Copper execs see balanced market, warn on rising costs, regulation
The global copper market will be balanced for the foreseeable future even as mine supplies tighten and demand from China, the world’s top consumer, remains strong, executives from major copper companies said on Wednesday. The forecast came as executives warned that rising environmental regulation in Chile, the world’s top producer, and China, the world’s top consumer, are raising production costs for smelters and miners. (Reuters)
Another bumper Russian grain crop likely in 2018
Russia, a major global wheat exporter, is expected to produce another large grain crop in 2018 following a record crop this year and increasing pressure on prices, leading agriculture consultancy SovEcon said on Wednesday. In the first major estimate for 2018, SovEcon said Russia’s grain harvest could amount to 128.2 million tonnes next year after this year’s record 134 million tonnes. (Reuters)
Australian industry prepares for possible summer power cuts
Some of Australia’s biggest power users, including mining giant BHP, are taking steps to curb the impact of any repeat of crippling blackouts that hit last summer, worried about a grid that increasingly relies on wind power and old coal-fired plants. Their back-up strategies come despite assurances from the nation’s energy market operator that it has lined up enough power reserves – including the world’s biggest lithium ion battery, set up by Tesla Inc – to get through all but the most unexpected conditions. (Reuters)
Last Index Published Date: 30 NOVEMBER 2017
Baltic Exchange Dry Index 1578 +42
Baltic Exchange Capesize Index 3848 +108
Baltic Exchange Panamax Index 1433 +65
Baltic Exchange Supramax Index 941 +5
Baltic Exchange Handysize Index 623 +1
‘CPO America’ 2010 179570 dwt dely Hansaport 05/07 Dec transatlantic round voyage redel Skaw-Cape Passero $30,000 daily – Cosco – <fixed 29/11>
‘Kmax Leader’ 2010 91827 dwt dely US Gulf 10/15 Dec trip redel Skaw-Cape Passero $14,750 daily plus $475,000 bb – Jera Trading
‘Rosco Poplar’ 2008 82331 dwt dely CJK prompt trip via Newcastle redel Japan $12,000 daily – Vattenfall
‘MBA Giuseppe’ 2010 82256 dwt dely Yatsushiro 30 Nov trip via NoPac redel Singapore-Japan $11,000 daily – Ultrabulk
‘Astrea’ 2015 81838 dwt dely US Gulf 18/23 Dec trip redel Singapore-Japan $17,000 daily + $700,000 bb – cnr
‘Hampton Bay’ 2009 81508 dwt dely US Gulf 05/10 Dec trip redel Singapore-Japan $16,500 daily plus $650,000 bb – Cargill – <corrects delivery 29/11>
‘Lyric Harmony’ 2012 81500 dwt dely Huangpu 29 Nov trip via EC Australia redel India $11,250 daily – Norvic
‘Yasa Falcon’ 2012 81488 dwt dely EC South America 10/20 Dec trip redel Singapore-Japan $14,500 daily + $450,000 bb -cnr
‘Navios Amber’ 2015 80994 dwt dely Bordeaux spot trip via US Gulf and Cape of Good Hope redel Singapore-Japan $19,500 daily – Norden
‘Asia Opal’ 2011 80328 dwt dely Puerto Drummond 03/15 Dec trip redel Skaw-Gibraltar $13,300 daily plus $330,000 bb -Jera Trading
‘Bettys Beauty’ 2006 76863 dwt dely EC South America 14/15 Dec trip redel Skaw-Gibraltar $16,250 daily – Cargill
‘Danae’ 2005 75349 dwt dely retro Haldia 25 Nov trip via East coast South America redel PMO-Japan close $11,000 daily -cnr
‘Clymene’ 2006 73600 dwt dely East coast South America 15 Dec trip redel Skaw-Gibraltar $16,250 daily – Cargill
‘Nautical Loredana’ 2015 63556 dwt dely US Gulf – <29/11 report incorrect>
‘Elina B ‘ 2011 58550 dwt dely Philippines prompt trip redel Singapore intention sands $11,000 daily – Shinning Int’l
‘Joie N’ 2011 56557 dwt dely Hong Kong 03/06 Dec trip via Vietnam redel China intention Clinker $10,000 daily – Mandarin Ocean
‘Ikan Seligi’ 2010 56236 dwt dely Singapore 07/10 Dec trip via Indonesia redel China $11,500 daily – cnr
‘Christina B’ 2007 56071 dwt dely CJK prompt trip via NoPac redel Singapore-Japan $8,850 daily – Louis Dreyfus
‘Thor Maximus ‘ 2005 55695 dwt dely Ukraine prompt trip redel Singapore-Japan $17,000 daily – Merit – <last week>
‘Maritime Victory’ 2010 28344 dwt dely Lianyungang 10/15 Dec trip redel Indonesia intention steels $8,200 daily – Well Reach
‘Star Pauline’ 2008 180274 dwt dely CJK 06/06 Dec 3/5 months trading redel worldwide $21,800 daily – Dong-A Tankers
‘Star Triumph’ 2004 176000 dwt dely Yura, Japan 06/07 Dec approx 1 years trading redel worldwide $17,500 daily – Korea Line
‘Madredeus’ 2011 98681 dwt dely Longkou 03/04 Dec 5/7 months trading redel worldwide $14,000 daily – Jiangsu Steamship
‘Navios Avior’ 2012 81600 dwt dely CJK 03/05 Dec 5/8 months trading redel worldwide $11,500 daily – Louis Dreyfus
‘Navios Aldebaran’ 2008 76529 dwt dely Zhuhai 03/06 Dec 3/5 months redel worldwide $11,500 daily – cnr
‘Snowy’ 2015 63516 dwt dely Dandong 28 Nov 4/6 months trading redel worldwide $10,800 daily – Oldendorff
‘Tiger Hebei’ 2015 63483 dwt dely Iloilo 05 Dec 3/5 months trading redel PG-Japan $11,200 daily – Ausca Shipping
Oil markets were cautious ahead of an OPEC meeting in Vienna, with producers set to debate an extension of the supply-cut agreement that came into effect in January with the goal of tightening supplies and propping up prices. Gold held close to a one-week low hit in the previous session, pressured by upbeat U.S. growth data for the third quarter and Federal Reserve chair Janet Yellen’s bullish view of the economy. Base metals declined and looked to finish November lower, shrugging off encouraging manufacturing reports from China and Japan as investors locked in profits before year end. U.S. wheat futures lost ground, slipping for four out of six sessions and trading near contract lows made earlier this week as record world supplies added pressure on prices. The dollar held steady but was set for a monthly loss against a basket of currencies as investors warily watch progress on U.S. tax reform legislation, while sterling stood tall on optimism a Brexit accord would be reached. (Reuters)
OPEC, Russia head for oil cut extension but wary of overheating market
OPEC and Russia look set to prolong oil supply cuts until the end of 2018 this week while signalling that they may review the deal when they meet again in June if the market overheats. With oil prices rallying above $60 per barrel, Russia has questioned the wisdom of extending existing cuts of 1.8 million barrels per day (bpd) until the end of next year as such a move could prompt a spike in U.S. production. (Reuters)
Hong Kong listing for Aramco could attract huge Chinese demand-HKEX CEO
A Hong Kong listing by Saudi Aramco would help the oil giant secure huge Chinese demand for its $100 bln share sale, said the head of Hong Kong Exchanges & Clearing (HKEX) on Wednesday, as the world’s leading stock exchanges pitch for the business. Saudi Aramco said in October that exchanges such as New York, London, Tokyo, and Hong Kong have all been looked at for the partial listing of the state company’s shares. (Reuters)
China state companies reach for new markets as 2017 diesel exports surge
Chinese state companies are shipping diesel to new buyers in the Middle East and Latin America as exports of the fuel head towards a record, and independent refiners could help raise the outbound sales even higher next year, multiple sources said. At least one of the independent refiners is looking to invest in fuel storage in southern Malaysia and others are setting up offices in Singapore, anticipating that Beijing is going to ease its export policy for the independent companies, said the sources involved in the shipment of diesel from China. (Reuters)
Nigeria’s NNPC targets up to $5 bln oil prepayment
Nigeria’s state oil firm is looking to set up a $3.5-$5 billion cash-for-crude prepayment with some of the world’s top commodity traders to fund oil and gas upstream projects as well as related infrastructure, sources with direct knowledge of the matter said. Africa’s biggest oil producer and OPEC member was hit hard by the sharp drop in global oil prices in 2014 that pushed it into its first recession in 25 years. The country returned to growth-mode in the second quarter. (Reuters)
Iraq aims to up Rumaila oilfield output to 1.5 mln bpd in 2018
Iraq is planning to increase production from the giant Rumaila oilfield to about 1.5 million barrels per day (bpd) in 2018, the head of Rumaila operations said. Rumaila oilfield, developed by Britain’s BP and Chinese partner CNPC, now produces about 1.45 million bpd, Mohammed Hassan told Reuters late on Tuesday. (Reuters)
LNG Retrofitting Sparks High Interest
There is a strong interest of shipowners in retrofitting their ships with liquefied natural gas-powered (LNG) engines in order to meet the requirements of the Ballast Water Management (BWM) Convention, a survey shows.
Specifically, according to the findings of SMM’s first Maritime Industry Report, some 54 percent of responding shipowner CEOs intend to retrofit their ships accordingly.
Stricter environmental regulations have made LNG a top choice as an alternative to conventional ship fuels. 44 percent of respondents said LNG is their first choice when contemplating ship newbuilding orders. But hybrid solutions based on marine diesel are likewise popular, the survey reveals.
“There is no way around the energy transition in the maritime sector. The increasing number of newbuilding orders and retrofits shows that LNG is gaining ground. The future of low-emission shipping has long begun,” says Reinhard Lüken, General Manager, German Naval Architecture and Ocean Engineering Association (VSM). The supply industry agrees, with 49 percent of respondents saying they consider LNG as the champion among alternative fuels.
Another item high up on the agenda is Autonomous Shipping: 36 percent of shipowner executives believe it to be the future of merchant shipping. 90 percent of those in support believe that the use of unmanned ships will be routine in as little as 20 years.
“We have seen an enormous shift in public opinion here,” says VDR Managing Director Max Johns. The two-decade horizon is not a far-fetched prospect, considering the average service life of a ship, he adds. The results of the survey show that the overall Maritime Industry Score was 54.6 points, with the shipping segment’s 33.2 points clearly lagging behind shipbuilding (47.1 points) and the supply industry (61.9 points). These figures represent the ratio of positive versus negative growth expectations.
As disclosed, the surprisingly positive outcome proves that the industry is beginning to see light at the end of the tunnel.
Shipowners view the growth prospects as positive, indicating an increasing willingness to invest, as one particular survey result reveals: 20 percent of responding decision-makers consider it as ‘very likely’, and an additional 12 percent as ‘likely’ that they will order new ships within the next 12 months.
Further findings indicate that the maritime sector is already showing great interest in remote monitoring of ships and ways to protect ships against cybercrime.
“The opportunities and challenges of digitalization are on everybody’s mind in this industry. Therefore this topic will play a key role at SMM 2018, for example during the Maritime Future Summit,” says Business Unit Director HMC Selbach.
New technologies that can be helpful in optimising processes and increasing efficiency are in demand. Accordingly, 66 percent of respondents from supply companies see a “high” or “very high” sales potential for their products in the market. Three out of four (74 percent) have observed that innovative technology is being welcomed by customers.
The responding suppliers believe that the German, Chinese and US markets have the highest growth potential.
HMC plans to conduct the SMM Maritime Industry Report every two years in order to draw a continuous picture of the maritime industry mood.
“Our first comprehensive industry survey is a great source of inspiration as we prepare for the next SMM in September 2018,” says Bernd Aufderheide, President and CEO, Hamburg Messe und Congress GmbH.
The survey reflecting the views of more than 2500 participants from 69 countries, including representatives of shipowning companies, shipbuilders and suppliers. (World Maritime News)
No Delay to 2020 Sulphur Cap’s Entrance into Force
The 2020 sulphur emissions legislation will enter into force without delay, Edmond Hughes, IMO’s head of air pollution and energy efficiency (MEPC) said while speaking in Athens recently.
The reassurance was made to put an end to the overall confusion plaguing the industry amid rumored delays in the implementation and lack of preparedness of industry players to meet the requirement.
The fierce stance is being pursued by the International Maritime Organization following the criticism over some softening of recent legislation. This is also evident in the delays related to the implementation of the Ballast Water Management Convention (BWMC).
According to Hughes, cited by Gibson Shipbrokers, any breach of the legislation could result in the detention of a vessel and determining of a non-compliant ship as “unseaworthy”. This could, in turn, affect the charter party and also indemnity in the event of an insurance claim.
Compliance, enforcement and monitoring will be the responsibility of both the flag and port states.
However, the issue of becoming compliant is heavily reliant on the availability of compliant fuels as a vast volume of HSFO needs to be replaced by 0.5% sulphur fuel, which cannot happen overnight. The other option for obtaining compliance are scrubbers, but the uptake of scrubber technology has been very slow.
“The worry for the industry is what the premium will be over the fuel oil price in 2020. Anyone considering the scrubber option should be taking steps now to plan as competition for yard space could become critical the nearer we get to the deadline (effectively 24 months away). Mass adoption of LNG conversion as an alternative fuel is off the menu for several reasons. However, the only area that there is unanimous agreement is that the changeover is going to be costly for all interested parties,” Gibson concluded. (World Maritime News)
ICS: Bunker Suppliers Face Death of Fossil Fuels in Shipping
As the shipping sector sails towards a future of zero CO2 emissions, marine bunker suppliers could see a significant drop in demand for fossil fuels within as little as 25 years, International Chamber of Shipping (ICS) said.
“Governments need to recognise that many ships will remain dependent on fossil fuels probably at least until around 2050,” Simon Bennett, ICS Director of Policy, said at the Platts’ Mediterranean marine bunker fuel conference in Athens.
“But the momentum created by the Paris Agreement on climate change means that the wholesale switch to alternative fuels and propulsion systems will be relentless and inevitable.”
“This will happen as soon as the technology and bunkering infrastructure permits, which ICS is confident it eventually will, whether using fuel cells or batteries powered by renewable energy, technologies such as hydrogen or some other solution we can’t yet anticipate,” Bennett added.
Commenting on the development by IMO Member States of a comprehensive strategy for addressing CO2 emissions from shipping, scheduled to be adopted in April 2018, Bennett said there was already broad consensus among governments that the goal was zero CO2 emissions and that IMO had already drawn up a list of possible short, medium and longer term candidate CO2 reduction measures for helping shipping to achieve this.
ICS says that the most challenging area in the ongoing IMO negotiations is agreement on the levels of ambition for CO2 reduction, by the sector as a whole, before zero CO2 fuels become widely available.
This is the process of managing the transition to alternative fuels, which has to be set against projections for increased demand for maritime transport due to massive global population growth, plus increasing prosperity and economic development which international shipping directly facilitates.
The shipping industry, including ICS, has therefore proposed that IMO Member States should agree that the initial goal should be to hold the entire sector’s total CO2 emissions below 2008 levels.
On the controversial question of the possible development of a Market Based Measure to help reduce CO2 emissions from shipping, Bennett said that an MBM, most likely a fuel levy, was likely to go forward as a possible candidate measure as part of the initial UN IMO strategy to be agreed next April.
“Fuel is already by far shipping’s greatest cost, and we already expect a truly massive increase in bunker costs as a result of the switch to low sulphur fuels required by the IMO global sulphur cap that comes into effect in January 2020,” Bennett concluded. (World Maritime News)
Cape market ‘on fire’: Fearnleys
Norwegian brokers Fearnleys describe the capesize sector as “on fire” at the moment in its latest weekly report.
“Weather delays in China and also significantly increased Brazil activity adding fuel to a market segment on fire,” Fearnleys stated, adding how currently it was “happy days” for capes. As well as improving iron ore demand and prices, Fearnleys reported coal transaction volumes have been higher than predicted.
“Forward pricing at USD 18.00 for C3 and USD 8.00 for C5 basis January loading gives reason for faith entering a normally challenging period. Average earnings coming in at USD 26,600, best so far in 2017 and up 18 pct w-o-w,” Fearnleys stated.
Nevertheless, the broker pointed out that the gap between physical expectations and FFAs is still prohibitive and consequent period activity has been limited. A notable exception, the broker observed was 2016-built, 170,000 dwt bulker delivering China prompt and fetching $17,000 a day on a 13-month contract. (Splash247)
Hamburg bunker fuel prices drop to Rotterdam levels on weak demand
Hamburg 380 CST bunker fuel oil lost its premium to competing port Rotterdam after prices fell to a seven-month low Tuesday, with low demand at the German port weighing while the Rotterdam market strengthened.
S&P Global Platts assessed the differential between Hamburg and Rotterdam for 380 CST fuel oil at $0.00/mt Tuesday, down from $16/mt Monday and its lowest level since April 19.
The price of fuel oil at Hamburg dropped sharply Tuesday due to low demand, sources said Tuesday. 380 CST fuel oil was assessed by Platts at $353/mt delivered Tuesday, down $11/mt day on day.
“Demand is quiet,” a source said Monday. “Buyers are more selective and if vessels are going to various ports they would rather lift in ARA than Hamburg where fuel oil is cheaper. Fuel in Hamburg often has higher transportation costs incorporated compared to ARA, and with shipowners not in a good financial state, they are checking every dollar.”
Fuel oil at Rotterdam rose $5/mt Tuesday to $353/mt on the back of a competitive bid and subsequent trade in the Platts Market on Close assessment process, with V-Marine selling to Peninsula.
Demand could potentially pick up in Hamburg now that prices of fuel oil are similar to those at Rotterdam, one trader said, indicating the price of 380 CST was $354/mt Wednesday morning. Another trader cast doubt whether prices at Hamburg would remain so close to those at Rotterdam Wednesday, indicating that prices at Hamburg were as high as $360/mt Wednesday morning while other traders pegged prices at Rotterdam at $348/mt. (Platts)
German Banks Cutting Further Their Ship Finance Exposure
The recent recovery of the container shipping and dry bulk market has not dissuaded German banks from reducing their exposure to shipping loans which pushed the country’s banking sector into the red.
As NORD/LB Norddeutsche Landesbank reports its return to profit for the first nine months of this year, the German lender said it would reduce its ship finance portfolio to EUR 10 billion, and at a pace faster than expected.
The bank posted a consolidated profit after taxes worth EUR 228 million.
In the ship financing segment, which will be managed exclusively at the Hanover location in the future, NORD/LB scaled back its portfolio to EUR 13.3 billion and it expects the amount to fall below this mark by the end of the year.
The bank is also working on improving the portfolio’s quality by staying clear of low-risk new business.
“In the medium term, the portfolio is expected to amount to around EUR 10 billion, whereby the proportion of problematic financings (NPL) is to be considerably reduced,” the bank said.
NORD/LB has set itself the goal of reducing the NPL portfolio in ship financing from today’s EUR 9.1 billion to EUR 5 billion by the end of 2019.
German lender HSH Nordbank, which is preparing for its privatization, set to close in February next year, said it has also concluded new business deals in its shipping segment on a restrictive basis.
This means that the bank inked deals on financing exclusively with international shipping companies that have a good credit rating. The shipping segment was on budget with a figure of EUR 0.4 (0.2) billion.
In the group’s shipping portfolio, the NPE was reduced to EUR 5.8 billion from last year’s EUR 8.3 billion. (World Maritime News)
Pan Ocean to Invest in Six New VLOCs
South Korean shipping company Pan Ocean informed that it is investing in the construction of six very large ore carriers (VLOCs).
Pan Ocean has earmarked KRW 483.1 billion (USD 444 million) to finance the order.
The new ships are intended to be employed on long-term cargo contracts.
In a separate announcement, the company disclosed that it had entered into a Contract Of Affreigtment (COA) with Brazilian mining company Vale International SA on November 29, 2017, for the transportation of Brazilian iron ore at estimated total sales of approximately USD 1.8 billion.
The duration of the COA is 27 years starting from the first quarter of 2020.
As explained by Pan Ocean, the COA will secure a stabilized source of revenue and profit for the shipping company.
The first ship from the batch is scheduled for delivery in December 2019, while the final one from the series is set for completion and delivery in September, 2021.
Details on the potential yards to be entrusted with the construction work were not disclosed.
Pan Ocean reported a 55.4 percent rise in profit for the third quarter of 2017 when compared to the third quarter of 2016.
The Q3 profit for this year stood at USD 36.9 million against USD 23.7 million reported in Q3, 2016.
The increase was attributed to demand growth related to iron ore and coal in China driven by the steady development of the country’s economy. (World Maritime News)
Euronav Sells Suezmax Veteran
Belgian tanker owner Euronav NV has disposed of another older vessel as it ramps up efforts to shed outdated tonnage and renew fleet.
Following last week’s sale of its oldest VLCC, Euronav said today that it has sold the 1998-built Suezmax Cap Georges for USD 9.3 million.
The 146,652 dwt vessel was delivered to its new owners yesterday.
The tanker owner and operator said that it will record a capital gain of approximately USD 8.5 million from the sale in the current quarter.
As explained, the sale of the Cap Georges comes in anticipation of the delivery of the first of four Suezmax vessels early in 2018 currently under construction at the Hyundai Heavy Industries (HHI) yard in South Korea.
These vessels are part of a seven-year contract for four vessels with an unnamed global refinery player.
Euronav’s owned and operated fleet consists of 55 double hulled vessels being 1 V-Plus vessel, 30 VLCCs, 18 Suezmaxes, four Suezmaxes under construction and two FSO vessels (both owned in 50%-50% joint venture). (World Maritime News)