DRY
Strategie Grains cuts export forecasts for EU wheat, barley
Strategie Grains lowered its monthly forecast for EU soft wheat exports this season as it factored in stiff competition on world markets and very slow shipments from Germany and Poland. The analyst firm projected 2017/18 soft wheat exports from the European Union at 22.3 million tonnes, down from 22.9 estimated last month and 24.1 exported in 2016/17. (Reuters)
Argentine drought could reduce 2017/18 soy planting area
A drought that has blighted Argentina’s Pampas farm belt since November could provoke a cut in estimated 2017/18 soybean planting area, the Buenos Aires Grains Exchange said on Thursday. The exchange’s soy area estimate is 18.1 million hectares, 1.1 million hectares of which were sown over the previous seven days, the exchange said in its weekly crop report. (Reuters)
South Africa’s Sibanye-Stillwater to be No. 2 platinum miner with Lonmin buy
South Africa’s Sibanye-Stillwater agreed to buy troubled miner Lonmin for about 285 million pounds ($382 million) to create the world’s No. 2 platinum producer in a bid to ride out depressed prices for the metal. Sibanye, whose CEO is called “Mr Fix It” for turning his firm from a spin-off with three old mines into a global precious metals player, said it would cut a third of Lonmin’s employees and deliver savings of about $112 million a year by 2021. (Reuters)
Egypt’s agriculture ministry updates policy to end ergot confusion
Egypt’s agriculture ministry has officially brought its policy on common grain fungus ergot into line with other government agencies, in a move traders hope will end long-running confusion over import requirements at the world’s biggest wheat buyer. “We want to reassure our suppliers,” Hamed Abdel Dayem, spokesman for the ministry, told Reuters on Thursday, confirming its new decree. (Reuters)
Thermal coal prices likely to remain strong through winter, then retreat: Citi
Thermal coal prices are likely to remain strong during the Northern Hemisphere winter, then come under downward pressure next year with China’s imports are likely to sag, Citi analysts said in a note Thursday.
“The impressive price strength this winter is unlikely to last,” Citi analysts said.
The 90-day price of FOB Newcastle 6,300 kcal/kg GAR coal has jumped almost 16% to date this year to be assessed Wednesday at $103.20/mt, S&P Global Platts data showed.
The Citi analysts forecast Newcastle 6,300 kcal/kg GAR coal prices to fall to about $80/mt FOB in the fourth quarter of 2018.
Citi said China’s government is committed to lowering domestic coal prices from current spot market levels, and to maintaining the price of domestic coal within a narrow range to benefit both producers and utilities.
For domestic 5,500 kcal/kg NAR material, China is looking to maintain a price range of Yuan 500-570/mt FOB Qinhuangdao basis.
Platts Wednesday assessed the price of FOB Qinhuangdao 5,500 kcal/kg NAR coal at Yuan 695/mt, up around 11% since the start of the year.
China’s coal imports over January-November were up 8.5% year on year at 248.17 million mt, according to latest customs data. The rise was attributed in part to higher domestic prices.
Citi analysts expect China’s thermal coal demand to dip 1% year on year in 2018 and domestic production to rise 2.5% year on year.
In a separate note, Citi said global carbon dioxide emissions were expected to rise by around 2% in 2017, with China being the main driver of the increase.
China’s emissions grew 3.5% this year from 2016, Citi said, citing the Global Carbon Project’s annual report.
“Given that China is just over a quarter of the world’s CO2 emissions, that means that close of half of the CO2 emissions came from China alone,” Citi said. Half of China’s emissions were likely contributed by coal-fired electricity generation, it added.
Increased coal-fired power generation itself will contribute nearly 270 million tonnes of additional CO2 emissions, Citi analysts said, noting that China’s coal-fired power generation grew 6.8% year on year in 2017.
However, a likely rise in hydropower generation may arrest the growth in CO2 emissions next year, Citi added. (Platts)
China’s mined copper demand to rise by 400,000 mt in 2018
China is forecast to add 400,000 mt mined copper demand in 2018, due to the anticipated commissioning of new copper smelting projects next year, Jiangxi Copper Corp said in its 2018 copper sector report.
The producer said China was forecast to put into use a total of 2.5 million mt/year new blister copper output capacity over 2017-20, with an estimated 440,000 mt/year blister copper capacity to be commissioned in 2018.
It said as some of the blister capacity might be commissioned in H2, 2018, thus delaying demand for concentrate, with new copper concentrate demand in China seen at 400,000 mt next year.
Jiangxi Copper said Chinese demand for copper concentrate was expected to rise further in 2019, on the anticipated commissioning of Aluminum Corp of China’s 400,000 mt/year refined copper project at Ningde City, Fujian Province, South China, as well as Yunnan Copper’s 300,000 mt/year refined copper project at Chifeng City, Inner Mongolia, Northwest China next year.
The producer said as China’s mined copper output growth could not meet all smelters’ needs, with an estimated of just 80,000 mt new mined copper output in China in 2018, so pressuring down treatment and refining charges. It said the negative impact on TC/RCs were expected by H2, 2018.
China imported 15.698 million copper ore and concentrates in January-November, up 2.68% year on year, data from the General Administration of Customs showed.
Meanwhile, Jiangxi Copper said China’s restriction of copper scrap imports was expected to spur a periodic refined copper shortage next year.
The producer said an estimated 350,000 mt of Category 7 copper scrap waste copper wire, cable and waste electrical grade could not be imported by China in 2018 on China’s scrap metal import restriction, which was expected to result in the 350,000 mt scrap to lie idle in overseas, then processed into Category 6 copper scrap (purple copper and yellow copper), and then exported to China.
Jiangxi Copper forecast China to add national refined copper output of 420,000 mt in 2018, with domestic refined copper demand rising by 280,000 mt next year.
The producer predicted China’s copper scrap imports in 2018 to dip, cutting domestic copper scrap supply, lifting the refined copper shortage, hiking imports of refined copper next year.
Meanwhile, China’s starting of an environment protection tax by Jan 1, 2018, is expected to impact around 370,000 mt/year domestic mined copper capacity next year, as it would hike mining costs, Jiangxi Copper said. It said the new tax could also affect the domestic copper smelting sector, exerting financial pressure on new projects.
Producers are asked to pay taxes of Yuan 15/mt ($2.25) for copper waste disposal and Yuan 25/mt ($3.75) for processing slag next year, according to the Ministry of Environment Protection. (Platts)
BALTIC INDEX
Last Index Published Date: 15 DECEMBER 2017
Baltic Exchange Dry Index 1619 -49
Baltic Exchange Capesize Index 3777 -159
Baltic Exchange Panamax Index 1677 -37
Baltic Exchange Supramax Index 942 -2
Baltic Exchange Handysize Index 636 +1
TIMECHARTER
‘New Huzhou’ 2010 175949 dwt dely Rizhao spot trip via EC Australia redel Singapore-Japan $25,500 – Jiangsu Steamship
‘SBI Rumba’ 2015 84867 dwt dely Immingham 16 Dec trip via Baltic and Mediterranean redel Cape Passero $23,000 – ACB
‘Troodos Sun’ 2016 84849 dwt dely PMO 17/20 Dec trip via South Africa redel Singapore-Japan $15,950 – cnr
‘Ever Sovereign’ 2017 82076 dwt dely US Gulf 01/05 Jan trip redel Singapore-Japan $16,750 + $675,000 bb – Crystal Sea
‘Daebo Newcastle’ 2011 81398 dwt dely Port Kelang 21/22 Dec trip via Indonesia redel South China $14,000 – cnr
‘Danhil’ 2012 81354 dwt dely Amsterdam 16 Dec trip via Baltic and Mediterranean redel Cape Passero $23,000 – Cofco
‘Rosco Plum’ 2004 76801 dwt dely CJK 18 Dec trip via NoPac redel Singapore-Japan $12,000 – Jera
‘Bulk Atacama’ 2014 61384 dwt dely Cristobal prompt trip via Puerto Nuevo Colombia redel Chile $28,750 – Oldendorff
‘African Raptor’ 2015 61286 dwt dely Gulfport 18 Dec trip redel Singapore-Japan $24,900 – Cargill
‘Explorer’ 2012 34147 dwt dely Djakarta prompt trip redel Philippines $10,200 – Fortuna Seaside
PERIOD
‘Sonia’ 2009 177974 dwt dely Qingdao 19/21 Dec 4/6 months trading redel worldwide $21,750 – Berge Bulk – <recent>
‘Darya Uma’ 2005 76520 dwt dely Dalian 25/30 Jan 11/13 months redel worldwide $12,500 – cnr
‘GH Sky Beauty’ 2017 63398 dwt dely Krishnapatnam 13/14 Dec 3/5 months redelivery worldwide $11,250 – cnr
‘Josco Hangzhou’ 2012 58669 dwt dely Nagoya 17 Dec 3/5 months redel worldwide approx. $10,250 – cnr
‘Aeolos’ 2001 32245 dwt dely East Mediterranean prompt min 3/abt 5 months redel Atlantic $9,500 – cnr
COMMODITY NEWS
Oil prices moved up, lifted by the Forties pipeline outage in the North Sea and ongoing OPEC-led production cuts, although rising output from the United States kept a lid on markets. Gold prices edged higher in Asian trade, heading for their first weekly gain in four, as the dollar sagged on concerns about the progress of U.S. tax reform. Copper and aluminium led gainers in Shanghai base metals futures, helped by overnight increases in the London market on the back of upbeat China manufacturing data. U.S. soybeans ticked higher, but were still on course for the biggest weekly loss in almost two months on expectations of rains in Argentina, the world’s third biggest supplier. (Reuters)
TANKERS
North Sea oil deliveries halted in first force majeure in decades
Deliveries of crude oil through the Forties pipeline in the North Sea are under force majeure for the first time in decades and operator INEOS said on Thursday there was no timeline yet for repair work that could last several weeks. The 169-km pipeline, which carries around a quarter of all North Sea crude output and around a third of Britain’s total offshore gas production, has been closed since Monday, following the discovery of a small crack in part of the system onshore in Scotland. (Reuters)
Rising U.S. output threatens global oil market balance in 2018
The global oil market will likely show a surplus in the first half of 2018, as rising U.S. supply offsets OPEC’s discipline in maintaining its production cuts for the whole of next year, the International Energy Agency (IEA) said on Thursday. “Total supply growth could exceed demand growth: indeed, in the first half the surplus could be 200,000 barrels per day (bpd) before reverting to a deficit of about 200,000 bpd in the second half, leaving 2018 as a whole showing a closely balanced market,” the Paris-based IEA said in its monthly oil market report. (Reuters)
Sea change: LNG tankers divert to China as winter gas shortage bites
Liquefied natural gas (LNG) is being re-exported to China from Japan and tankers are being diverted from as far away as Brazil, with traders rushing to find cargoes in the face of a supply crunch in the world’s No.2 economy as winter bites. Following an unprecedented drive to switch millions of households to natural gas from coal for heating, China’s imports of LNG have surged as utilities struggle to meet soaring demand as winter gets off to a colder start than usual. (Reuters)
Indonesia’s Pertamina postpones new crude processing deal for 6 months
Indonesia’s state-owned Pertamina will not immediately extend its crude processing deal with Unipec as awaits details of its 2018 equity allocation share of Iraqi Basrah crude following OPEC’s recent decision to extend its production cut agreement through to the end of next year, a senior company official said Thursday.
Pertamina said the company may hold the CPD for six months and it is open to a new deal with Unipec or other interested companies when the information on next year’s Basrah supply becomes more clear.
The current deal with the trading arm of Chinese oil major Sinopec ends December 31.
“We are waiting for the availability of Basrah crude. Iraq is one of the OPEC member countries. How much production is being cut, they haven’t given us any information,” the senior vice president of Pertamina’s Integrated Supply Chain, Toto Nugroho, said.
Pertamina will not sign any CPDs in the first half 2018, but it is likely to start in the second half of next year, with a volume that will match the company’s Basrah equity share, Nugroho said.
Pertamina has appointed Unipec to process 1 million barrels/month of its equity Basrah crude under the current CPD. The processing deal is valid over July-December this year and the end product is mostly 88 RON gasoline, S&P Global Platts reported earlier.
Prior to the deal with Unipec, Pertamina had a deal with Shell to process 1 million barrels/month of its Iraqi crude at the oil major’s Singapore refinery over July-December 2016.
The 1 million barrels of Basrah crude comprises Pertamina’s 10% equity stake in the West Qurna-1 block as well as some purchases from Iraq’s State Oil Marketing Organization.
Pertamina regularly uses third-party crude processing deals as Basrah crude cannot be processed in its refineries, mainly because of the Iraqi grade’s high sulphur and mercaptan content.
Due to Pertamina’s limited capability to handle the medium-heavy Iraqi crude, the company has been seen offering some of its equity Basrah barrels in the Asian spot market over the past few years. However, the CPDs are expected to provided added value to the company.
According to an assay released to term and equity lifters by SOMO in May 2015, Basrah Heavy has an API gravity of 23.55 degrees and a sulphur content of 4.2%, and Basrah Light an API of 27-30 degrees and a sulphur content of slightly more than 3% (Platts)
First LNG tanker arrives at Dominion’s Cove Point terminal
Dominion Energy’s Cove Point LNG export terminal in Maryland received its first tanker on Thursday as the company prepares to join Cheniere Energy shipping US supplies overseas.
Inspectors boarded the Maran Gas Delphi and the vessel was being moored at the facility around 3:05 pm local time, US Coast Guard spokesman Andy Kendrick said in an email. It was not clear when the vessel would depart, he said.
Data from cFlow, Platts trade flow software, show the tanker was fully laden with LNG and its last destination was a port in Nigeria.
The exact purpose of Dominion bringing in a tanker already filled with LNG was not clear, though it is common for new LNG export terminals to cool down their tanks with already produced LNG before they begin commissioning their own cargoes.
Shell, which uses a combination of its own vessels and charters, is scheduled to take Dominion’s commissioning cargoes.
The Maran Gas Delphi, as well as several other Maran Gas tankers, have been used to carry cargoes from Cheniere’s Sabine Pass terminal in Louisiana.
Cheniere became the first US exporter of LNG produced from shale gas when it launched its initial cargo in February 2016. That cargo went to Brazil. Dominion, which is set to become the second US exporter of LNG produced from shale gas, has not said where Shell plans to take its first cargo. Often, that decision is not made until vessels are preparing to leave or in transit, based on market prices and buyer needs.
Cove Point began introducing feedgas to the facility on December 5. At the time, Dominion confirmed a previous report by S&P Global Platts that Shell will offtake the LNG produced at Cove Point during the commissioning process. It also said Shell is providing the gas for liquefaction during commissioning.
Cove Point has long-term service agreements with Gail India and ST Cove Point, which is a joint venture of Japan’s Sumitomo and Tokyo Gas, to supply LNG produced from the facility. Since those agreements cover substantially all of the LNG capacity from the facility, Dominion has said it is unlikely it will be shipping spot cargoes, something Cheniere as done since starting production at Sabine Pass. (Platts)
SHIPPING
World’s Largest LNG-Fuelled Ship about to Enter the Market
South Korean shipbuilder Hyundai Heavy Industries (HHI) is about to close the year with a bang, as it gears up for the delivery of the world’s largest LNG-fuelled ship.
Namely, Hyundai Mipo Dockyard (HMD), part of the HHI Group, will deliver this month a 50,000 dwt bulk carrier with a high manganese LNG fuel tank.
The ship was ordered in 2016 and is being built for Ilshin Logistics in collaboration with steelmaker Posco. The vessel is the largest bulk carrier ever ordered to use LNG as fuel.
Once delivered, the bulker will transport limestone cargoes in the Korean coastal trade for Posco.
Lloyd’s Register (LR) and the Korean Register (KR) are providing dual classification and certification, verifying compliance with the International Gas Fuel (IGF) Code.
The new type of cryogenic steel, developed by Posco, is high in manganese and is used for the 500 m3 capacity Type ‘C’ LNG fuel tank, located on the aft mooring deck. The properties and characteristics of the high-manganese steel, as well as the required welding technology, have been proven suitable for cryogenic applications, according to LR.
HHI is making strides in the construction of LNG-powered ships and has recently signed a contract to build the world’s first LNG-fuelled aframax tanker.
In addition, the shipbuilder and LR have almost completed the design of 180,000 dwt class bulk carriers. The design development is in the process of receiving approval in principle. In addition, the shipbuilder and LR have almost completed the design of 180,000 dwt class bulk carriers. The design development is in the process of receiving approval in principle.
As disclosed by LR, this design is optimised for short to medium-haul bulk trade (i.e. Australia – Asia) and long-haul bulk trade (i.e. Brazil – Asia) service, in line with Harmonised Common Structural Rules.
To decide the optimum location and type of LNG tanks for these designs, the shipyard conducted several case studies for competitive CAPEX and OPEX.
As a result, LNG fuel tanks with Posco high manganese steel or 9% nickel steel were chosen. They will be located on the aft mooring deck because of the amount of LNG that will be required for the Australia – Asia route. For the long-haul route, a larger sized LNG storage tank can be fitted in the mid-part of the vessel.
Additionally, Woodside, Anangel, GE, LR and HHI signed a joint industry project agreement to develop an LNG-fuelled 250,000 dwt very large ore carrier operating on the Australia – Asia iron ore trade route. The HAZID analysis of this design, to verify the safety level, was recently completed with all parties in Seoul. The LNG tanks are also based on the Posco high manganese steel or 9% nickel steel design.
“We believe that HHI’s efforts can offer the possibility that will help owners comply with emission regulations with a reliable and competitive solution,” LR’s Jin-Tae Lee, Korea Chief Representative & Marine Manager, said.
“We believe that our work in creating environmentally-friendly designs is more of a mission than a choice, which will lead to a cleaner shipping industry and a greener world. We hope that the first beneficiary of this effort will be the shipping industry,” Hyung Kwan Kim, HHI’s Senior Executive Vice President, commented. (World Maritime News)
IBIA: Low Sulphur Fuel Best Solution for Global Cap
Low sulphur fuel oil is believed to be the best solution for compliance with the 0.50% sulphur limit in 2020, findings released by the International Bunker Industry Association (IBIA) show.
Half of respondents to polls on the best compliance option, put to delegates at IBIA’s Annual Convention in Singapore in November, said that low sulphur fuel oil will be the best solution, while LNG scored a much higher share of votes with 42 percent, compared to abatement technologies, with 8 percent of the votes.
Furthermore, few seem to think that as much as 1,000 vessels will be fitted with scrubbers before 2020 with most thinking it will be the mid-2020s before that number is reached.
According to the speakers from BP, ExxonMobil and Marine and Energy Consulting at the Convention, the current anticipation is that LNG will play a much smaller role than scrubbers in 2020, and that scrubber uptake will accelerate much quicker to make use of high sulphur fuel oil with scrubbers a much bigger share of the market in 2025 than LNG.
Many of the delegates at IBIA’s Annual Convention, meanwhile, seemed to have doubts about how quickly scrubbers will take off and selected LNG as the second most ideal solution in 2020 and beyond.
“Low sulphur fuel oil was the clear winner. It is nevertheless interesting how much opinion seems stacked in favour of LNG over scrubbers,” IBIA concluded. (World Maritime News)
Det Norske Veritas Becomes DNV GL’s Majority Owner
Stiftelsen Det Norske Veritas has become the majority shareholder of classification society DNV GL.
On December 8, 2017, foundations Mayfair SE and Det Norske Veritas signed an agreement for the sale of Mayfair’s 36.5% shares in DNV GL to Det Norske Veritas Holding AS (DNV Holding AS).
Until this transaction Stiftelsen Det Norske Veritas owned 63.5% of the DNV GL group through DNV Holding AS.
In 2012, Stiftelsen Det Norske Veritas and Mayfair agreed to build a quality assurance and risk management company – Germanischer Lloyd (GL) was merged with Det Norske Veritas to create DNV GL.
“Since the merger, the joint company has successfully adapted its organization and realized significant synergies. It also strengthened its position in research and innovation and moved forward with its digital transformation,” the duo said in a statement.
“The merger between DNV and GL has created significant value, and we are thrilled about the opportunity to invest in DNV GL’s long term success. 100% of the cash generated will remain within the group to support further development and positioning of DNV GL globally,” Leif-Arne Langøy, Chairman of the Board of Directors of Stiftelsen Det Norske Veritas, commented.
As explained, the DNV GL strategy, ‘Leading towards a digital, agile and efficient future’, remains unchanged. There will also be no changes to the management, organization, name or branding.
DNV GL’s headquarters for the maritime business area will remain in Hamburg. (World Maritime News)
Call for software maintenance standard for shipping
BIMCO and the international association for the marine electronics industry, CIRM (Comité International Radio-Maritime), have sent the industry’s first proposal for an industry-wide standard for software maintenance to the International Maritime Organization (IMO) for consideration. Without an industry-standard, the two bodies see an increasing risk of severe incidents on ships, delays and costs to shipowners and cyber security problems.
“We hope the entire industry will adopt these standards, to make ships safer, to prevent cyber security problems and to save money,” said Angus Frew, secretary general and CEO at BIMCO.
“The industry has been living in a world of hardware. But software has been integrated into most physical equipment on the vessels, and the systems and procedures to manage the software has not kept up with technical developments, and it creates problems,” he added.
BIMCO has seen incidents, where ships, for example, suffer complete blackouts and malfunctions in radar and other related systems, as a result of unforeseen difficulties with a software update.
The goal of the Standard on Software Maintenance of Shipboard Equipment is to make sure software updates happen in a secure and systematic way. It should increase the visibility of the software installed on board, ensure the effective planning of maintenance and ensure effective communication between the different parties involved in maintaining the software. Keeping software up to date is also necessary to minimise hacking and malware problems.
The standard requires the user to have a complete list of what software versions are currently running on the ship’s equipment, and ensures that all equipment can display the current software version. It also means that ships can do a complete roll-back to a previous software version, if an update goes wrong, which will enhance safety.
The proposed standard contains an identification of the various roles involved in maintaining software (producer, system integrator, data provider, service and shipowner), a procedural flow for maintenance and an outline of the requirements and responsibilities of the five roles.
The industry standard was made over a four-year period in collaboration with several industry leaders, such as BP Shipping, Maersk Line and Emarat Maritime.
BIMCO and CIRM would like to see the standard become an ISO-standard, to make it more robust. ISO has provisionally accepted the proposal. BIMCO expects a work group to complete the standard in 2021.
It is BIMCO’s and CIRM’s goal that everyone involved in producing and maintaining software for shipboard equipment use this standard.
“It is our hope that BIMCO members will use suppliers who use this standard and that the shipowners will adhere to it as well, for example, by ensuring that there is an updated software log on board,” said Frew. (Splash247)
S&P
India to Ratify Hong Kong Ship-Recycling Convention?
The Indian government has drafted a legislation to ratify the Hong Kong Convention on safe ship-recycling, which was adopted by the International Maritime Organization (IMO) in 2009.
The new bill is to provide for the regulation of ship recycling in a safe and environmentally sounder manner and take care of occupational health and safety risks related to workers engaged in the recycling process.
India’s Ministry of Shipping informed that the matters related to shipping are currently governed by Ship Breaking Code, 2013, as amended. The proposal to introduce the Safe and Environmentally Sound Recycling of Ships Bill, 2017, is open for comments and suggestions of stakeholders until January 7, 2018.
Under the proposal, the government would designate a national authority which is to administer, supervise and monitor all activities related to ship-recycling.
The Hong Kong Convention is to enter into force only 24 months after it is ratified by 15 states, in order to represent 40% of world merchant shipping by gross tonnage. Only six states have acceded so far, including Norway, France, Denmark, Belgium, Panama and Congo.
In September 2017, India signed a loan agreement for a project to upgrade the environment management plan at Alang-Sosiya ship recycling yards.
The total cost of the project, which is likely to be completed by 2022, will be USD 111 million, out of which USD 76 million will be provided as soft loan from Japan International Cooperation Agency (JICA).
Out of the remaining amount, USD 25 million as taxes and fees will be borne by Government of Gujarat and the balance USD 10 million will be shared by Ministry of Shipping and the Government of Gujarat.
The country earlier informed that the project would help the Alang recycling yards to comply with international safety and environmental regulations. (Splash247)
Chengxi Shipyard Wins Kamsarmax Quartet
The Chinese leasing firms are resuming their ordering spree on behalf of shipowners, the latest one being Bank of Communications Financial Leasing (BoCom).
Broker reports indicate that the bank has placed an order for four Kamsarmax bulkers with Chengxi Shipyard.
Bank of Communications Finance Leasing operates finance lease for aviation, shipping, utilities, energy equipment, and electricity fields.
The ships are scheduled to start their deliveries from late 2019, according to Asiasis.
Financial details of the deal were undisclosed.
Chengxi has 33 newbuildings on order, not including the latest order, the data from VesselsValue shows.
The ships under construction are predominantly bulkers and small dirty tankers, with deliveries spread across 2018 to 2020.
Chinese leasing firms have emerged as a major source of capital for the shipping industry over the recent period as they join the ranks of the biggest shipowners in the world.
The market has been dominated by European lenders which are turning to a more localized strategy as they work to trim down their exposure to bad shipping loans.
For example, the portfolio of ICBC Leasing, the largest Chinese leasing firm, has reached USD 10 billion in just ten years, Bill Fangmeng Guo, Executive Director of Shipping at ICBC Leasing revealed in an interview with Capital Link.
The leasing firms become the legal owners of the ships and they lease them back to their clients. However, they also have to engage in the technical and commercial management of the vessels.
Leasing financing structure has been described as a much more flexible solution than that provided by commercial banks. (World Maritime News)
Carboflotta snaps up a LPG tanker resale from Hyundai Heavy Industries
Genoa-based shipping firm Carbofin, part of Carboflotta group, has just signed a MOA for the purchase of a resale newbuilding LPG tanker from South Korean shipyard Hyundai Heavy Industries.
“We are finalizing an investment which is worth some $45m for a mid-size LPG tanker newbuilding still to be delivered by the shipyard,” Carboflotta’s chairman Enrico Filippi and CEO Enrico Telesio revealed.
The vessel, set to be renamed EnricoFermi, has a capacity of 38,000 cu m and once completed will be delivered to the Greek shipowner which signed the original order in 2015 and then sold on to Carbofin whose investment will be supported by Italian banks BPER and Banca Popolare di Sondrio.
Carboflotta group owns a fleet of six mid-size LPG tankers with capacity ranging from 17,200 to 38,400 cu m and deployed with time charters on routes in Central America. The oldest unit in the fleet, the 1996-built Solaro, is the only vessel of the group active on the spot market and is currently for sale. (Splash247)
Marnavi places new chemical tanker order at Wuchang Shipbuilding
Naples-based shipowner Marnavi has set up a joint venture with Simest aimed at investing in new parcel chemical tankers.
“We have just signed the order for a 15,000 dwt newbuilding with the delivery scheduled before the end of 2019” Marnavi’s chairman Demenico Ievoli advised.
“The investment for this order stands around $30m” the seasoned owner added.
A newly formed purpose-built ship owning company, with 45% held by Simest, has been set up for this order.
Simest is part of the public company Cassa Depositi Group that since 1991 has supported the international development of Italian business worldwide. It is a member of Edfi, the association of European Development Financial Institutions and cooperates with the world leading institutions.
As of today Marnavi owns and operates some 30 vessels serving four markets: chemical, offshore, edible products and anti-pollution services. (Splash247)