Chinalco to cut 2 mln tonnes of alumina capacity this winter
Chinalco, China’s biggest state-run aluminium producer, is cutting its alumina capacity by 2 million tonnes this winter to comply with pollution-related restrictions on heavy industry, an executive said on Wednesday. The company, formally known as Aluminum Corp of China, started to make the cutbacks at its alumina refineries in Henan and Shandong last month, vice president Lu Dongliang told Reuters. Lu was speaking on the sidelines of the China Aluminum Week conference in Fuzhou. (Reuters)
Indonesian police officer killed in shooting near Freeport mine
An Indonesian police officer was killed and a second wounded on Wednesday, after being shot in the back in an area near Freeport-McMoRan Inc’s giant Grasberg copper mine in the eastern province of Papua, a police spokesman said. The officers were patrolling an area close to where a Freeport vehicle was targeted in a shooting on Tuesday, Papua police spokesman Suryadi Diaz said in a statement. Both were taken by helicopter to a hospital in the nearby city of Timika. (Reuters)
Indonesia amends contracts with 13 coal mining companies
Indonesia has amended contracts with 13 coal mining companies, including some of the country’s biggest producers of the fossil fuel, as part of a shift towards a new mining permit system it expects to boost government revenues. Indonesia’s 2009 mining law requires companies to transfer from so-called contracts of work, long-term agreements with specific rules including on taxes, to newer special mining permits that generally follow prevailing law. (Reuters)
EU finds Chinese steel sent via Vietnam evaded tariffs
The European Union’s anti-fraud office (OLAF) said it has found Chinese steel was shipped through Vietnam to evade the bloc’s tariffs. Steelmakers are now awaiting a similar but more widespread U.S. circumvention investigation involving China and Vietnam. (Reuters)
Noble Group holds talks with stakeholders in survival bid
Embattled Noble Group, a Hong Kong commodities trader, has commenced discussions with various stakeholders regarding potential options to address the company’s capital structure and liquidity position.
The discussions focus on managing the maturity of Noble’s borrowings.
During this process, the company said it will continue to prioritise near term liquidity, and will aim to continue to operate on a normal basis.
Earlier this week it was reported that Noble Group had lost the support of another key bank, with Singapore’s DBS sellings its $60m stake in Noble’s $1.1bn revolving credit facility due in May next year. DBS has also closed some other financing to the company.
“The withdrawal by a core bank is the latest blow to Noble as it moves towards an all-but inevitable debt restructuring, battered by losses of more than $3 billion so far this year,” Bloomberg reported earlier this week. (Splash247)
Last Index Published Date: 15 NOVEMBER 2017
Baltic Exchange Dry Index 1374 -31
Baltic Exchange Capesize Index 3108 -101
Baltic Exchange Panamax Index 1320 -26
Baltic Exchange Supramax Index 858 -14
Baltic Exchange Handysize Index 637 -3
‘Anangel Glory’ 2012 180575 dwt dely Rotterdam 17/18 Nov trip via Narvik redel Hamburg $24,000 daily – Jera Trading
‘Harm’ 2011 93183 dwt dely Zhanjiang 17/19 Nov trip via East Australia redel India $11,000 daily – Jaldhi
‘Ocean Oceanus’ 2011 93100 dwt dely New Mangalore spot trip via South Africa redel China $13,500 daily – Oldendorff
‘Ocean Topaz’ 2012 92859 dwt dely Taichung spot trip via Geraldton redel China $9,000 daily – Hyundai Glovis
‘King Barley’ 2012 82177 dwt dely Flushing 20 Nov trip via Baie Comeau redel Barcelona $12,250 daily – Cargill
‘Atalanta’ 2010 82094 dwt dely Matsuura 17 Nov trip via Australia redel India $10,250 daily – cnr
‘ABY Asia’ 2017 81944 dwt dely Ijmuiden 14 Nov trip via Murmansk and Turkey redel Passero $13,500 daily – Norden
‘Naias’ 2012 81852 dwt dely CJK 14 Nov trip via NoPac redel Singapore-Japan $9,000 daily – Cargill
‘Myrto’ 2017 81011 dwt dely retro San Ciprian 11 Nov trip via USEC and Italy redel Passero $13,000 daily – United
‘Sea Venus’ 2013 80888 dwt dely Hadong spot trip via CIS redel South Korea $9,500 daily – GNS
‘Clipper Victory’ 2015 77119 dwt dely US Gulf 03/05 Dec trip Singapore-Japan $15,250 daily plus $550,000 bb – Cargill
‘Nenita’ 2006 76807 dwt dely Gibraltar 14/15 Nov trip via East or North coast South America redel Singapore-Japan $16,750 daily – Louis Dreyfus
‘Ecosand G.O.’ 2008 75239 dwt dely Rizhao prompt trip via NoPac redel Singapore-Japan $8,100 daily – BG Shipping
‘Unity’ Ausca relet 2001 74133 dwt dely US Gulf 05/10 Dec trip Singapore-Japan $14,300 daily plus $430,000 bb – Wilmar
‘Zheng Jie’ 1997 73049 dwt dely Ningde 14 Nov trip via Indonsia redel South China $6,800 daily – Lotus
‘Qing Ping Shan’ 2015 63474 dwt dely retro Marin prompt trip via EC Canada redel Turkey intention woodchips $13,000 daily – Merbulk
‘Platon’ 2011 58502 dwt dely Ghent prompt trip redel east Mediterranean intention scrap $14,500 daily – Centurion
‘Adastra’ 2002 46493 dwt dely Skaw prompt trip via Denmark redel Nemrut $12,250 daily – Merbulk
‘Vigorous’ 2013 33500 dwt dely Szcecin prompt trip redel Italy $11,500 daily – Tribulk
‘Glory Dina’ 2004 28343 dwt dely Pohang prompt trip via CIS redel China intention coal $7,300 daily – Dahua
‘Lowlands Erica’ 2007 176862 dwt dely Singapore-Japan in d/c January/March 2018 11/13 months trading redel worldwide $14,500 daily – Koch Shipping
‘Red Lily’ 2017 81600 dwt dely Japan 17/21 Nov 4/7 months trading redel worldwide $13,000 daily – South 32
Oil prices fell more than 1 percent, continuing Tuesday’s slide after the International Energy Agency cast doubts over the past few months’ narrative of tightening fuel markets. Gold prices firmed as investors awaited the October consumer inflation data from the United States for potential hints on the Federal Reserve’s monetary tightening policy. Shanghai nickel and zinc tumbled alongside steel, extending losses from the previous session, in the wake of slowing industrial production growth in China. Chicago corn slid for a third consecutive session, hitting a one-year low as harvest of the second-largest U.S. crop on record boosts global supplies. A reduction in risk appetites lifted the yen and pressured the Australian dollar, as investors awaited U.S. consumer inflation data later in the global session. (Reuters)
Warmer weather, rising non-OPEC output threaten oil market balance
Global oil demand growth looks likely to increase more slowly over the coming months, as warmer temperatures cut consumption, which may tilt the market back into surplus in the first half of next year, the International Energy Agency said on Tuesday. In its monthly oil market report, the Paris-based IEA cut its oil demand forecast by 100,000 barrels per day (bpd) for this year and next, to an estimated 1.5 million bpd in 2017 and 1.3 million bpd in 2018. (Reuters)
S.Korea’s Oct crude oil imports from Iran down 9.5 on-month
South Korea’s imports of Iranian crude oil fell 9.5 percent in October from the previous month as the Middle Eastern country cut crude and condensate exports to Asia due to production setbacks. South Korea, one of Iran’s main Asian clients, brought in 1.65 million tonnes of Iranian crude in October, or 390,675 barrels per day (bpd), customs data showed on Wednesday. That is a 9.5-percent decline from 1.83 million tonnes in September, but still up nearly 83 percent from last year. (Reuters)
LNG giant Qatar’s empty shelves pose upside risk for Asian gas prices
Gas exporting giant Qatar has all but sold out of winter supply after committing its spare output to China and South Korea, a development that could tighten Asia’s gas markets as the peak demand season bites. Doha’s bumper sales will also ring alarm bells for other regions reliant on Qatari liquefied natural gas (LNG) such as Europe and may further boost Asian spot prices, which have already surged 55 percent since September, traders said. (Reuters)
USAC receives first European gasoline imports in two weeks
Nearly 300,000 barrels of gasoline arrived in New Jersey and Rhode Island from the UK late last week, ending a two-week period in which the US Atlantic Coast did not receive any gasoline from Europe, according to US Customs data.
On November 10, the Challenge Procyon, chartered by Valero, discharged 200,753 barrels of RBOB in Providence, Rhode Island, from Pembroke, UK, where Valero owns a 270,000 b/d refinery.
That was the first European shipment of gasoline to land on the USAC since October 27, the longest period the USAC had not received any trans-Atlantic imports since S&P Global Platts started tracking US Customs data in June 2015.
On November 11, the same vessel unloaded 41,203 barrels of premium RBOB into Providence, while the Quartz delivered 55,417 of premium RBOB to New Jersey.
While USAC gasoline imports from Canada, mainly from Irving Oil’s 300,000 b/d refinery in Saint John, New Brunswick, have remained steady so far in November, European imports into the region were at 5.42 million barrels in October, the lowest monthly total since March.
Those low totals have forced suppliers to reach into their own inventories, pushing USAC gasoline stocks to 52.42 million barrels the week that ended November 3, the lowest total since December 2014, according to US Energy Information Administration data. Central Atlantic stocks, which encompasses the New York Harbor area, were 24.02 million barrels last week, the lowest total since April 2011.
But several cargoes could arrive at the USAC by the end of November, according to several traders, who cited the likely supply relief as a reason New York Harbor gasoline differentials had fallen in recent trading.
Cash RBOB was assessed Tuesday at NYMEX December RBOB plus 1.50 cents/gal, down 4.40 cents/gal from the same day last week.
Traders from the Amsterdam-Rotterdam-Antwerp trading hub and the USAC have recently described the arbitrage between both regions as open, but barrels have found better value in West Africa and the Mediterranean. (Platts)
Asian refiners hit by another round of Saudi crude term allocation cuts
At least four refining companies in Northeast and South Asia have received significant cuts in December term allocations for various Saudi Arabian crude oil grades, a move that further cements the major Persian Gulf producer’s commitment to keep OPEC production limited and support prices, market sources said Tuesday.
Three South Korean refiners have recently been informed that the companies would receive 5%-10% less December Saudi term barrels than what they had initially requested for, trade sources based in Seoul and Singapore with knowledge of the matter told S&P Global Platts.
SK Energy, the country’s biggest refiner, would receive 16,000 b/d less Saudi term barrels for loading in December, equivalent to a cut of around 10% in the monthly allocation, a Singapore-based trading source said.
The latest allocation cuts would mostly tighten December supply of Arab Extra Light and Arab Medium crude grades to South Korea, the sources added. Elsewhere, market sources in South Asia indicated that at least one state-run Indian refining company would receive allocation cuts of around 5%-6% for December-loading light and medium sour Saudi crude oil.
The sources declined to identify the Indian firms struck by the latest Saudi crude oil allocation cuts, but they said many South Asian end-users have been receiving less Saudi term volumes than their desired amount over the past several months.
In Japan, Saudi crude oil allocation cuts to Asia’s third-largest energy consumer have also been ongoing, two trading managers at Japanese companies told Platts. Market talk indicated that term allocations of December-loading Arab Medium crude could have been trimmed, although full details of the reduction in December term volumes to Japanese refiners could not immediately be ascertained.
There were a few Asian refiners spared from any supply cuts, however, with Thailand’s PTT receiving full allocation for its December Saudi crude oil term volumes, a source at the Southeast Asian firm said.
In China, some of the country’s state-run refining companies including PetroChina, were said to have received close to full December term allocation volumes as well.
Saudi Arabia’s latest term allocation cuts hardly surprised market participants as the move was in line with its fellow OPEC producer UAE’s tight December crude export outlook, while the recent spike in Middle Eastern official selling price differentials had already hinted that supply would remain limited to Asia.
Late last month, UAE’s Abu Dhabi National Oil Co. was quick to announce that the state-run company would cut its allocations for December-loading Murban crude to its customers by 15%, while those for Das Blend and Upper Zakum were reduced by 10% and 5%, respectively.
Regional sour crude traders noted that the latest round of Middle Eastern OSP hikes had also served as a precursor to another round of Saudi export cuts to Asian customers.
Earlier this month, Saudi Aramco raised the OSP differentials for its Asia bound crude grades for December by 65 cents/b for Arab Extra Light, Arab Light, Arab Medium and Arab Heavy, and raised Arab Super Light by 45 cents/b month on month.
For Arab Super Light, the December OSP differential was set at Platts Oman/Dubai average plus $4.55/b, the highest in a year, as the December 2016 OSP differential came in at exactly the same level.
ADNOC has also raised its retroactive OSPs for October loading crude, with the differentials relative to Dubai seeing a hike of 52 cents/b for the light Murban and Das Blend crude grades to premiums of $2.55/b and $2.20/b to Dubai respectively.
Reflecting the lofty monthly selling prices and tight supply into Asia, the Dubai physical crude market structure extended its uptrend, rallying to a fresh three-year high in recent weeks.
The spread between front-month cash Dubai and same-month Dubai swaps rallied to a premium of 89 cents/b on Wednesday last week, the highest since July 25, 2014 when the equivalent spread was assessed at 95 cents/b, Platts data showed.
“December supply is especially crucial because they will arrive [in Northeast Asia] by January, the peak winter [refiner] run rate season,” said a Singapore-based sour crude trader, indicating that some Asian companies could bid strongly in the Middle Eastern spot market this month to cover their short positions. (Platts)
Poland buys Iran oil as sour crude flows tighten
Iranian crude oil will soon be making its way to Poland as reduced flows of sour crudes into Europe are prompting some refiners to look outside of the region, shipping and trading sources said Tuesday.
PKN Orlen has bought a cargo of Iranian crude for November 24-25 loading dates, sources said. The Suezmax Delta Poseidon has been placed on subjects on a Kharg Island to Gdansk voyage at Worldscale 49, according to shipping fixture reports.
A source at PKN Orlen and Delta Tankers, which owns the tanker, were unavailable for comment.
Poland is heavily reliant on Russian Urals crude but the country’s two refiners are slowly beginning to diversify their crude supplies.
Russian exports from the Primorsk oil terminal, where the bulk of the Urals program usually loads, have been down sharply this month due to scheduled maintenance.
Sources said this along with reduced flows of Kurdish crude into Europe due to tensions between the Kurdistan Regional Government and Iraq, are increasing spot demand for sour crudes from the Middle East into Europe.
The last time Poland purchased Iranian crude was earlier this year, when the Vilamoura tanker discharged Iranian oil in mid-January.
In July 2016, Grupa Lotos bought spot cargoes of Iranian light crude from Iran’s National Iranian Oil Co. (NIOC).
In late October, PKN Orlen bought its first shipment of US crude, the first to Poland since the US ended its embargo on exports in December 2015.
The refiner has been diversifying its crude oil suppliers and last year it signed a contract with Saudi Aramco to receive 200,000 mt/month of crude to supply its refineries in Poland, Lithuania and the Czech Republic.
PKN also occasionally buys spot cargoes from Iraq, Azerbaijan, Kazakhstan, Nigeria and Norway. (Platts)
Navios Partners Delivers Profit in Q3
Greek owner and operator of dry bulk and container vessels Navios Maritime Partners closed the third quarter of this year with a net income of USD 9.2 million, recovering from a net loss of USD 33.9 million reported in the same period a year earlier.
EBITDA for the three-month period was USD 41 million, against an EBITDA of USD 13.4 million seen in Q3 2016.
In addition, revenue for the quarter ended September 30, 2017, stood at USD 60 million, compared to a revenue USD 50.3 million posted in the same period of 2016. Time charter revenues rose by 0.7% to USD 50.7 million in Q3 2017 from USD 50.3 million recorded in Q3 2016. As explained, this was due to the increase in revenue following the acquisition of seven vessels in 2017 and the increase in available days of the fleet.
During the quarter, Navios Partners bought and took delivery of three dry bulk vessels. The ships in question are Navios Symphony, Navios Aster and Christine B.
In August, the company completed the issuance of USD 53 million add-on to its existing Term Loan B facility. Navios Partners used the net proceeds to partially finance the acquisition of three ships.
Also during the third quarter, Navios Partners agreed to extend the duration of its existing management agreement with Navios Shipmanagement, a subsidiary of Navios Maritime Holdings, until December 31, 2022, and fix the rate for shipmanagement services of its owned fleet through December 31, 2019.
On August 29, 2017, Navios Containers closed a private placement of 10 million shares at a subscription price of USD 5 per share, resulting in gross proceeds of USD 50 million. Navios Partners invested USD 10 million and received 2 million shares. As of September 30, 2017, Navios Partners held 8 million common shares and received 39.9% of the equity of Navios Containers.
“Navios Partners is expected to generate significant cash flow, as it has no material near term debt maturities and low leverage. Consequently, we were able to renew our drybulk fleet, acquiring seven vessels and selling one vessel. This increased our fleet by 33%, on a deadweight ton basis, and reduced the average age of our vessels by 9%,” Angeliki Frangou, Chairman and Chief Executive Officer of Navios Partners, commented.
Separately, Navios Maritime Holdings informed that the company and Navios Maritime Finance II priced USD 305 million of 11.25% Senior Secured Notes due 2022. The Notes will be secured by a first priority lien on the capital stock owned by certain of the subsidiary guarantors of Navios Holdings in each of Navios Maritime Partners, Navios GP, Navios Maritime Acquisition Corporation, Navios South American Logistics and Navios Maritime Containers Inc.
The net proceeds of the offering will be used to complete a cash tender offer for any and all of its outstanding 8 1⁄8% Senior Notes due 2019 and to redeem any and all such notes that are not purchased in the tender offer after all conditions to the tender offer are satisfied or waived, with any remaining proceeds to be used for general corporate purposes, according to Navios Maritime Holdings. (World Maritime News)
Maersk: Shipping Must Raise Its Game to Cut Pollution
The shipping industry must take responsibility for its fair share of carbon emissions in order to tackle climate change, according to global transportation conglomerate A.P. Moller – Maersk.
“Raising the ambition for global regulation remains crucial to ensure shipping’s contribution to reach the Paris Agreement’s goal of staying below 2°C temperature rise,” John Kornerup Bang, Chief Advisor on Climate Change at Maersk said.
The maritime industry emitted close to 1,000 million tonnes of CO2 in 2012, representing about 2.2% of global CO2 emissions. Depending on future development, this could rise to 15% by 2050, according to a 2016 study by the Danish Shipowner’s Association (DSA) and UCL Energy Institute.
As highlighted by Bang, the 23rd session of the UN Climate Change Conference (COP23) taking place from 6-17 November in Bonn, Germany, represents another clear-cut opportunity to take negotiations further and raise the bar for the commitment of shipping in 2018 and beyond.
Namely, under the aegis of the main conference, the ‘Ambition 1.5°C: Global Shipping’s Action Plan’ summit took place on November 13.
Based on the projections from the International Maritime Organisation (IMO), the industry can improve efficiency by up to 75% through operational measures and current technology.
However, to make this happen, a higher level of ambition is needed than the one outlined in the current roadmap for 2017–2023, based on both technical, operational and economic measures – without punishing early movers and with clear incentives to develop new solutions.
“As a company, we are reaching a point where it will be more and more challenging to drive significant reductions on our own. Efficiency measures are drying out and it’s an industry challenge to drive the needed innovation in new propulsion technologies. More than ever, we need global regulation to ensure a level playing field and a transition with the biggest possible environmental impact,” Bang highlighted.
“The hopes and demands of the shipping industry for a strengthened mandate of the IMO were not fulfilled in Paris; Bonn offers us a new opportunity to accelerate what MAN Diesel & Turbo calls the ‘Maritime Energy Transition’, the move to cleaner technology within our industry. Ultimately, uniform environmental standards must be established at international level – a strong IMO as an international regulator is, therefore, essential,” Uwe Lauber, CEO of MAN Diesel & Turbo said while speaking at the event.
“MAN Diesel & Turbo wants to expand the debate on how to reach COP 21’s targets. We want to engage with all stakeholders – whether the general public, NGOs, shipowners or classification societies – to see what solutions are already in place or required. Consequently, I am heartened by what I have heard today in Bonn where we have made significant progress, and am confident that our efforts here will ultimately bear fruit,” Gunnar Stiesch – Senior Vice President, MAN Diesel & Turbo said.
Stemming from the summit’s proceedings, a briefing document will be delivered to UNFCCC delegates, providing a summary of the main challenges and opportunities offered by the decarbonisation of the shipping industry, the ambitious approaches agreed, and a copy of a draft action (World Maritime News)
Bunker fuel sulphur cap will require more exports, investments
Compliance with the International Maritime Organization’s more stringent bunker fuel requirements from 2020 could require more exports to balance supply as well as investment in sulphur plants, according to delegates at the World Refining Association conference in Athens Tuesday.
The UN’s IMO will impose a global 0.5% cap on marine fuel sulphur emissions from 2020, down from the current 3.5% global limit.
A cap of 0.1% in emission control areas in Northwest Europe and North America has been in place since the start of 2015.
Most shipowners were expected to respond to the 2020 cap by switching from burning fuel oil to a distillate-based fuel.
Others plan to install scrubbers that allow them to continue burning fuel oil while complying with the limit, and interest has also been growing in alternative bunker fuels like LNG.
The IMO expects an increase of refining capacity for all refining processes by 2020 which will enable refineries to produce the maximum amount of compliant fuels.
Crude distillation capacity was expected to grow 8%, coking by 35% and hydrocracking by 37% from the 2012 level, meaning that “in all scenarios, the refinery sector has the capability of producing sufficient quantities of marine fuels” with sulphur content of 0.50% or less and 0.10% or less “while also meeting demand for non-marine fuels”.
However, “this maximum amount can only be produced if the crude slate is sweeter than in the base case, especially for Asia,” IMO’s head of air pollution and energy efficiency, Edmund Hughes, said.
A study the IMO commissioned on whether or not there would be enough 0.5% sulphur fuel available for the shipping industry by 2020 has also assumed that all units have sufficient sulphur plant capacity. However, “if this assumption is not accurate”, refineries will need to expand the capacity of their sulphur plants to meet the 2020 demand, according to Hughes.
But there is uncertainty around new investment decisions in both the refining and shipping industries, according to European refining industry body Concawe’s John Cooper, who said “there are still many unanswered questions”.
For refineries that are not sufficiently upgraded, “we are talking about big money”, Repsol’s head of refining, Francisco Vazquez, said, adding Repsol’s Spanish refineries had been upgraded and the yield of fuel oil was close to zero. “We have five cokers in four refineries,” he said.
For those that do not have sufficient conversion capacity, one short-term solution will be blending, but in the long term there will be a need for additional investment, Vazquez said.
A $20-$25/mt lower price for fuel oil compared with crude would determine future investments, according to BAPCO board director Dawood Nassif.
Bahrain’s refineries produce 15%-16% fuel oil.
“It is not a problem,” said a delegate from a North European refinery.
“High sulphur fuel oil will be very cheap but gasoil will increase. That will give incentive to refiners to comply with the fuel specs.”
But while the global balance might be sufficient, “you need to have it in the right time and the right place,” Repsol’s director of refining said.
According to the IMO, there might be a need to export from the Middle East, Europe and Latin America fuel with less than 0.5% sulphur “if supply and demand is to be balanced in all regions”.
But as John Cooper from Concawe said, Europe was already importing 30% of its diesel, so exporting would exacerbate the structurally short distillate market. “There will be regional imbalances and it will take time to sort it,” he said.
For the IMO’s Hughes, exports would provide further opportunity for the product tankers market.
Meanwhile shipping companies like Maersk, which have pledged to be ready and compliant by 2020, count on the availability of enough compliant fuel.
Another challenge for them is general compliance. “It is a huge commercial threat if others are non-compliant,” said Dea Forchhammer from Maersk.
According to the IMO’s Hughes, port authorities were looking to use drones to analyze smoke stacks.
Hughes was keen to dispel the idea that the new sulphur limit can be scrapped. “To revoke it will be seen as pretty damaging to reputation,” he said. (Platts)
TORM Buys Six MR Resale Tankers
Copenhagen-based shipping company TORM purchased six MR resale vessels for a total of USD 185 million during the third quarter of this year.
As informed, the first transaction included four MR resale vessels from Guangzhou Shipyard International Company Limited (GSI) with expected delivery in 2019. The second transaction included two MR resale vessels from Hyundai Mipo.
These two vessels, TORM Sovereign and TORM Supreme, were delivered during the third quarter of 2017.
Each featuring 50,000 dwt, the tankers were purchased from Hong Kong-based Cido Shipping at a price of USD 32.5 million apiece, and their current market value stands at USD 33.8 million, data provided by VesselsValue shows.
TORM said that it has secured financing for all six vessels.
In addition to the vessel acquisitions, TORM has sold TORM Fox, a 2005-built Handysize vessel.
Following the balance sheet date, TORM has also entered into an agreement to sell TORM Rhone, a 2000-built Handysize vessel. The vessel is expected to be delivered to the new owner in Q4 2017/Q1 2018.
In a separate announcement, TORM revealed plans to file a registration statement with the U.S. Securities and Exchange Commission later today in order to list its shares on the Nasdaq Stock Market in New York, which TORM expects to complete before the end of 2017.
Following the listing, TORM’s Class A common shares will be listed for trading on both Nasdaq Copenhagen under the symbol “TRMD A” and Nasdaq New York under the symbol “TRMD”.
“The purpose of a dual listing is to provide our investors with the ability to trade their Class A common shares on a USD-denominated exchange and to improve the liquidity in TORM’s Class A common shares over time,” the company said.
“TORM believes that a dual listing will attract further investor interest and provide stronger visibility towards an international investor community, which will strengthen TORM’s strategic and financial flexibility. No new TORM securities will be issued in connection with the direct share listing on Nasdaq New York.”
During the third quarter of this year, TORM’s EBITDA was USD 37 million, down from last year’s USD 40 million reported in Q3. The result before tax for the third quarter of 2017 was a loss of USD 4 million, which included an impairment of USD 3 million from a vessel held-for-sale.
Product tanker freight rates started out at weak levels in general; however, by the end of August the market began to recover. TORM explained that the market improvement was mainly driven by increased demand for transpacific voyages, resulting in average TCE earnings of USD/day 14,290 for the company’s product tanker fleet.
“Towards the end of the quarter, the market was affected by the hurricane Harvey and refinery disruptions in Mexico which briefly lifted Atlantic MR rates and had an even more sustained effect on Far East MR rates with increasing transport distances towards the Americas. The disruption to the refinery system at the US Gulf Coast has accelerated the draws on inventories in the western markets bringing stocks closer to levels which can facilitate increased arbitrage trades,” TORM’s Executive Director Jacob Meldgaard said.
In addition to the 72 owned product tankers, TORM had chartered-in five product tankers. The company has eight newbuildings on order: four LR2 vessels with expected delivery in the first half of 2018 and four MR resale vessels with expected delivery in 2019. (World Maritime News)