ArcelorMittal’s Ilva bid stalled, but EU steel to benefit either way
ArcelorMittal’s bid to buy Italian steel major Ilva may have hit serious snags, but the European Union’s steel sector is set to benefit in the short term whether or not there is a deal. Italy’s Puglia and Taranto regions last week lodged a court appeal against ArcelorMittal’s takeover of Ilva which, if successful, could scupper the deal and lead to the temporary shutdown of Europe’s largest steel plant. (Reuters)
Cargill may partner on $4.3 bln rail project, Brazil chief says
The Brazilian unit of Cargill Inc is in talks to form a consortium to bid for a $4.3 billion railway project that would unite grain-growing regions in central Brazil with northern ports, the business head said on Monday. Cargill’s prospective partners to bid for the Ferrogrão railway project include rival grain traders Archer Daniels Midland Co, Bunge Ltd, and Brazil’s Amaggi, said Luiz Pretti, president of Cargill in Brazil, on the sidelines of an American Chambers of Commerce event in São Paulo. (Reuters)
Brazil’s soy crop view raised as rains boost yields, says FCStone
Brazil’s 2017/18 soy crop could reach 107.6 million tonnes, broker and analyst INTL FCStone said on Monday, raising its forecast from 106.1 million tonnes previously as favorable weather is seen boosting agricultural yields. “The improvement on the projection for the crop, which is in the final stage of planting, is a result of revising upwards our yield numbers,” Ana Luiza Lodi, INTL FCStone grains analyst in Brazil, said in the report. (Reuters)
Trade union sets deadline in talks over Thyssenkrupp Tata Steel deal
German labour union IG Metall has given Thyssenkrupp until Dec. 22 to agree guarantees on jobs, plants and investment if the company is to get the union’s backing for its deal with Tata Steel to merge their European steel operations. The deadline puts further pressure on Thyssenkrupp Chief Executive Heinrich Hiesinger, who has said he wants the approval of shop stewards for the plan to merge the group’s European steel business with that of India’s Tata Steel. (Reuters)
Russian wheat exports up 28.2% on year at 16.9 mil mt
Russian wheat exports in the 2017-18 marketing year — which began July 1 — to November 29, were up 28.2% year on year at 16.93 million mt, ministry of agriculture data showed Monday.
Export volumes have been picking up as harvesting was 97.5% completed, with 88 million mt of wheat harvested by December 1, the ministry said.
Between the start of the marketing year on July 1 and December 1, the total grains harvest reached 139.3 million mt, u 15 million mt year on year.
Russian exporters have also shipped 1.74 million mt of corn in the current marketing year, down 4.4% after a late start to the harvesting campaign and unfavourable weather conditions. Barley exports were at 3 million mt, 80.7% higher.
The main importers of Russian grains in November were Turkey with 786,000 mt, Egypt with 377,000 mt, Saudi Arabia with 293,000 mt, Sudan with 288,000 mt and Bangladesh with 265,000 mt. (Platts)
Rio Tinto expects lift in iron ore exports, met coal production in 2018
Mining giant Rio Tinto expects to see year-on-year increases in both its iron ore shipments and metallurgical coal production in 2018, the company said Monday.
It is expecting to ship 330 million-340 million mt of iron ore next year, which compares to its 2017 guidance of 330 million mt, the company said in an investor seminar.
Rio Tinto noted that Chinese environmental policy measures are increasing demand for higher grade iron ore, which benefits the company’s 62% Fe product.
Rival Australian iron ore miner, Fortescue Metals Group’s chairman Andrew Forrest last week said that his company is going to target future production of above 60% Fe.
RBC Capital Markets analyst Paul Hissey said the announcement indicates FMG moving away from the 55% and 58% Fe products which account for the bulk of the company’s current sales and would see it directly competing with existing premium ore producers.
“As this is an address from the chairman, we understand the high level of the commentary; however, the challenge must surely be as to how FMG is able to achieve this given the existing resources/reserves and installed capital base,” he added.
Rio Tinto operates in the Pilbara region of Western Australia the world’s largest integrated portfolio of iron ore assets.
Meanwhile, Rio Tinto expects a small increase to its production of iron ore pellets and concentrate from its Iron Ore Company of Canada.
Next year, IOC is expected to produce 11.5 million-12.5 million mt compared to the expectation of 11.4 million-12.4 million mt for 2017, it said.
During the investor seminar, Rio Tinto also announced it is expecting to produce 7.5 million-8.5 million mt of hard coking coal. That compares to the production guidance of 7.2 million-7.8 million mt for 2017.
Rio Tinto operates two coal sites in Queensland, namely the Kestrel and Hail Creek mines, which primarily produce high-value coking or metallurgical coal.
On Monday, Rio Tinto also announced that it has appointed former Anglo American man Simon Thompson as chairman, who is to succeed Jan du Plessis.
Thompson will become chairman on March 5 as du Plessis steps down on the same date after serving almost nine years in the role.
Thompson said he looks forward to leading the board and his team to ensure the company continues to maintain its capital discipline and “value-over-volume approach.”
He has over 20 years’ experience working across five continents in the mining and metals industry. From 1995 to 2007, he worked for the Anglo American group, holding a number of senior positions, including executive director. He has been chairman of 3i Group since 2015 and was chairman of Tullow Oil from 2012 to 2017, Rio said. (Platts)
Last Index Published Date: 5 DECEMBER 2017
Baltic Exchange Dry Index 1666 +4
Baltic Exchange Capesize Index 4115 -14
Baltic Exchange Panamax Index 1571 +12
Baltic Exchange Supramax Index 944 0
Baltic Exchange Handysize Index 628 +2
‘Kmarin Kenai’ 2012 82500 dwt dely Zhoushan 04 Dec trip via NoPac redel India with MOP $11,550 daily – Caravel
‘Lito’ 2012 81970 dwt dely Santos 6 Dec trip redel Iran $15,750 daily + $575,000 bb – Bunge
‘Caravos Glory’ 2012 81672 dwt dely Brazil 10/20 Dec trip redel Singapore-Japan $14,500 daily plus $450,000 bb – Wilmar
‘Tuo Fu 6’ 2013 81588 dwt dely CJK 04/05 Dec trip via Australia redel India $12,000 daily – Sinoeast
‘Royal Hope’ 2015 80800 dwt dely Fujian 05 Dec trip via Indonesia redel India $13,350 daily – cnr
‘Tai Progress’ 2004 77834 dwt dely Sodegaura 12 Dec trip via NoPac redel India with fertilizers $11,000 daily – Norden
‘Thisseas’ 2012 75039 dwt dely Cape Passero 07/12 Dec 2 laden legs (first leg Kamsar/Stade) redel Skaw-Gibraltar $13,000 daily – cnr
‘APJ Uma Kismat’ 2001 74107 dwt dely Colombo 05/10 Dec trip via RBCT redel India $10,750 daily – PWSL – <recent>
‘Leonidas’ Tianhui relet 2017 63800 dwt dely US Gulf mid December trip redel east Mediterranean intention petcoke $23,000 daily – ED&F Man Shipping
‘Spar Pyxis’ 2015 63800 dwt dely NC South America prompt trip redel India intention metcoke $28,500 daily – Trafigura
‘Star Eos’ 2015 63132 dwt dely Kandla prompt trip redel China intention salt $12,500 daily – Jaldhi
‘Nemea’ 2015 61300 dwt dely Lagos 04 Dec trip via Vila Do Conde trip redel China intention alumina $20,000 daily – Tamai
‘Sage Caledonia’ 2013 58086 dwt dely Zhenjiang prompt trip redel Maldives $10,800 daily – Sinoway
‘Maria’ 2010 57070 dwt dely Chaozhou 06 Dec trip via Campha redel China intention bauxite $9,700 daily – cnr
‘Oceanlady’ 2012 56815 dwt dely CJK prompt trip via CIS redel Yangon $9,750 daily – Win Shipping
‘Almyros’ 2010 56768 dwt dely Mina Saqr prompt trip redel EC India intention Limestone $13,000 daily option redel WC India $13,500 daily – cnr
‘Sealuck II’ 2004 55452 dwt dely Jorf Lasfar 09/11 Dec trip redel India intention phosphate $21,000 daily – Panocean
‘Star Delta’ 2000 52434 dwt dely Kaohsiung prompt trip via Indonesia redel China $8,750 daily – Huaya
‘Pacific Light’ 2007 50198 dwt dely Singapore 04/05 Dec trip via Indonesia redel South China $11,750 daily – Gregale Shipping
‘Capetan Vassilis II’ 2010 34467 dwt dely Mokpo spot trip via China redel Singapore intention slag $7,250 daily – Seatrek
‘Western Maple’ 2010 32493 dwt dely Canakkale prompt trip redel Spanish Med intention grain $11,000 daily – Clipper – <last week>
‘Leonidas’ 2017 63800 dwt dely Houston 09/16 Dec min 4 to 6 months trading redel Atlantic $15,750 daily – Tianhui
Oil prices inched lower ahead of U.S. crude inventories data, as the market weighed the impact of rising U.S. crude output versus last week’s deal between OPEC and other crude producers to extend output curbs. Gold prices held within a tight range in Asian trade, supported by a slightly weaker dollar as investors awaited the next steps over U.S. tax reform legislation for clues. Chinese metals futures were mixed in early trading, with nickel leading gainers on the back of stronger steel prices. Chicago soybean futures rose for a third straight session with the market trading near its highest in more than four months, buoyed by dry weather in Argentina and strong U.S. demand. (Reuters)
OPEC oil output falls in November to lowest since May
OPEC oil output fell in November by 300,000 barrels per day (bpd) to its lowest since May, a Reuters survey found, pressured by a drop in Angolan and Iraqi exports, strong compliance with a supply cut deal and involuntary declines. OPEC’s adherence to pledged supply curbs rose to 112 percent from October’s 92 percent, the survey found. Top exporter Saudi Arabia pumped below its OPEC target, as did all other members except Ecuador, Gabon and the United Arab Emirates. (Reuters)
Indian oil refiners issue tanker tenders aimed at boosting domestic shipping
Two of India’s state-owned oil refiners have issued tenders seeking to charter tankers for at least five years while giving preference to Indian companies, tender documents reviewed by Reuters showed, which would boost domestic shipping firms battered by slumping tanker rates. India’s Ministry of Shipping asked the refiners to issue long-term crude import tenders on a pilot basis and include a right of first refusal for Indian shipping lines, a government source familiar with the matter said on Monday. (Reuters)
Christophe de Margerie to Load 1st Yamal LNG Cargo This Week
The first liquefied natural gas cargo from Russia’s Yamal LNG terminal is scheduled to be loaded utilizing the Arc7 ice-class LNG tanker Christophe de Margerie on December 8, 2017.
The cargo loading would be undertaken at the Sabetta port only days after the project started producing LNG at the first LNG train with the nameplate capacity of 5.5 million tons per annum, Russian natural gas producer Novatek informed.
“This event marks a milestone accomplishment for the Yamal LNG project. The commencement of LNG production begins a new chapter in our corporate history,” Leonid Mikhelson, Chairman of Novatek’s Management Board, said.
Christophe de Margerie, the world’s first ice-breaking LNG tanker, docked at the Yamal LNG terminal on March 30 after completing its ice trials.
With a capacity of 173,600 cbm, the vessel was designed specifically to serve the country’s Yamal LNG project and transport LNG in the Ob Bay and Kara Sea. Capable of sailing through ice up to 2.1 meter thick, the 299-meter-long vessel was delivered by South Korean shipbuilder Daewoo Shipbuilding & Marine Engineering (DSME) to its owner, the Russian shipping company Sovcomflot, earlier in March.
“Many contractors and suppliers from Russia and abroad were involved in this project. We have received great support from the Russian government in implementing this project. We are grateful to all our partners, contractors and shareholders for the joint work on the way to the successful start of this project on time and on budget according to our FID schedule,” Mikhelson concluded. (World Maritime News)
No significant inventory draw expected in Q1 2018, says Saudi’s Falih
No significant oil inventory draws are expected in the next four months, Saudi energy minister Khalid al-Falih said Monday, meaning the global oil markets will not reach balance.
“Our projection is that inventories will not draw significantly in the next four months, just as we have seen in 2017,” Falih told reporters at a press conference in Riyadh following talks with his US counterpart, Rick Perry.
“It won’t make a dent,” he added.
The meeting came after Falih secured a nine-month extension to the OPEC/non-OPEC production cut deal in Vienna last Thursday, allowing the group to continue drawing down inventories.
OPEC and non-OPEC producers still need to contend with supply growth, particularly from US shale producers, making a forecast of the exact rate of stock draws difficult. There was still an estimated 150 million barrels of crude oil in storage that needed to be drained, Falih said.
The coalition had previously stated its aim of bringing OECD oil inventory levels down to their five-year average. OPEC estimated commercial OECD oil inventories stood 140 million barrels above that benchmark as of October. Now Falih is pushing for an even more ambitious target of reducing them by 150 million barrels.
How quickly this happens will be reviewed in June.
“We will wait to see it and will review in June, with the expectation, that unless something unexpected happens, we will not alter our course in the second half of the year”, Falih said.
“The outlook of when we will hit a balanced market will be clearer in June and we will start thinking what do we do in 2019,” he added.
This will mean looking at how OPEC and non-OPEC producers begin the process of exiting their supply cuts. The exit strategy, still to be devised, will certainly not include opening the taps to release 1.8 million barrels into the market overnight.
“We will have frank discussions on how much actual available spare capacity do they have and will be able to bring back. Some of them are experiencing declines, so it is fair to say some portion of that 1.8 million b/d is involuntary, so will not come back,” Falih said.
Saudi Arabia itself has more than 2 million b/d of spare capacity. Having brokered the extension, from January Falih will take over the co-chairmanship of the monitoring committee overseeing the deal, alongside Russian counterpart Alexander Novak, allowing the key pair to continue stewarding the cuts, even after he hands over the rotating OPEC presidency to UAE energy minister Suhail al-Mazrouei. (Platts)
LOOP Sour becomes lighter, sweeter for November
The US crude blend LOOP Sour was lighter and sweeter in November, even as the Louisiana Offshore Oil Port saw increased imports of Iraqi Basrah Light and Kuwaiti crude oil.
The oil terminal allocates one of its eight underground caverns to a medium sour blend comprised of US Gulf of Mexico grades Mars and Poseidon and a blend of Middle Eastern crudes called Segregation 17, which is comprised of Arab Medium, Basrah Light and Kuwait Export crude.
The LOOP Sour blend in November had an average API gravity of 29.71 degrees and sulphur content of 2.22%. Its minimum-maximum API gravity range was 29-30.5 degrees, while sulphur ranged 1.9%-2.4%. API and sulphur are two of many characteristics refiners look at when deciding which crudes to run in order to maximize or minimize production of particular refined products. Other factors include acidity, metals content, presence of asphaltenes and, ultimately, a distillation curve.
More than 1.850 million barrels were delivered ex-cavern in November, up from 1.775 million barrels in October and 525,000 barrels in September. LOOP auctions storage in the cavern through monthly allocation contracts, or CACs, sold during an auction. Each CAC gives the owner the right, but not the obligation, to store 1,000 barrels of LOOP Sour in the cavern during the contract month.
The cavern holds roughly 7.5 million barrels. LOOP offers up 7.2 million barrels of that amount monthly. LOOP received 10.257 million barrels of crude in November, up from 6.628 million barrels in October and down from 11.244 million barrels in September, according to data from Platts Analytics and the US Customs office.
Of November imports, about 4.566 million barrels consisted of Iraqi Basrah Light crude, up 1.05 million barrels from September. Basrah Light crude has an average API gravity of 30.92 degrees and typical sulphur content of 2.72%.
Kuwait Export crude also made up a large proportion of November imports, with LOOP taking in about 2.017 million barrels. In contrast, LOOP did not import any barrels of the grade in October. Kuwait Export crude has an average API gravity of 30.59 degrees and typical sulphur content of 2.66%.
It is important to note that not all LOOP Sour-deliverable crudes that arrive at LOOP will be delivered into the LOOP Sour cavern. (Platts)
Somalia Inks Jeddah Amendment on Illicit Maritime Activity
Somalia has become the 14th signatory to the Jeddah Amendment to the Djibouti Code of Conduct – the instrument developed and adopted by countries in the Western Indian Ocean and Gulf of Aden in an effort to repress piracy and armed robbery against ships operating in the region.
Mariam Aweis, Minister of Marine Transport and Ports, Federal Government of Somalia, deposited the instrument with IMO Secretary-General Kitack Lim at IMO Headquarters in London on December 1.
The amendment was adopted at a meeting in Jeddah, Saudi Arabia, in January 2017, significantly broadening the scope of the Djibouti Code.
It covers measures for suppressing a range of illicit activities, including piracy, arms trafficking, trafficking in narcotics, illegal trade in wildlife, illegal oil bunkering, crude oil theft, human trafficking, human smuggling, and illegal dumping of toxic waste.
In addition to Somalia, singatories to the revised code include Comoros, Djibouti, Ethiopia, Jordan, Kenya, Madagascar, Maldives, Mozambique, Saudi Arabia, Seychelles, United Arab Emirates, United Republic of Tanzania and Yemen. (World Maritime News)
MOL to Ship Alufer’s Bauxite from Guinea
Japan’s shipping major Mitsui O.S.K .Lines (MOL) has signed an agreement to transport bauxite for a five-year period with mineral exploration and development company Alufer Mining Limited.
Under the agreement, MOL’s ocean shipping services would support Alufer’s Bel Air bauxite mine project in the Republic of Guinea, which is scheduled to commence bauxite production in the third quarter of 2018.
The company estimated that the project would reach production of 5.5 million tonnes per annum.
Alufer, which has significant bauxite interests in Guinea, received all required permissions from the country’s government to building the Bel Air bauxite mine and construction started in January 2017. The mine is located 15 km from the coast near the Cap Verga peninsula.
The company is also building and will operate the new Cap Verga export facility which will enable the loading of Capesize vessels anchored 32 km from the coast.
MOL informed that it continues “to take a proactive stance in providing safe, reliable and efficient transport of bauxite” from the Republic of Guinea and anticipates strong growth in demand for this commodity. The current market for seaborne bauxite is around 100 mt per annum and is forecast to grow 40% by 2025, primarily driven by import requirements in China. (World Maritime News)
Pan Ocean bags 27-year deal to ship Vale’s iron ore to China
South Korean ship operator Pan Ocean has clinched a Won 1.98 trillion ($1.82 billion) deal to transport iron ore for Brazilian mining major Vale to China for 27 years from 2020, a company official said Monday.
The contract with Vale starts from January 1, 2020 and runs to August 31, 2047, the official said.
“For carrying out the deal with Vale, Pan Ocean has decided to invest Won 483 billion to secure six very large ore carriers [VLOCs],” the official said.
The six VLOCs will be delivered from December 2019 to September 2021 from a Chinese shipbuilder,” he said, declining to identify the Chinese shipyard.
The investment plan was approved by the board last week, the official said.
Pan Ocean currently operates eight iron ore carriers.
Vale has awarded long-term freight contracts to transport iron ore to some seven shipowner-operators including five from South Korea and two from China, according to sources.
Among these are South Korea’s Polaris Shipping, Korea Lines, SK Shipping and China’s Cosco as well as China Merchants Energy Shipping Group.
Vale’s latest long-term freight contract will encompass around 30 VLOCs in the 325,000 dwt class, according to one shipowner-operator source. (Platts)
Korean Register to Inspect Ships with Drones
Ship classification society Korean Register (KR) is now conducting inspection services using drones, responding to the industry-wide trend to use more unmanned technology.
Inspections are conducted onboard, in and around ships, and many of the inspected areas are high risk and difficult to access safely.
As explained, the inspections will be carried out using drones and underwater drones and will be an important part of the decision-making and assessment process for KR’s surveyors.
The new service, which has been trialed and now launched, follows collaboration and research conducted with the University of Gyeongnam Geochang, according to the KR. After researching the possibilities and technology available, KR successfully completed a series of tests utilizing camera-equipped drones for ship inspections, and at the same time established a registration process for service suppliers, including the university.
“We can now offer full ship inspection services with camera-equipped drones, employing the very latest technology. This development will be a significant advantage for our customers’, saving their time and capital resources as well as increasing efficiency and safety at the worksite, which I hope, will in turn improve competitiveness across the shipping industry,” Lee Jeong-kie, Chairman and CEO of KR, commented.
Moving forward, KR plans to provide services using a variety of different drones to expand its inspection service areas. (World Maritime News)
IACS chairman urges for regulations that reward early adopters
The maritime world is in the middle of a period of rapid change, with increasing digitalisation, new regulations and shifting market. Classification societies can help to remove barriers, speed up the process and assist stakeholders to make the most of this new landscape, Knut Orbeck-Nilssen, chairman of the International Association of Classification Societies (IACS) and CEO of DNV GL Maritime said at a press conference during the Marintec China exhibition in Shanghai today.
“One of the major contributions of class in current times of transformation is to bring familiar assurance processes to new and unfamiliar technologies,” Orbeck-Nilssen said. “This will help to ensure a quick uptake and smoother implementation of new technologies which can enhance safety and increase efficiency,” he added.
According to Orbeck-Nilssen, IACS has been working to adapt regulations to new needs and remove regulatory barriers.
“An effective regulation is one that rewards early adopters. At the moment, it could be argued that those who adopt last get the best financial return. Instead, let us embrace the opportunities which arise from the digital transformation and be proactive in addressing challenges,” Orbeck-Nilssen maintains.
Talking about challenges, Orbeck-Nilssen reckoned the ship systems are becoming ever more complex and increasingly controlled by software which is leading to new risks like hacking and cyber-crime. Accordingly, the role of class should expand into new verification fields including cyber safety, assurance of data quality, and sensor-equipped cyber-physical systems.
“The role of class has never been so important in the shipping industry,” Orbeck-Nilssen concluded. (Splash247)
Euronav Offloads Another Tanker Oldie
Belgium-based tanker owner Euronav NV has disposed of another ship in an effort to reduce the age of its fleet and invest in new vessels.
The company has sold Flandre, a very large crude carrier (VLCC), for USD 45 million to “a global supplier and operator of offshore floating platforms.”
The France-flagged vessel is expected to be delivered in December 2017. It will be converted in a floating production storage and offloading (FPSO) unit by its new owner and will therefore leave the worldwide VLCC trading fleet, Euronav said.
Built at South Korean shipyard Daewoo Shipbuilding and Marine Engineering (DSME) in 2004, the 305,688 dwt Flandre is wholly owned by Euronav. Following the recent sale of the 2001-built Artois, Flandre is the oldest vessel in the company’s VLCC fleet.
A capital gain of approximately USD 20.3 million on the sale will be recorded in the current quarter, as informed by Euronav.
“This … achieves two key objectives for the company. Firstly, it profitably assists our fleet renewal program by reducing the age of our fleet and will allow capital to be recycled into modern tonnage. Secondly, this is the seventh vessel we have successfully introduced into an offshore project, further demonstrating our reputation for providing … operational tonnage for the offshore sector,” Paddy Rodgers, CEO of Euronav, commented.
Currenlty, Euronav’s owned and operated fleet comprises 54 double hulled vessels. (World Maritime News)
Hyundai Heavy wins multiple VLCC contracts
Christmas has come early for the world’s largest shipbuilder with a bumper crop of VLCC contracts just in.
Allied Shipbroking is reporting that Kyklades Shipping of Greece has come in for two firm and two option 319,000 dwt tankers at Hyundai Heavy Industries (HHI) for delivery in 2019 and 2020. The tier II ships are costing $81.5m each and come on the back of fixed time charters.
In further good news for HHI, fellow Korean owner Sinokor has ordered a pair of 319,000 dwt tankers. The tier III ships are costing $2m more than what Kyklades is paying and are fixed on long term charter to local energy firm GS Caltex.
After a fallow few years, HHI is finally seeing significant orders filter in, led by Greeks opting for cheap VLCCs. (Splash247)