Thyssenkrupp makes offer to workers for Tata Steel deal
Thyssenkrupp has offered workers commitments on jobs and investments to get union backing for its deal with Tata Steel to merge their European steel operations, several people close to labour union IG Metall said. Details of the offer are to be discussed at a meeting of management and labour representatives on Tuesday, the sources told Reuters on Sunday. (Reuters)
U.S. soy processors build new capacity at fastest rate in 20 years
U.S. agricultural cooperatives are building new soybean crushing plants at the fastest rate in two decades as farmers in the world’s top producer prepare to sow another record area with soy. The growth worldwide in the number of consumers with income to spend on pork and chicken has led to a rapid rise in demand for food to raise animals. Crushing plants produce high-protein soymeal feed for livestock and soyoil for food and fuel. (Reuters)
Small Canadian miners in pole position for electric vehicle battery boon
Canadian developers of cobalt and lithium mines stand to benefit from a round of investments from the makers of electric vehicles and the batteries powering them, a potential game-changer for small miners short on money to develop deposits of these critical battery ingredients. Toronto-listed cobalt companies, Ecobalt Solutions and Fortune Minerals, are in talks, ranging from preliminary to more advanced, with more than a dozen groups, including car and battery makers, on financing their projects, their chief executives told Reuters. (Reuters)
Last Index Published Date: 11 DECEMBER 2017
Baltic Exchange Dry Index 1727 +25
Baltic Exchange Capesize Index 4272 +79
Baltic Exchange Panamax Index 1624 +36
Baltic Exchange Supramax Index 939 -4
Baltic Exchange Handysize Index 632 +1
‘Xin Chang Hai’ 2017 179200 dwt dely Lanshan prompt trip via NoPac redel Singapore-Japan $29,500 – Berge Bulk
‘Saronic Champion’ 2011 93115 dwt dely Gibraltar spot trip via USEC redel Gibraltar-Skaw $17,250 – cnr
‘Loch Long’ 2013 81600 dwt dely San Ciprian spot trip via US Gulf redel Passero $17,000 – Cargill
‘Seastrength’ 2011 81133 dwt dely retro Paradip 25 Nov trip via EC South America redel Singapore-Japan $12,500 – Glencore
‘BTG Fuji’ 2016 80800 dwt dely Japan prompt trip via NoPac redel Singapore-Japan $12,500 – ADMI
‘Grand Alma’ 2011 79445 dwt dely Ghent 10 Dec redel Gibraltar-Skaw $17,500 – Suek
‘Prabhu Puni’ 2002 76015 dwt dely Cai Mep 11/13 Dec trip via Indonesia redel Philippines $13,000 – Klaveness
‘Navios Venus’ 2015 61339 dwt dely Zhoushan prompt trip redel Chittagong intention clinker approx. $11,200 – cnr
‘Imabari Queen’ 2017 60472 dwt dely Gdansk 14/16 Dec trip redel east Mediterranean $20,000 – Grandwest
‘Aetolia’ 2010 58106 dwt dely Kohsichang prompt trip via Indonesia redel China $9,000 – Xiang Sheng Shipping
‘Jin Jun’ 2009 56952 dwt dely Zhoushan 09/10 Dec trip via Philippines redel China intention nickel ore $9,000 – Huaya
‘Ithomi’ 2011 56441 dwt dely Paradip prompt trip redel China intention iron ore $9,000 – Intermarine
‘ND Armonia’ 2011 56121 dwt dely Fangcheng prompt trip redel Vietnam intention clinker $11,000 – cnr
‘Anasa’ 2008 55679 dwt dely US Gulf prompt trip redel EC Mexico intention grain $20,000 – Pacnav
‘Armata A’ 1996 43769 dwt dely Singapore prompt trip via Indonesia redel China $8,000 – Intermarine
‘Interlink Sagacity’ 2015 38800 dwt dely CJK prompt trip via N China redel W Africa intention steels $7,100 – Extrabulk
‘Argentina ‘ 2010 177897 dwt dely Singapore-Japan February-March 2018 11/13 months trading redel worldwide $16,750 – cnr – <fixed last week>
‘Medi Hong Kong’ 2006 82790 dwt dely Paradip 15/21 Dec about 10/12 months redel worldwide $12,250 – EGPN
Oil prices fell as last week’s rise in the U.S. rig count pointed to a further increase in American production that could undermine OPEC-led efforts to tighten markets. Gold prices steadied above a four-month low, but lacked upward momentum as expectations of higher interest rates in the United States supported the dollar. London metal prices edged higher, following robust trade data from China, while zinc rallied as a crackdown on pollution in China dampened growth in mine supply. U.S. soybean futures fell for a fourth consecutive session as forecasts for rain across South America pushed prices to a 10-day low on expectations of increased output amid already ample global supplies. (Reuters)
Saudi Arabia to supply full January crude volumes to several Asian buyers
Saudi Arabia, the world’s top oil exporter, will supply full contractual volumes of crude to five North Asian refiners in January, unchanged from the previous month, five sources with direct knowledge of the matter said on Monday. Steady supply of Saudi oil to Asia will help meet robust demand in the region, with flows from places such as Europe and the United States slowing. (Reuters)
Kuwait oil minister: exit strategy of global cuts to be discussed before June
Kuwait’s oil minister Essam al-Marzouq said on Sunday that OPEC and other oil producers will study before June the possibility of an exit strategy from the global oil supply-cut agreement. “There are still meetings every couple of months for the ministerial monitoring committee, and there will be a study formed for the possibility of an exit strategy… before June,” he told reporters. (Reuters)
Venezuela’s oil sales to U.S. fell in November to lowest level since 2003
Venezuela’s crude oil exports to the United States fell in November to their lowest level since January 2003, when a strike knocked down the country’s output, due to sanctions and a steep production decline, according to Reuters data. State-run oil company PDVSA and its joint ventures sent 475,165 barrels per day to its customers in the United States last month, down 36 percent from a year earlier and 12 percent from October. (Reuters)
Mineral Resources trumps Chinese bid for Australian gas producer AWE
Australia’s Mineral Resources has offered A$484 million ($364 million) for domestic gas producer AWE Ltd, topping a sweetened bid from state-owned China Energy Reserve and Chemicals Group (CERCG). The two suitors are targeting AWE’s stake in a gas project in Western Australia, Waitsia, which the company has called the country’s biggest conventional gas find onshore in four decades. (Reuters)
Mexico says deepwater oil tender doomed by Brazil competition
Mexican national oil company Pemex on Friday blamed the cancellation of a potentially lucrative deepwater Gulf of Mexico project on weak investor appetite due to competition from recent auctions in Brazil and low oil prices. Mexico’s oil regulator on Thursday cancelled a tender to pick an equity partner for Pemex’s Nobilis-Maximino project, as company interest was not as robust as expected. (Reuters)
The Next U.S. Crude Export Surge May Start at a Lonely Gulf Buoy
A 1,000-foot ship will likely pull up to a buoy floating in the Gulf of Mexico next year, hook up its hoses and usher the U.S. into a new era as a major oil exporter.
The Louisiana Offshore Oil Port, which already handles imports from similar large ships known as Very Large Crude Carriers, or VLCCs, will likely be the first port to to load oil into a supertanker. LOOP has indicated that its pipelines require minor modifications and could operate in both directions in early 2018.
“Expanding U.S. ports to accommodate direct loading of VLCCs will logistically help to streamline and expedite exports,” said Michael Tran, a commodities strategist with RBC Capital Markets LLC in New York.
Loading these mammoth ships without having to use other tankers to ferry the oil from shore could save shippers about a million dollars on each cargo. To a refiner in Europe or Asia, that may mean the difference between using U.S crude instead of oil from the Middle East, North Sea or West Africa. It may broaden the market for shale producers and further boost U.S. exports, which quadrupled in the past year to as high as 2.1 million barrels a day.
A VLCC that gets its entire 2 million-barrel cargo directly from a single terminal spares the exporter the cost of hiring smaller ships to fill it up, Sandy Fielden, director of research and commodities for Morningstar Inc. in Austin, Texas, said in a phone interview. This process, known as reverse lightering, could cost at least 50 cents a barrel, he said.
In addition to the freight cost, shipowners bill charterers if there are delays in lightering, which are not uncommon. These late fees, or demurrage, can run more than $35,000 a day for a VLCC, said Stefanos Kazantzis, a senior shipping and finance adviser at ship brokers McQuilling Partners, Inc. in New York.
LOOP has a big advantage over Texas ports. Its buoy sits 20 miles (32 kilometers) offshore in 100 feet of water, deep enough to handle the biggest tankers. The ports of Corpus Christi and Houston, which currently handle the most exports, aren’t deep enough to fully load a VLCC with a draft of 70 feet to 74 feet.
Corpus Christi has embarked on a three-to-six year project just to deepen its harbor enough to allow 1 million-barrel ships to come in. Eventually, it wants to dredge further, to be able to receive VLCCs, and will be issuing bonds next year to help pay for that project.
One challenge for LOOP will be getting enough crude. While it’s connected to offshore fields in the Gulf of Mexico, the region’s production is relatively small at 1.65 million barrels a day, according to latest government data. And there’s plenty of demand for the oil from local refiners.
No pipelines directly connect North Dakota and West Texas fields to Louisiana. LOOP receives some Texas supply through Royal Dutch Shell Plc’s 350,000-barrel-a-day Zydeco crude pipeline, which runs from Houston to various points in Louisiana.
But the pipeline is well used and there is enough demand from refiners along the route that there will be little left for export markets, said Vikas Dwivedi, senior analyst at Macquarie Capital (USA) Inc. For Zydeco to supply export needs, it would have to be expanded, he said.
Shell spokesman Ray Fisher said there are no immediate plans to increase the capacity of this line.
A reversal of the Marathon Petroleum Corp.-operated Louisiana-Illinois Capline could enable Midwest supply to reach LOOP. Marathon is gauging interest to ship supplies south, but the pipeline project will only be ready in the second half of 2022, and at an initial capacity of just 300,000 barrels a day.
Some minor logistical issues may also need to be worked out. LOOP pumps oil from ships at the offshore buoys through a 45-mile pipeline to onshore tanks at Clovelly, Louisiana. Oil already sitting in the pipe, known as linefill, kickstarts the discharge of supplies from the vessel. Much of that linefill is the heavy, high-sulphur crude that LOOP typically receives. By contrast, most of the U.S. exports would be light and low sulphur.
Terry Coleman, a spokesman for LOOP LLC, declined to comment. It’s not likely to derail LOOP’s plans, according to analysts.
“It’s not a big logistical barrier,” Fielden said. “The fact that LOOP has put this proposal out there suggests that they do have a solution.” (Bloomberg)
Bangladesh’s BPC plans 10 ppm sulphur gasoil imports from mid-2018
State-run Bangladesh Petroleum Corporation plans to start imports of 10 ppm sulphur gasoil in July 2018, ahead of a government mandate to switch to the ultra low sulphur diesel grade from 2019, a senior BPC official said December 6.
The country’s sole gasoil importer expects to import around 1.75 million mt of 10 ppm sulphur gasoil during July-December 2018, he added.
“We want to start importing the cleaner gasoil earlier from mid-2018 to stay in advance over the mandatory provision of shifting the gasoil specifications to lower sulphur content,” he said.
BPC is set to roll out tighter gasoil specifications in January 2019, from the current 500 ppm sulphur gasoil grade under a directive from the Ministry of Environment and Forests.
But the directive only applies to imports as Bangladesh’s sole refinery is still producing 0.25% sulphur gasoil.
In general, oil companies need a lead time — which can take up to several months — ahead of any mandatory switch to tighter specifications fuel in order to clear existing supply and flush their distribution lines and storages.
While BPC’s existing gasoil suppliers are able to start supply of 10 ppm sulphur gasoil from early 2018 as many newly built refineries are producing ultra low sulphur diesel in larger volumes, BPC is already in the final stage of awarding its oil products tender for first-half 2018 that includes 780,000-980,000 mt of 500 ppm sulphur gasoil, the official said.
Adding to this, BPC is in final negotiations with term suppliers to import 0.05% sulphur gasoil during H1 2018, which means BPC will not be able to take in 10 ppm sulphur gasoil until its next term cycle, he added. Meanwhile, BPC may have to raise pump prices of gasoil to offset higher import costs of 10 ppm sulphur gasoil. Currently, the retail price of 500 ppm sulphur gasoil is Taka 65/liter (81 cents/liter).
BPC last lowered the sulphur content in its gasoil import specifications in January 2015 to 500 ppm, from 2,000-2,500 ppm.
Its 1.5 million mt/year (33,000 b/d) refinery at Chittagong however, is still producing 0.25% sulphur gasoil. The refinery is expected to be upgraded to produce 10 ppm sulphur gasoil after the planned 3 million mt/year refinery, that can meet ultra low sulphur diesel specifications, to be built near the existing unit comes online by 2021.
Bangladesh has been importing around 3.5 million-3.7 million mt/year of gasoil over the past several years to meet mounting domestic demand (Platts)
World’s Biggest Automated Box Terminal Starts Trial Operation
China’s Port of Shanghai has launched trial operations at its brand new automated container terminal, described as the world’s largest unmanned box terminal, Xinhua news agency reports.
The terminal at Shanghai Yangshan Deep Water Port, a deep water container port located in Hangzhou Bay south of Shanghai, kick started test operations on December 10.
The terminal is the fourth stage of the Yangshan port development project and occupies an area of 2,23 million square meters and a coastline area of 2,350 meters.
As informed, the core technology of the fully-automated terminal was developed in China.
The port is able to handle the biggest containerships of today and once fully operational will be able to handle 4 million TEU on annual basis.
The final objective for the port is to reach a total operational capacity of 6 million TEU per annum.
According to Chen Wuyuan, President of Shanghai International Port Group, cited by Xinhua, the automated terminal will increase the port’s handling efficiency and cut carbon emissions.
The investment in the terminal automation equipment is said to be worth approximately USD 2.1 billion.
The Yangshan Deepwater Port project is expected to be finalized by 2020. (World Maritime News)
NGOs Denounce PHP Yard’s Shipbreaking Certification
Trade unions in Bangladesh and NGO Shipbreaking Platform’s member are questioning the Statement of Compliance with the Hong Kong Convention issued to PHP Family shipbreaking yard in October.
According to NGO Shipbreaking Platform, the unions are concerned that such a labelling “sets a dangerous precedent for the further green-washing of the Chittagong beaching yards.”
The PHP Family (Peace Happiness and Prosperity) shipbreaking yard, which received the Statement of Compliance from the Italian classification society RINA, has allegedly rejected the workers’ right to freedom of association, and employees that have strongly engaged in demanding respect of workers’ rights have even been fired.
Additionally, the Platform informed that accidents at the PHP shipbreaking yard continue to happen.
“It is shocking that a company that rejects legitimate trade union activities can be stamped as operating in line with international laws. The Hong Kong Convention clearly fails in setting standards that will protect workers,” Nazim Uddin, local trade union leader and Bangladesh representative at IndustriALL, said.
Despite some investments in the PHP yard to concrete parts of the upper beach, there are still deficiencies in infrastructure for the containment of toxics. When vessels are cut in the intertidal zone, toxics are inevitably released in the sea.
The Platform said that the Statements of Compliance with the Hong Kong Convention “are clearly no guarantee that the environment and workers are protected from the many risks connected to the heavy and hazardous industry of ship recycling.”
Ingvild Jenssen, Director and Founder of the NGO Shipbreaking Platform, concluded that any ship owner looking for a safe and clean location for the recycling of their ship “will be wise to disregard the very misleading Statements of Compliance with the Hong Kong Convention, and instead consult the upcoming EU List of approved ship recycling facilities.” (Splash247)
Khalifa Port Set to Handle Capesize Ships under EGA Deal
Port developer and operator Abu Dhabi Ports is to welcome some of the world’s largest bulk carriers as part of a long-term port facility deal signed with UAE-based industrial company Emirates Global Aluminium.
Under the agreement, EGA would use Capesize vessels to import bauxite from the Republic of Guinea in West Africa for Al Taweelah alumina refinery through Khalifa Port. The parties informed that, with this deal, Abu Dhabi Ports would be able to develop the port to become the first in the Gulf capable of directly handling these massive ships.
Abu Dhabi Ports will fund and complete dredging and widening works to the Khalifa Port approach channel and basin including EGA’s berth. The dredging will deepen the channel to 18.5 metres and basin to 18 metres basis zero tide.
EGA plans to use large dry bulk ships to import raw materials without the need to transfer all or some of the cargo to smaller vessels outside the port, reducing long-term shipping costs and improving environmental performance.
The development at Khalifa Port is expected to lead to larger ships calling in to Abu Dhabi, boosting the Emirate’s position as a global maritime trade hub.
EGA is currently constructing UAE’s first alumina refinery next to its aluminium smelter in Khalifa Industrial Zone Abu Dhabi, located adjacent to Khalifa Port. Upon achieving full-production, the Al Taweelah alumina refinery will process five million tonnes of bauxite per annum.
“Khalifa Port will be the first port in the region with capsize vessel handling capacity, and with EGA’s long term commitment, will give an important boost to trade and investment in KIZAD and more broadly in the region,” Mohamed Juma Al Shamisi, Chief Executive Officer of Abu Dhabi Ports, said.
Bauxite ore from Guinea will be transported to Abu Dhabi via the global shipping firm Kawasaki Kisen Kaisha (K Line), under a separate agreement with EGA. One of the vessels K Line will use for this service was named Cape Taweelah in a ceremony held earlier this year. (World Maritime News)
Americas Medium Range short-haul freight runs up 33%-62% on week
The cost of carrying clean petroleum products on Medium Range tankers on the short-haul US Gulf Coast-East Coast Mexico and the USGC-Caribbean routes rose 62% and 33%, respectively, during the week of December 4-8, marking a significant shift in the period after Thanksgiving.
S&P Global Platts assessed the USGC-Caribbean run at $525,000 lump sum on December 7 and 8, up $100,000 from the December 6 assessment and a $175,000 rise from its published price on Monday. Since September 2015, day-on-day increases have only surpassed $100,000 four times.
The most recent position list obtained by Platts on Friday morning showed only three vessels available for prompt loading, and just over 20 for loading before December 18. One week prior, Platts counted nine ships available for prompt loading and around 30 tankers opening on the USGC within 10 days.
“Monday morning at 8 am I called it soft,” a shipbroker said. “However, PMI jumped out and took like 11 ships Monday/Tuesday, and completely cleared out front-end tonnage. There were a lot of prompt ships, but they all got scooped up.”
The situation in Mexico was further complicated by port closures due to bad weather, which prevents ships from docking.
“All of the ports in Mexico are closed, and the conditions at some are really bad,” a shipbroker said. “Tuxpan has been closed since the 6th, and it looks like it won’t open again until tomorrow or Sunday. … Madero is the same. We saw one of the Maersk ships start to drift due to bad weather.”
Freight on the USGC-East Coast Mexico trip was assessed at $300,000 lump sum on Friday, up 62% from the start of the week.
The first broker also pointed to somewhat firm demand.
“There were also just natural cargoes needing coverage, and moreover, TC2 was firm to begin the week and so USAC boats had gone that way.”
According to a shipowner, supply was particularly tight for natural cargoes that needed coverage on key dates.
“There were some requirements, meaning just USGC-Caribbean cargoes, and very thin positions for [December] 10-12,” the source said. (Platts)
Vale Sells Final Valemax Bulkers to Bocomm
Brazilian mining giant Vale has concluded a sale agreement for its two final very large ore carriers (VLOCs) with China’s Bank of Communications Finance Leasing (Bocomm).
The parties agreed a price tag of USD 178 million for the two 400,000 dwt Valemax bulkers. Data provided by VesselsValue shows that the ships in question are the 2012-built Shandong Da Ren and Shandong Da Zhi.
Constructed by South Korean Daewoo shipyard, the VLOCs have a market value of USD 61.8 million and USD 62.8 million respectively.
The amount agreed under the deal was received by Vale at the delivery of the vessels on December 7, the mining giant said.
With the transaction, Vale has finalized the sale of all 19 VLOCs it owned as part of its strategy to strengthen the balance sheet and focus on core assets.
In August 2017, the company sold the 2012-built Shandong Da Cheng and the 2011-built Shandong Da De to China’s Bocomm for USD 90.8 million and USD 87.2 million, respectively. (World Maritime News)
Formosa Plastics adds three more MRs at Guangzhou
Taiwanese tanker giant Formosa Plastics has returned to Guangzhou for more MRs.
Clarksons Research notes in its latest weekly report that Formosa Plastics has placed an order with CSSC Offshore & Marine Engineering, formerly known as Guangzhou Shipyard International, for three 52,000 dwt MR tankers to be built at its Nansha facility. The ships will deliver in 2019 and 2020 with other brokers putting a price tag of $32.5m per unit.
In early April this year Formosa Plastics contracted the same yard to build three similar ships for delivery in 2019. The yard is listed in Hong Kong and belongs to state-run China State Shipbuilding Corporation (CSSC).
Formosa Plastics’ diverse fleet includes 15 MR tankers currently trading, the majority of which were built at South Korea’s STX Offshore & Shipbuilding. (Splash247)
Essar details shopping list
Essar Shipping has detailed its shopping list with liquid bulk to the fore. The private Indian owner’s CEO Ranjit Singh, speaking with BusinessLine, a local media title, said Essar is in the market for panamax bulk carrier, an MR tanker and a suezmax so long as it wins long term charters to go with them.
Essar Shipping currently runs a fleet of 14 ships, mostly bulk carriers, comprising one capesize, six mini capes, one panamax, two supramaxes, two handymaxes and two VLCCs.
The average age of the firm’s fleet is 12 years.
Essar will scrap its 25-year old capesize in the next 18 months, Singh said, and replace it with a younger panamax ship. (Splash247)