of the agreement “may be something of a fudge,” but that both sides have eventually shown some flexibility and pragmatism, which should be kept in further stages of talks as well.
“It is important to remember that nothing is agreed until everything is agreed, so there must be no assumption that the next stage will be easier. For that reason it is vital that European and British negotiators remember that open, free and fair trade is the best form of diplomacy, and a comprehensive trade relationship that allows goods to move through our ports without delay should be the target if we are to ensure long-term cooperation and friendship,” Platten continued.
“We cannot begin to plan for any transition, until we know what it is we are transitioning towards. For that reason we hope detailed trade discussions can begin swiftly, without delay, and without political posturing.”
The British Ports Association’s Chief Executive, Richard Ballantyne, called for focus on overcoming border disruption and the introduction of non-tariff barriers as part of any free trade negotiations.
“There is a still a long way to go of course and we remain concerned that new customs requirements could cause particular challenges for roll-on roll-off ferry ports which handle tens of thousands HGVs travelling between the UK and the EU each day,” Ballantyne pointed out.
“We would encourage both sides to explore options that ensure the cross border solution for the Irish land border is replicated elsewhere in the UK, this would enable trade with Europe to pass as smoothly as possible through our ports,” he added.
Ports have been at the forefront of discussions when policy makers in the UK and the EU have been examining the potential consequences of leaving the EU. The impacts of leaving the EU Customs Union and Single Market could be substantial.
Fears have been raised that potential customs and bureaucratic checks at the border could congest the ports and result in delays at certain ports adding costs for traders, manufacturers and consumers.
Today’s deal means that the UK is moving towards an agreement which could limit but not totally rule out these impacts, the association said. (World Maritime News)
USGC Supramax freight rates hit 2017 high on rush to fix before Christmas
Supramax freight rates from the US Gulf Coast reached year-to-date highs on Wednesday, buoyed by a rush of activity as participants with December cargoes and vessels sought to fix ahead of the Christmas period.
While fixing will continue over the holidays, activity traditionally slows to a trickle, leaving many participants looking to fix well in advance to avoid getting squeezed.
For charterers and shipowners the choice to fix in advance was strategic, but ship operators were the main force in the market, with nomination clauses for cargoes with December dates driving much of the activity.
Nomination clauses require ship operators to name the vessels on which they will transport cargoes they have booked ahead of their laycans, typically 10 days before.
The Houston to Aliaga petcoke route, basis 50,000 mt, was assessed at $21/mt, the highest level since late 2016, while the Houston to Krishnapatnam petcoke route, same basis, was assessed at $42/mt, also a year-to-date high.
Fixing from the US Gulf Coast was concentrated in the trans-Atlantic trips, with large coal and petcoke volumes moving to the East Mediterranean, and only a smattering of requirements seen for the Far East.
Soft fundamentals in the Black Sea and East Mediterranean have played a key role in driving the trans-Atlantic freight increases, with owners requiring compensation for redelivery/discharging in the region due to its bloated tonnage count, which has weighed heavily on rates in recent weeks.
This was evident through fixtures such as the SBI Phoebe, 62,000 dwt, heard fixed at $23,500/d basis delivery US East Coast to Ultrabulk for a trip to the UK-Continent, with a charterer’s option to the East Mediterranean $1,500/d higher at $25,000/d.
With 10-12 vessels opening in the Black Sea in the next 15 days this trend is likely to continue, a shipowner source said Wednesday, reporting bearish expectations for freight in the region.
The strength of the US market also manifested itself in a narrowing of pegs by participants on front-haul routes, with indications for petcoke trips from Houston to Krishnapatnam via the Cape of Good Hope tightly grouped around the $41-$42/mt mark Wednesday, compared with a spread of $36-$42/mt the previous week.
Several participants also observed that the differential between the time-charter trips fixed and their corresponding voyage rates had reduced sharply.
“It is the first time [this year] that it feels like people aren’t willing to discount voyages to secure business,” one shipowner source said, noting that it was another indicator of market strength.
While these changes were primarily attributed to stronger fundamentals in the US Gulf Coast, the shift can partly be attributed to rising bunker prices on the back of crude strength, with voyage levels ticking up to compensate for the higher operating costs.
Looking forward, participants expect a slowdown in activity over the Christmas holiday period and the start of 2018, but sentiment remains firm for Q1 as a whole, with Japan and China expected to resume imports as their corn stockpiles deplete.
Front-haul grain trips to the Far East have been sorely lacking for vessels in the US Gulf Coast this year, as grains were mainly flowing from the Pacific Northwest and South America, but the US Gulf may see a window of opportunity ahead of the South American 2018 harvest, which is expected to kick into gear in March. (Platts)
S&P
Oldendorff Expands Babycape Fleet with Four Ships
German shipping company Oldendorff Carriers has grown its Babycape fleet with four eco 119,000 tonners purchased from compatriot shipowner Hartmann Reederei.
The said acquisitions include MV UBC Ottawa, to be renamed Roland Oldendorff, MV UBC Odessa, to be renamed Rex Oldendorff, MV UBC Olimbus future Redmer Oldendorff and MV UBC Oristano, which will bear the name Rik Oldendorff.
The ships were built for Hartmann at Sinopacific Shipbuilding in 2011.
The latest fleet additions bring the company’s Babycape ship tally to 36 units, of which 10 will be fully owned.
“The Sinopacific 119k design, of which we will control all 10 including 8 owned and 2 chartered ships, has the optimum deadweight/draft ratio of nearly 119,000 tdw on only 14.5 m ssw draft. Our calculations show, that we should also be able to increase the intake of these vessels to more than 121,500 tdw on about 14.794 m draft,” the company said.
“Having 10 sister vessels which have optimal characteristics allows us to offer our clients a competitive advantage and more flexibility.”
Oldendorff said that the investment was being made amid a positive outlook for drybulk freight rates and values.
This deal takes the company’s total net acquisitions to 97 vessels of around 10 million tdw over the last 5 years with vessel takeovers between 2013 and 2020. (Splash247)
Ugland Shipping Takes Bulker Resale Pair
As part of its fleet renewal program, Norway-based shipping company Ugland Shipping AS has decided to acquire two Ultramax resales being built at Asian shipyards.
The company has signed a resale contract with Japanese shipbuilder Sanoyas Shipbuilding for a 60,500 dwt bulk carrier. Slated for delivery in 2020, the vessel will be a sister vessel to Olita and Belita, delivered from the same shipyard earlier this year, according to the company.
Furthermore, Ugland Shipping has also inked a resale deal with Tsuneishi Cebu shipyard in the Philippines for a TESS-64 type bulk carrier. The ship is scheduled for delivery in the second half of 2019.
“With these two resale contracts and the newbuilding from Imabari Shipbuilding due to be delivered in the beginning of 2019, we now have three bulker newbuildings to be delivered in the period 2019-2020,” the company said.
As informed, Ugland Marine Services will be in charge of all management functions for the new vessels.
The company added that it plans to sell one or more of its oldest bulkers before it takes delivery of the newbuildings. (Splash247)