DRY
Vale delays sale of stake in New Caledonia nickel mine
Vale SA has decided to postpone the sale of a stake in its New Caledonia nickel mine after the world’s largest iron ore producer decided initial bids were too low, two people with knowledge of the matter said. The sale may be delayed for up to a year as the company anticipates a rebound in nickel prices, the sources said, requesting anonymity because they were not authorized to speak publicly on the matter. (Reuters)
Metal recyclers prepare for electric car revolution
Recycling companies are honing processes to extract metals from old batteries more cheaply and efficiently so they can capitalise on an expected shortfall in materials such as cobalt and lithium when sales of electric cars take off. The main obstacle recyclers face now is a shortage of spent batteries to recycle to make their technology cost-effective, but those at the forefront of the industry are confident the supply, and profits, will come. (Reuters)
Farmers seen holding back the second-highest ever US corn crop
Despite huge corn stocks, cash prices for US corn has been supported by farmers holding back the second-highest US corn crop, and limiting its export, sources said.
US farmers come from a record corn harvest — 384.78 million mt in the 2016/17 marketing year — and now they are finishing the second-highest ever corn harvest, estimated at 370.3 million mt, US Department of Agriculture data showed on its latest World Agricultural Supply and Demand Estimates report.
It is estimated by some analysts that 65%-75% of the current crop is still in farmers’ possession, on bins, their warehouses, plastic tube silos, or on the ground covered with plastic, sources said.
The US corn export sales are 3% behind the pace needed to hit the USDA target, an analyst from INTL FcStone said. Low prices are not stimulating sales by farmers and that is limiting the movement of grain to the export pipeline.
Farmers are waiting for better cash corn prices to reach levels around their break-even point, which were expected to be at $3.80/bushel, but now, with record yields, some analysts are talking about $3.60/bu or lower, sources said.
It will be difficult to see a rally in CBOT corn futures as non-commercial investors have a large net bearish position, but basis — premiums — are doing its work, firming every day, a source added.
As soon as the corn users run out of their inventories and South American corn is exhausted, they will return to buying US corn, and prices should rise, which will encourage farmers to sell, a market analyst said. The time frame for that is expected be between late December and early July, the analyst said.
Corn is the primary feedstock for ethanol production in the US and is the main competitor for dried distillers grains. (Platts)
BALTIC INDEX
Last Index Published Date: 20 NOVEMBER 2017
Baltic Exchange Dry Index 1385 +14
Baltic Exchange Capesize Index 3214 +61
Baltic Exchange Panamax Index 1280 -5
Baltic Exchange Supramax Index 850 +5
Baltic Exchange Handysize Index 628 -2
TIMECHARTER
‘Mineral Hokkaido ‘ 2008 180159 dwt dely Kure spot trip via Australia or Pacific redel South Korea $20,750 daily – cnr – <fixed 17/11>
‘Stella Naomi’ 2016 180000 dwt dely Flushing redel South Korea – <should read redel Cape Passero amends from 17/11 report>
‘Paolo Bottiglieri’ 2010 93310 dwt dely retro Dahej 14 Nov trip via EC South America redel Singapore-Japan $13,000 daily – cnr
‘Iolcos Dignity’ 2012 87376 dwt dely Seki Saki prompt trip via Australia redel India $11,500 daily – cnr
‘Spring Aeolian’ 2012 83478 dwt dely EC South America trip Skaw-Gibraltar with grains $13,000 daily plus $230,000 bb – Cargill
‘GB Corrado’ 2008 77061 dwt dely Machong 18 Nov trip via Australia redel Japan $9,500 daily – NS United
‘Bravery’ 2004 76606 dwt dely Tieshan 19/21 Nov trip via South Australia with grains redel Singapore-Japan $10,000 daily – Bunge
‘Palma Bulker’ 2009 75843 dwt dely CJK 20 Nov trip via NoPac with petcoke redel Singapore-Japan $10,000 daily – Norden
‘Fortune Daisy’ 2011 74979 dwt dely Hamburg 25/30 Nov trip via Baltic redel Saudi Red Sea intention grains $12,250 daily + $310,000 redelivery bonus – Langlois
‘Feng Hui Hai’ 2017 63260 dwt dely WC India prompt trip redel China intention salt $12,000 daily – Norden
‘Meteora’ 2007 58480 dwt dely Melbourne trip redel China intention grains $9,250 daily + $175,000 bb – Fednav
‘GDF Suez Ghent’ 2011 58110 dwt dely Canakkale prompt trip via Black Sea redel Singapore-Japan $15,000 daily + $75,000 ballast bonus – Meadway Shipping Singapore
‘Dai Shan hai’ 2010 56945 dwt dely Mundra prompt trip redel China intention salt $9,500 daily – cnr
‘Vega Lea’ 2010 53716 dwt dely Kelang 22 Nov trip redel Vietnam $9,750 daily – cnr
‘Spar Taurus’ 2005 53195 dwt dely Singapore prompt trip via west Australia redel China intention iron ore $8,750 daily – Transpower
‘Kun Yuan ‘ 2012 47685 dwt dely Vietnam prompt trip via Indonesia redel S China approx. $6,000 daily – ESM
‘Cielo di Dublino’ 2011 37064 dwt dely Nador prompt trip redel West Africa intention fertilizer $10,750 daily – cnr
COMMODITY NEWS
Oil markets were tepid as traders were reluctant to take on big new positions ahead of an OPEC meeting at the end of the month, when the producer club is expected to decide whether to continue output cuts aimed at propping up prices. Gold prices dipped early on a stronger U.S. dollar, but remained close to a one-month high hit in the previous session on uncertainty over progress on a potential overhaul of the U.S. tax code. London copper was little changed after a report showed China’s property sector, a major metals consumer, remained resilient in October but a stronger dollar capped gains. Chicago wheat futures slid after two sessions of gains with prices weighed down by ample world supplies and stiff competition for U.S. exporters. The euro hit a two-month low against the yen, as German Chancellor Angela Merkel’s efforts to form a three-way coalition government failed, stoking political uncertainty in the euro zone’s largest economy. (Reuters)
TANKERS
As Venezuela pumps below OPEC target, oil rivals begin filling gap
As Venezuela’s dilapidated energy sector struggles to pump enough crude oil to meet the country’s OPEC output target, rival producers within the exporters group have started to plug the gap, OPEC and industry sources said. The South American country’s oil output hit a 28-year low in October as state-owned oil giant PDVSA struggled to find the funds to drill wells, maintain oilfields and keep pipelines and ports working. (Reuters)
Keystone pipeline spill pushes oil higher, fuels TransCanada opponents
A major oil spill on the Keystone pipeline in South Dakota helped push U.S. crude prices higher on Friday, while fuelling opposition to another pipeline project by owner TransCanada Corp that faces a crunch decision in Nebraska next week. The climb in U.S crude futures and slide in Canadian heavy crude prices, as well as TransCanada Corp shares, came the day after the 5,000 barrel spill, tied for this year’s largest pipeline leak in the United States. (Reuters)
Indian state oil firms betting on natural gas as next big thing
India’s state oil refiners are planning an aggressive push into natural gas in coming years to meet Prime Minister Narendra Modi’s goal of making the fuel a bigger part of the country’s energy mix. State-owned oil companies – Indian Oil, Bharat Petroleum and Hindustan Petroleum – are planning to raise gas contributions to between 5 and 15 percent of their incomes over the next few years, up from nearly none now, company executives said. (Reuters)
Middle East, US crude oil curbs Indian appetite for African supplies
India’s imports of African crude oil in October plunged to their lowest in over four years, with the world’s No.3 oil consumer increasingly turning to cheaper supplies from the United States and heavier Middle Eastern grades, ship tracking data showed. U.S. crude production has soared more than 14 percent since mid-2016 to 9.65 million barrels per day (bpd), altering trade routes as its relatively cheap and light grades become a viable import option for Asian refiners. (Reuters)
Nigeria’s Akpo to load three 1-mil barrel cargoes in January, unchanged from December
Nigeria’s naphtha-rich Akpo crude is set to load three cargoes of 1 million barrels each in January, the same volume that will load in December, according to a copy of the program seen by S&P Global Platts on Friday.
Total loadings of the grade will total 3 million barrels. Average daily loadings are set to remain the same as December at 96,774 b/d.
The Akpo grade, produced 124 miles offshore Nigeria, is classified as a light sweet crude with low acid content, with an API of 45.98 and a sulfur content of 0.06%. Total holds a 24% stake in the field, while CNOOC holds 45%, Petrobras 16%, NNPC 10% and Sapetro 5%. (Platts)
Coral Energy Brings First LNG Cargo to Northern Finland
LNG tanker Coral Energy, operated by Scandinavian company Skangas, delivered the first shipload of liquefied natural gas to Tornio, Finland, on November 19.
The cargo was shipped to the Manga LNG natural gas import terminal in Röyttä Harbor, Tornio, a joint venture of the industrial companies Outokumpu and SSAB Europe, the energy company EPV Energy and Skangas.
“It’s a historic moment to receive the first LNG shipment to Northern Finland. We’re strengthening Finland’s energy independence and our position as a leading LNG player in the Nordic countries,” Kimmo Rahkamo, Skangas CEO, said.
Once completed in summer 2018, the import terminal will be the largest LNG terminal in the Nordic countries and the second LNG terminal in Finland, according to Skangas.
The terminal will serve the entire Bay of Bothnia region as well as industrial and mining operators, maritime transport and heavy-duty road transport in Northern Finland, Northern Sweden and Northern Norway.
Wärtsilä, the company responsible for construction delivery, is now preparing the terminal for commissioning. Commercial deliveries are expected to begin in summer 2018. (World Maritime News)
SHIPPING
Drewry: Crude Tanker Rates to Further Drop in 2018
Following a sharp decline in crude tanker freight rates seen during 2017, the rates are set to further drop in 2018 amid an expected slowdown in China’s crude stocking activity, shipping consultancy Drewry said.
Although tonnage supply growth in the crude tanker market is expected to come down to 3.2% in 2018 after surging by close to 6% each year in 2016 and 2017, this will not be enough to push tonnage utilisation rates higher as demand growth is expected to be sluggish.
The rates will continue to drop next year on account of a slowdown in crude oil trade growth as global oil demand growth is set to fall to 1.4 mbpd in 2018 from 1.6 mbpd in 2017. In addition to this, a likely slowdown in China’s stocking activity poses a big risk to tonnage demand in the crude tanker market.
China’s stocking activity, which remained one of the leading factors behind the strong growth in the crude oil trade over the last two years, may fall significantly in 2018.
According to the IEA’s data on China’s implied stock changes, the country should have accumulated close to 520 million barrels since 2015, well above the total special petroleum reserve (SPR) capacity that was supposed to fully come online by 2020. A sharp decline in stocking activity in the third quarter of this year to 0.5 mbpd from 1.2 mbpd in the second quarter suggests that a significant decrease in the inventory build-up by China could be witnessed in 2018.
“We expect China’s stocking activity to decline to 0.25 mbpd in 2018 from an average 0.75 mbpd in 2017, curbing global trade growth,” Rajesh Verma, Drewry’s lead analyst for tanker shipping, said.
The anticipated decline, added to a slowdown in worldwide oil demand, “will keep global crude oil trade growth modest in 2018, which in turn will keep rates under pressure despite some slowdown in fleet growth,” Verma added. (World Maritime News)
Star Bulk Carriers Slashes Loss
Greece-based dry bulk shipping firm Star Bulk Carriers managed to cut its net loss for the quarter ended September 30 to USD 7.4 million from a net loss of USD 39.4 million seen in the same period in 2016.
The company informed that its total net voyage revenues for the quarter were up at USD 63 million, compared to USD 43.7 million reported a year earlier, mainly due to the rise in charterhire rates during the third quarter of 2017.
TCE rate climbed by 40% to USD 9,619 from USD 6,885 in the third quarter. A slight increase in the average number of vessels in Star Bulk’s fleet during the third period also contributed to stronger voyage revenues.
Operating income for the three months was USD 4.9 million, against an operating loss of USD 30.2 million seen in the third quarter of 2016.
In September 2017, the company entered into an agreement to sell the vessel Star Vanessa, which was delivered to its new owners on November 1, 2017. Additionally, in late October Star Bulk agreed to acquire Star Triumph, a Capesize vessel with carrying capacity of 176,343 dwt. The 2004-built ship is expected to be delivered in December.
Furthermore, in early November the company closed a public offering of USD 50 million aggregate principal amount of senior unsecured notes due 2022. The proceeds from the sale will be used to redeem in full Star Bulk’s currently outstanding 8.00% Senior Notes which mature in November 2019.
For the nine months ended September 30, 2017, net loss was USD 33.7 million, compared to a net loss of USD 121.1 million reported in the same period a year earlier.
Total net voyage revenues were USD 174.8 million, compared to USD 105.2 million for the first nine months of 2016, as the charter hire rates during the period jumped by 64%.
Operating income was USD 1.6 million, against an operating loss of USD 85.9 million seen in the nine months ended September 30, 2016. (World Maritime News)
Singapore Charges Bunker Supplier, Staff with Cheating
Singapore’s bunkering company, and three of its executives, have been charged with cheating and criminal breach as part of the country’s strict measures on deliveries of bunkering fuel.
The company, Vermont Bunkering, its directors Poh Fu Tek and Koh Seng Lee, and the former bunker manager Lee Kok Leong, were charged on November 16, 2017, according to Singapore’s Corrupt Practices Investigation Bureau (CPIB).
CPIB said that the company was in breach of trust offences under the Penal Code, including 150 counts of engaging in a conspiracy to cheat customers by delivering invoices indicating a higher quantity of marine fuel had been delivered, as well as one count of engaging in a conspiracy to commit criminal breach of trust by dishonestly misappropriating approximately 250 metric tons of marine fuel oil entrusted to Vermont Bunkering.
CPIB informed that, through the alleged fraudulent transactions, Vermont Bunkering had induced its customers to make excess payments totaling over USD 8 million.
In addition, Vermont Bunkering and Poh Fu Tek were charged with 18 counts of abetment by engaging in a conspiracy to disguise property representing benefits from criminal conduct. This was done using invoices falsely purporting that various quantities of fuel oil had been sold to Vermont Bunkering.
In connection with this case, Lee Kok Leong, together with former cargo officers of Vermont Bunkering Lee Peck Yong and Loh Cheok San, were each charged in court on 10 October 2017 with one count of criminal conspiracy to commit cheating by deceiving Vermont Bunkering into paying them even larger commissions than the sum being used to facilitate the illegal marine fuel oil buy-back transactions.
CPIB said this was the first time that a company would be prosecuted for offences under the Act. If convicted, an individual faces a maximum fine of USD 500,000, or up to 10 years prison, or both, while a company faces a fine up to USD 1 million.
Singapore’s Maritime and Port Authority (MPA) revoked the bunker supplier and bunker craft operator licences of Vermont Bunkering in late April 2016.
MPA’s checks conducted on the company in 2016 revealed discrepancies and wrongful declarations in the records kept on board bunker tankers. There were also separate incidences of transfers of bunkers between bunker tankers that were conducted without MPA’s approval. (World Maritime News)
Diana Containerships Slashes Q3 Loss
Greek container shipping company Diana Containerships has managed to trim its USD 126.8 million net loss reported in the third quarter of 2016, reducing it to USD 8.7 million in the third quarter of this year.
The loss for the third quarter of 2016 reflected the result of impairment charges for seven of the company’s vessels.
Time charter revenues stood at USD 6.7 million for the third quarter of 2017, compared to USD 8 million for the same period of 2016, mainly due to the sale of the vessels Angeles in November 2016 and Doukato in June 2017.
This decrease was offset by higher revenues driven by the rise in the company’s fleet utilization and the decrease of off-hire days in the third quarter of 2017.
For the nine-month period ending September, the company managed to return to the black with a net income of USD 20.4 million, compared to a net loss of USD 140.6 million for the same period of 2016.
The net income reflected a gain worth USD 42.2 million from a debt write-off, arising from the settlement agreement with respect to the secured loan facility with the Royal Bank of Scotland plc (RBS), which was signed on June 30, 2017.
Time charter revenues, net of prepaid charter revenue amortization, for the nine months ended September 30, 2017, amounted to USD 16 million, compared to USD 27.7 million for the same period of 2016.
As of October 5, 2017 the company owns and operates eleven container vessels, 6 Post-Panamax and 5 Panamax ships. (World Maritime News)
Weak Tanker Rates Push Sovcomflot to Red
Russian shipping company PAO Sovcomflot (SCF Group) ended the first nine months of 2017 in loss as tanker spot market freight rates reached their lowest levels of late.
“This year has proven to be a very challenging period for the tanker industry and the situation now faced by many conventional tanker shipowners is especially severe,” Sergey Frank, President and CEO of PAO Sovcomflot, said.
An over-supply of tonnage and reduced demand, resulting from oil capacity cut-backs led by OPEC, have resulted in low freight rates over a sustained period which have weighed upon the earnings of all participants in the tanker shipping industry.
“With tanker freight rates in some segments of the spot market declining by more than 50 per cent year-on-year, Sovcomflot’s results have not been immune from the earnings weakness affecting our industry,” Frank added.
In the nine-month period ended September 30, the company’s net loss stood at USD 6.8 million, against a net profit of USD 218.1 million reported in the first nine months of 2016.
Gross revenue for the period was slightly up at USD 1.06 billion, compared to a revenue of USD 1.03 reported a year earlier, representing a rise of 2.1 percent.
For the quarter ended September 30, the shipping firm witnessed a net loss of USD 21.9 million, against a net profit of USD 52.1 million reported in the same three-month period in 2016. The company’s revenue for the period USD 350.4 million from USD 359.1 million seen a year earlier.
While the rates impacted adversely upon the earnings of the group’s conventional tanker fleet over 2017, a continued growth and resilience in SCF’s offshore and gas fleets provided the company with a much needed relief.
Despite the drop in tanker rates, Sovcomflot continued with its core strategy of developing its specialised offshore and gas transportation operations over 2017. The company’s offshore and harsh environment business segment was “the stand-out performer,” with nine-month TCE revenue and operating profits both up over 50 percent.
Looking ahead into 2018, Sovcomflot informed that it anticipates a soft freight rate environment to remain in the conventional tanker sectors, whilst the company’s industrial shipping model will remain a source of strength and balance. (World Maritime News)
S&P
Owners seeing greater value in older crude tankers
The Japanese controlled aframax Singapore Voyager, a 14-year-old Namura-built tanker, saw up to eight possible buyers come to inspect the ship in recent days, the majority of whom were Greek. In the end, Clarkson Research reports Greece’s PrimeBulk snatched the ship, paying Japanese owner MMS $10.4m.
Clarkson noted in its most recent weekly report that this was the third Japanese aframax sold in as many months, though a slight uptick price-wise with the previous pair notching $10m each.
“It is clear that owners are starting to see value in older crude tankers,” Clarkson noted. (Splash247)