Adani hopes for govt coal mine loan fade after Australian election
India’s Adani Enterprises Ltd faces a likely block on a A$900 million ($684 million) government loan to help build a giant coal mine in Australia, with the left-leaning Labor Party on track for re-election in a state poll. Queensland state premier Anastacia Palaszczuk, who originally supported Adani’s application for the federally funded loan to build a rail coal haulage line, said three weeks ago her government would veto the concessional loan. (Reuters)
EU set for large sugar crop as liberalised market starts
The European Union is set for a large sugar beet crop this winter, the first harvest in the bloc’s newly deregulated sugar market, industry experts said on Friday. From October, EU farmers became free to grow as much sugar beet as they want and refiners allowed to export sugar globally after decades of restrictive EU output quotas and export limits. (Reuters)
Russian grains exports to Sudan will reach 1 million mt
Russia will significantly increase its grains exports to Sudan, President Vladimir Putin said Thursday during negotiations between the government and Sudan’s President Omar Bashir, according to the Russian Ministry of Agriculture.
“By the end of this marketing year Russia will export to Sudan up to 1 million mt of grains,” Putin was quoted as saying.
At the moment the main commodity exported to Sudan from Russia is wheat. The countries plan to increase wheat exports, as well as those of corn and barley.
At the moment Sudan is one of the 10 biggest importers of Russian grains. In the 2017-18 marketing year Sudan imported around 635,000 mt of grains as of this Tuesday, up 282,000 mt in comparison with the 2016-17 marketing year. (Platts)
Last Index Published Date: 27 NOVEMBER 2017
Baltic Exchange Dry Index 1477 +19
Baltic Exchange Capesize Index 3540 +87
Baltic Exchange Panamax Index 1299 +4
Baltic Exchange Supramax Index 923 +9
Baltic Exchange Handysize Index 619 -1
‘Figalia Prudence’ 2012 81498 dwt dely EC South America 09 Dec trip redel Singapore-Japan $14,300 daily plus $430,000 bb – ADMI
‘Tinos’ 2011 81391 dwt dely EC South America 20/30 Dec trip redel South East Asia $14,300 daily plus $430,000 bb – Norden
‘Ismene’ 2013 77901 dwt dely Rotterdam 28 Nov trip via Baltic and East Med redel Cape Passero $13,300 daily – ACB
‘Lowland Patrasche’ 2013 58105 dwt dely USEC early Dec trip redel E Med $18,500 daily – Bulk Trading
‘Genco Ardennes’ 2009 57970 dwt dely US Gulf prompt trip redel South Brazil approx $16,000 daily – Centurion
‘Union Explorer’ 2011 57292 dwt dely Cochin 22 Nov trip via Iran redel China $10,000 daily – Noble Miracle
‘Heilan Bright’ 2011 56800 dwt dely Machong 30 Nov/01 Dec trip redel WC India $9,500 daily – Dooyang
‘Hai Chang’ 2014 37595 dwt dely Canakkale prompt trip via Black Sea redel Tampa-Vera Cruz first 45 days $7,500 daily balance $9,000 daily – Western Bulk Carriers
‘Ocean Star’ 2007 32754 dwt dely Campha prompt trip via Vietnam redel N China intention clinker $8,100 daily – Chun An
‘Horizon’ 2007 30192 dwt dely Tunisia prompt trip via Black Sea redel Egypt Mediterranean intention grains $9,000 daily – cnr
‘Norfolk ‘ 2002 164218 dwt dely CJK 26 Nov/10 Dec 21/24 months trading redel worldwide $13,250 daily – SwissMarine – <fixed 23/11>
‘Mandarin Dalian’ 2010 56605 dwt dely Lianyungang 28 Nov 4/6 months trading redel worldwide $9,500 daily – Oldendorff
U.S. oil prices dipped, easing from two-year highs on the prospect of increased U.S. output, although global markets were slightly better supported by expectations an OPEC-led supply cut would be extended. Gold prices crept up as the dollar held close to a two-month low hit in the previous session, with investors noting the U.S. Federal Reserve’s cautious view of inflation. London nickel led metals lower, as investors cut their exposure to risky assets as Beijing steps up a crackdown on shadow banking and other riskier forms of financing. Chicago wheat lost more ground, falling for a second session as abundant global supplies make it hard for U.S. exporters to win business. The euro hit a two-month high versus the dollar and held firm against other major currencies thanks to strong German business confidence and reduced anxiety about political instability in Europe’s biggest economy. (Reuters)
Saudi Aramco, SABIC plan to build $20 bln oil-to-chemicals complex
State oil giant Saudi Aramco and petrochemical producer Saudi Basic Industries Corp (SABIC) signed a preliminary deal on Sunday to build a $20 billion complex to convert crude oil to chemicals. The project, which the partners said would be the largest crude-to-chemicals facility in the world and the first in the kingdom, are part of the Saudi government’s effort to diversify the economy beyond exporting crude. (Reuters)
Maduro taps major general to lead Venezuela’s deteriorating oil industry
Venezuelan President Nicolas Maduro on Sunday tapped a National Guard major general to lead state oil company PDVSA and the Oil Ministry as the OPEC member labors under near 30-year lows in oil production. Industry analysts and sources said the surprise appointment of Manuel Quevedo, a former housing minister with no known energy experience, was a bad omen for the country’s already deteriorated oil industry. (Reuters)
Russia remains China’s top oil supplier for eighth month
Russia held its position as China’s top crude oil supplier for the eighth month in a row in October, customs data showed on Friday. Shipments from Russia in October hit 4.649 million tonnes, or around 1.095 million barrels per day (bpd), according to the detailed breakdown of commodity trade data released by China’s General Administration of Customs. That was 1.9-percent lower than a year earlier and off the record in September at 1.545 million bpd. (Reuters)
A BP North Sea field to test U.S. policy on Iran
A small gas field on the edge of the British North Sea could become a litmus test for U.S. policy towards Iran. London-based BP this week agreed to sell to North Sea producer Serica Energy three fields in the ageing offshore basin, including the Rhum field which is co-owned by a subsidiary of Iran’s national oil company. (Reuters)
MSI: Bulker Spot Market Set for New Year Fall
The dry bulk market, which posted more positive freight rates in October, is set to plummet by January 2018 with the largest drop expected to come from Capesize earnings.
According to Maritime Strategies International, iron ore imports to China remain the strongest driving factor despite the downside risks amid Chinese government-enforced cuts in steel production.
The most recent steel data available show a slowdown from the very high production levels of the third quarter, but there is still robust demand for tonnage for ore imports.
The contradiction of weaker steel output and stronger ore imports is partly explained by lower domestic ore output: September was the worst month for ore production since May with a 13% drop since the peak in June.
“This has been a key tenet supporting MSI’s forecast of stronger freight rates towards the end of this year and is an indication of Chinese steel manufacturers’ increasing preference for higher quality iron ore found in Australia and Brazil,” Will Tooth, MSI Dry Bulk Analyst, said.
“MSI expects that the Chinese government’s focus on pollution will see even greater shifts away from the use of domestic ore with a lower iron content, due to the greater emissions produced,” Tooth added.
However, MSI forecasts a drop in spot earnings by January next year for all size categories with largest drop expected to come from Capesize earnings, which is set to be at USD 12,700/day in January, representing a 36% decline from October’s average.
Further compounding a weaker market in January, MSI forecasts an annualised fleet growth of 2.5% over the next three months. This relatively strong growth mainly comes from the large increase in deliveries that it expects in January.
“However the better news for the market is that deliveries are expected to slow thereafter, particularly for the 10,000-65,000 dwt segment for which the orderbook currently represents just 5% of the fleet,” adds Tooth.
“Slower deliveries and a seasonal uptick in demand will support rates in Q2 next year and we forecast an increase in April by on average 23% from January’s lows.”
Recent freight rate developments broadly match historical trends, with Capesize October earnings 147% of the annual average for the past five years and January spot earnings 87% of the annual average historically. (World Maritime News)
Southern Europe dirty handysize freight rates near 10-month high on weather, delays
Shipowners in the Mediterranean and Black Sea basins have begun charging higher premiums for voyages due to bad weather and delays in the Turkish Straits.
Dirty tanker handysize Black Sea-Mediterranean rates have been trading at a near 10-month high, as have cross-Mediterranean rates.
The former journey traded at 215 worldscale points this week, its highest since January 5 when it was assessed 0.75 point higher. Shipowners have been asking for W200 for the latter journey, also the highest since January 5 when it was assessed at W209.75, S&P Global Platts data showed.
A broker report noted 12-24 hour delays at the Dardanelles for Northbound passage and 24-36 hour delays in the Bosporus.
For the Southbound passage, 12-24 hour delays were reported at both locations.
Large vessels such as Aframax’s, Panamax’s and Suezmax’s in the Dardanelles were facing delays of 4-5 days Northbound and 3-4 days Southbound.
Expensive freight on the large class vessels could have filtered through on the smaller ones, prompting the surge. Alternatively, if delays for larger class vessels are severe, market participants with oil to move could charter smaller ones, increasing prompt spot demand and therefore freight rates.
“There are Turkish Strait delays and world scale rates are insane,” one feedstocks trader said.
“Apparently there are a lot of cargoes and not many ships around,” a fuel oil trader said.
Traders have said cargo availability had risen over the last week, slowly easing the consistently tight fuel oil complex of the last six weeks.
“I see the Med getting heavy as we get into December on fuel with a couple of M100 cargoes moving into the Med plus extra RMG production,” another fuel trader said.
Weather in the Mediterranean and Black Sea tends to deteriorate in the winter compared to the summer, so freight rates tend to always be higher in November and December.
Stormier conditions lead to delays and make general operations more difficult, so owners respond by asking for higher premiums. In the products carried by dirty tankers — namely fuel oil, crude oil and feedstocks — more expensive freight has increased CIF premiums over FOB. As oil products generally trade on a CIF basis, this has increased the overall costs of what is trading in the region and handed an advantage to oil loading in the Black Sea which typically trades on a FOB basis. (Platts)
Drewry: Handysize LPG Ships to Be Worst Performers in 2018
Among the different size categories of LPG ships, the small vessel segment is expected to be the best performer in 2018, while Handysize vessels will be the worst, shipping consultancy Drewry said.
As a result of strong fleet growth during the last three years, the LPG shipping market is currently oversupplied with vessels, with the exception of the small segment 1,000-5,000 cbm.
The global LPG fleet expanded at an annual average rate of 17% in 2015 and 2016, and is expected to grow by 9% in 2017. However, fleet growth is set to slow down to 5% in 2018 and 3% in 2019, respectively.
As growth rates vary among size segments, Drewry has looked into the freight rate prospects of different size category of vessels and believes that Handysize ships of 12,000-25,000 cbm will be the worst performers in 2018, while small LPG vessels of 1,000-5,000 cbm will be the best.
“Ample supply will keep charter rates under pressure, as the expansion of long-haul LPG trade will tend to favour VLGCs and MGCs,” Drewry said, adding that, by contrast, fleet growth in the small LPG vessel category will be negative on the back of a thin orderbook and expected demolitions.
“In absolute terms, VLGCs have the highest EBITDA, while small coasters have the lowest. However, in order to make a better comparison, we have calculated the payback period, based on the price of a five-year old vessel in each segment and our EBITDA forecast for next year,” Shresth Sharma, senior analyst for gas shipping at Drewry, said.
“Our estimates point out that the small LPG segment will return the investment in eight years, while in the Handysize segment it will take 19 years,” added Sharma. (Splash247)
Forum: Industry Needs to Design Ships Differently
The shipping industry needs to design ships differently and be more technologically innovative to reach world climate goals and counter cybersecurity risks, it was agreed at the annual Tripartite Shipbuilding Forum.
At the meeting in Nantong, China, held on November 1-3 and hosted by China Classification Society, the forum reached several general conclusions on ship design and technology.
This year’s themes were decarbonization of ships, safe design and digitalization. These issues are interlinked as they are all relevant to the creation of a more efficient seaborne transport system, BIMCO, ICS, INTERTANKO, OCIMF, IACS, ASEF and SEAEurope said in a joint statement.
At the end of two days of debate, it was concluded that the industry urgently needs new ship designs, equipment, propulsion systems and alternative fuels to achieve the CO2 reduction goals established by the Paris Agreement on climate change, and the specific objectives to be established for international shipping by the UN IMO as part of its GHG reduction strategy.
It was agreed that the industry needs to use all available technology to a much greater extent, and increase technological innovation to reduce CO2 emissions to the ambitious degree required by the international community.
The Tripartite forum has therefore established inter-industry working groups with the aim of developing a better understanding of current R&D efforts for the new technologies needed by the shipping sector to realize its vision for zero CO2 emissions this century.
The participants hope that the general understandings reached at the meeting will send an important signal to all industry stakeholders about the vital role that everyone must play to deliver the continuous improvement of shipping’s environmental performance now demanded by global society.
The critical importance of the safety of seafarers and ships which they operate were also part of the meeting’s agenda. As explained, there are increasing concerns that new regulations governing ship designs aimed at further reducing CO2 emissions could potentially have adverse effects on the safe operation of ships.
One example would be any legal requirements that led to a further reduction of engine power. The concern is that ships could get into problems during bad weather if the engine is insufficiently powered, putting both the crew and the environment at serious risk.
Moreover, recent cyber attacks have increased awareness of potential threats facing the industry. When it comes to ship design and construction, it was generally agreed that the industry needs to adopt new methods and standards to create more resilient digital systems on board. A more layered approach to a ship’s digital system and greater segregation can increase safety, so that a single attack cannot readily spread to IT and other systems both on board the ship and ashore.
The Tripartite forum agreed that in advance of its next meeting in Korea in 2018, the industry partners represented at Tripartite will work together to develop new design standards, which will help raise the resilience of ships’ digital systems and make them more resistant to possible cyber-attacks.
The organizations present at Tripartite also re-confirmed their ongoing collaboration towards industry self-regulation as an important complement to the statutory regulations developed by IMO. (World Maritime News)
SCF Adds Two More LNG-Fueled Aframaxes at Hyundai
Russia’s SCF Group has exercised an option for two 114,000 dwt dual fuel tankers at South Korean shipbulder Hyundai Samho Heavy Industries, according to Asiasis.
The Aframax duo features an ice-class IA and is slated for delivery in 2019, based on the report.
In March this year, Sovcomflot ordered four 114,000 dwt Ice-Class IA Aframax tankers at the South Korean yard under a USD 240 million deal.
Described as the world’s first LNG-fueled Aframax tankers, the four ships are scheduled to be delivered from the third quarter of 2018 onwards.
Once delivered, the ships will be chartered to the oil and gas giant Shell. (World Maritime News)
Eurotankers bags secondhand suezmax for $18.8m
CEPSA from Spain have sold the 2004-built Teide Spirit, a suezmax that notched up significant interest from buyers. Clarkson Research reports the Spanish company received around five bids for the South Korean built ship and in the end selected Greek owner Eurotankers’ $18.8m offer.
“Sentiment is definitely on the rise for crude tonnage of this vintage, with current price levels attracting the interest of a number of established players,” Clarkson Research noted in its most recent weekly report.
Eurotankers lists a fleet of 15 vessels on its website, 12 of which are tankers while three are handysize bulkers. (Splash247)