News AbstractsDry Bulk Terminals Group – January 2017 – Issue 164
For your personal interest and information. These News Abstracts are compiled by the DBTG Secretariat from direct sources. Publications including Fairplay (FP),and various international agencies, as well as the research division of Clarkson and Fearnleys. They cover a wide range of issues of direct and indirect relevance to dry bulk terminal operators as well as the aims and activities of the DBTG.
Welcome to the selection of news extracts for January 2017. The first month of the New Year has flown by and that means there are only 11 left to go before Christmas hits us all again!
I hope by now you are all aware of the dates for the Spring meeting. It will be held in Gijon 28th to 30th March with an option to take part in extra terminal tours on the 27th in Santander. I sent details and a website link to the programme and registration form to you all on the 20th January.
We have already received some registrations and look forward to receiving yours in due course. However, I would urge all of you to book the Gijon hotel as soon as you can as they will only hold the rooms for us until the end of next week. To avoid disappointment your rooms should be booked soonest.
This month I am planning a visit to Holland. I am in the process of contacting Dutch Members and hope to see as many of them and their terminals as I can. It is a long time since I was in Holland and I’m very much looking forward to returning.
As I have previously mentioned, interest in the Ballast Water Management Convention continues to gather pace. This area is on the programme at the
Spring meeting and I continue to seek interesting speakers who can offer a diverse selection of views on the subject.
Finally, as always, if there is anything contained in this Newsletter that you would like to discuss further, please don’t hesitate to contact me.
Nic Ingle - Executive [email protected]
DIARY DATES North American dredging Summit - 8th/9th
February, Houston Philippine Ports and Shipping – 23rd/24th
February, Manila European Shipping week – 27th February,
Brussels
IN THIS ISSUE
Shipping Matters Economy/Finance/Trade Commodities Terminals/Ports Ballast Water Management Freight Market
SHIPPING MATTERS
Euroseas sends elderly bulk carrier for scrap – SMN Jan 2nd
Athens-based Euroseas has sold a 72,119-dwt dry bulk
carrier for scrap, and took delivery of a secondhand
1,645-teu feeder boxship.
The 1997-built bulker Eleni P is the oldest dry bulk vessel
in the company’s fleet and is expected to be delivered to
the scrapyard in the beginning of January 2017.
The purchase of the 1998-built feeder container vessel
RT Dagr was made via funds raised from the issuing of
900,000 shares of the company’s common stock.
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News AbstractsDry Bulk Terminals Group – January 2017 – Issue 164Aristides Pittas, chairman and ceo of Euroseas,
commented: “This transaction is an overall positive
development for Euroseas and showcases our ability to
take advantage of market opportunities to renew our
fleet.
“For a nominal incremental investment, the Eleni P will
be replaced by a larger and younger vessel, the Capetan
Tassos, a 75,100-dwt 2000-built dry bulk vessel, whose
acquisition we announced on 23 November 2016. We
will continue positioning our fleet for a potential market
recovery and exploiting investment opportunities in the
present market environment.”
After the sale of Eleni P, the delivery of RT Dagr, and the
previously announced acquisitions of Alexandros P and
Capetan Tassos, to be delivered to Euroseas in January
2017, the company's fleet will consist of 14 vessels,
including one kamsarmax, three panamax, one ultramax
and one handymax bulker, and eight feeder
containerships.
Global bunker prices doubled in 2016 – SMN Jan 3rd
Global bunker fuel prices have approximately doubled
over the course of 2016, rising from below $200 per
metric tonne (pmt) to well over $300 pmt.
Marine fuel prices across the globe’s four major
bunkering ports – Singapore, Rotterdam, Fujairah and
Houston – climbed steadily and doubled over the past
12 months, according to data from Ship & Bunker.
Singapore, the world’s largest bunkering port by sales
volume, saw key grade 380 cst bunker prices rose to
$346 pmt on 30 December 2016, representing an
increase of 85.6% from $186.50 pmt recorded on 4
January 2016, Ship & Bunker data showed. The last time
that Singapore 380 cst price dipped below $200 pmt was
on 31 December 2008 when it was indicated at $198
pmt, according to data obtained by Seatrade Maritime
News.
During the same 12-month period, Rotterdam 380 cst
bunker fuel prices more than doubled to $310.50 pmt
from $142 pmt. Houston 380 cst prices also surged by
112.9% to $313.50 pmt at the close of the year from
$147.50 pmt at the beginning.
Fujairah port in the Middle East posted a 99.4% jump in
380 cst prices to $337.50 pmt from $169.50 pmt over
the same period.
Sales volume for 380 cst bunker fuel across the four
main bunkering ports account for around 25% of global
volumes.
Crude oil prices, meanwhile, made more humble gains
compared to bunker fuel, but nonetheless considerable
spike, as they rose 56% over 2016, having ended at
$56.82 per barrel on 30 December 2016 compared to
$36.42 per barrel on 5 January 2016.
The oil supply landscape has pointed to firmer prices
after oil cartel Opec agreed to cut production output by
1.2m barrels per day starting 2017 in order to lift oil
prices, while non-Opec producers also agreed to reduce
output by 558,000 barrels per day to help deflate the
supply glut.
Dry bulk market: Let the good times roll – SMN Jan 6th
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News AbstractsDry Bulk Terminals Group – January 2017 – Issue 164The new year has begun in great optimism and rolling on
the positive mood of the previous year. The larger vessel
classes are expected to lead the charge as the freight
market heads towards recovery- with players hoping this
is a new beginning rather than another false dawn.
Recent polls taken by the Singapore Exchange (SGX)
suggest that over half of the participants questioned
believe that 2017 will be a year of “moderate”
improvement for the dry bulk freight supply/demand
fundamentals. However, around 28% of the participants
polled believed that the freight market will remain
relatively unchanged in 2017 compared to 2016, thus
demonstrating the market’s mixed outlook.
Industry participants are most hopeful for recovery in
the Capesize freight market, with 39.4% expecting this
vessel class to have strongest performance in 2017,
followed by 34.4% for Panamax, another 16.4% for
Supramax and 9.85% for Handysize.
Clearly this positivity has drawn support from the
improvement in the Baltic Dry Index (BDI) which rose by
16 points day-on-day to 969 points on Wednesday. The
increase has also been reinforced by other vessel classes
– but especially the larger ones.
“Capesizes extended their bullish open to the year with
both physical and paper seeing gains,” said a FIS FFA
broker. He credited the gains partly to potential cyclone
disruption in Australia, weather delays in China and the
lack of prompt tonnage in the Atlantic for the big push
on both the paper and physical markets.
By midweek, the spot Capesize time charter average
rate had reached $11,346, up 11% as compared to the
rates at the beginning of the week. But smaller vessels
like the Supramax and Handysize found their rates
slipping slowly since the start of the week.
For instance, freight rates for Supramax ended
Wednesday at $8,572, down 2.71% day-on-day, while
Handysize rates settled at 7,688 on 4 January 2016,
down 3% day-on-day.
The majority view is likely to be that many industry
participants view 2017 as a turning point with some
improvement giving way to consolidated gains in future
years. The SGX poll result clearly reflects this sustainable
improvement in freight rates, with 12% voting that the
freight market will be better in 2017, 28.7% choosing
2018 but most voting for 2019 as the year with best
prospects.
Whether 2017 offers a stepping stone to better days
remains anyone’s guess, but FFA traders will continue to
look for opportunities whether in an up or down market,
as the law of nature dictates that those most responsive
to change – not necessarily the smartest - will evolve
and survive. Until then, let the good times roll.
Dryships set for expansion into VLGC sector – SMN Jan 6th
Dryships is set to enter the gas carrier market with an
option agreement to buy four VLGC newbuildings from
its chairman and CEO George Economou.
The agreement comprises four separate options to buy
the VLGCs under construction at Hyundai Heavy
Industries for $83.5m per vessel. The zero cost options
are valid until 4 April 2017.
Newbuildings due for delivery between June and
December this year and all have time charters of five or
10 years attached. If Dryships takes up the options the
vessels by another Economou controlled company TMS
Cardiff Gas.
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News AbstractsDry Bulk Terminals Group – January 2017 – Issue 164
CEO George Economou
As CEO and chairman of Dryships, Economou
commented: “We believe in the long-term prospects of
the gas carrier market. Having the option to acquire a
fleet of four sister ships of very high specifications, ready
for delivery in the near term and chartered to major
industry players, provides us with a unique opportunity
to enter this new segment in a solid footing that can be
a stepping stone for further expansion.”
Wisdom Marine records lower earnings for 2016 – SMN Jan 9th
Taiwan’s Wisdom Marine has registered lower earnings
for 2016 due mainly to the low freight rates on the back
of a weak dry bulk shipping market.
The Taipei-listed dry bulk shipowner posted a net profit
before tax of $47.69m for 2016, a plunge of 32.7%
compared to the 2015 financial year.
Revenue also dropped by 4.6% year-on-year to $331m,
Wisdom Marine announced.
The shipowner said its earnings were impacted by some
early termination of vessel charter contracts in view of
weak demand, and strengthening Japanese yen leading
to heftier loans.
Wisdom Marine operates a fleet of 114 ships, mainly
handysizes, and has 21 newbuildings scheduled for
deliveries up until April 2020, according to its website.
Courage Marine eyes $12m from placement of new shares – SMN Jan 9th
Dry bulk shipowner Courage Marine has announced a plan to raise up to HKD97.03m ($12.51m) from the placing of 25.4m new shares.
The new shares will be priced at HKD3.82 apiece and the
net proceeds are intended to be used as general
working capital and funding of suitable business or
investment opportunities.
Get Nice Securities Limited, the placing agent, will place
the new shares to no less than six independent placees.
The placing shares represent approximately 19.99% of
Courage Marine’s existing issued share capital and
approximately 16.66% of the company’s issued share
capital as enlarged by the allotment and issue of the
shares.
“The board is of the view that the placing will enlarge
the shareholder base and the capital base of the
company,” Hong Kong-listed Courage Marine stated.
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News AbstractsDry Bulk Terminals Group – January 2017 – Issue 164“In addition, the net proceeds of the placing will
strengthen the group’s financial position for future
development of the group,” it said.
The shipowner added that it has not conducted any
other equity fund raising exercises in the past 12 months
immediately before the announcement of this exercise.
Greek fleet grows by over 10% in 2016 – SMN Jan 11th
With a growth of 6.5% in vessel numbers and 10.26% in
carrying capacity Greek shipping continued to power
forward in 2016, an impressive feat, given the
challenging market conditions limited cash flows and
restricted bank lending.
However, while the fleet has grown, market conditions
have squeezed the number of Greek companies, reveals
a two-part annual survey on the state of Greek shipping,
by Athens-based Petrofin Research.
The first part of the survey places the Greek fleet at
5,230 vessels up from 4,909 and tonnage in dwt terms at
361.93m a 7.25% increase on a year ago.
Ted Petropoulos, head of Petrofin Research, pointed out
this “significant increase has occurred despite record
scrapping by the Greeks in 2016”.
At the same time, “large Greek owners are becoming
larger and younger as they are better able to take
advantage of poor markets and low asset prices”, said
Petropoulos, adding, “indeed, the very young fleets also
continue to rise, a sign of commitment from Greek
owners towards modern ships”.
“Greek owners have performed well compared to their
rivals as Japan, China and Germany saw their annual rate
of growth decline in 2016,” noted Petropoulos.
Average age of the fleet stands at 12.19, compared to
14.7 years in 2012. Using a 20,000 dwt cut-off, the
average age of the fleet has fallen to 8.39 years, from
9.83 in 2013.
The dry bulk fleet of vessels over 20,000 dwt has gained
111 vessels, its age is down to 8.13 years, its tonnage is
up by 7.2m dwt and is run by the same number of
companies.
The large container fleet of vessels over 20,000 dwt has
become marginally younger, 9.34 years old from 9.38
years in 2015, despite the fact that this sector
traditionally shows a slow rate of renewal. In 2016 it has
grown substantially and has gained a further 7.7m dwt
to 25.3m dwt and the number
of vessels is up from 274 in 2015 to 381 in 2016. The
companies that run these vessels are up one to 32.
The tanker fleet of vessels over 20,000 dwt shows a
marked increase in dwt terms of 14.6m in the past 12
months to 131.6m dwt compared to the 2015 increase
of just 220,751 dwt. The number of vessels is also
significantly up by 43 to 851. This sector’s companies are
down by three and age wise there
was a marginal drop to 9.35 years average from 9.49
years in 2015.
The most striking expansion is seen the LPG sector with
this fleet almost doubling in size and its age dropping
from 11.5 to 4.2 years. Petrofin comments: “This
amazing development becomes even more marked
when we observe the over 20,000 dwt LPG statistics:
Vessels are up from 26 to 66, tonnage is up by 150% and
the age is down from 13.69 years of age to 4.33.
“Further, the LNG fleet is showing an internal reshuffle,
where the same number of vessels are now 12.5%
bigger.”
The survey points out the investment in upgrading and
expansion has been “massive” investment has not paid
off, as most sectors remain fundamentally weak.
However, it is too early to opine as to the overall future
investment performance of Greek shipping and whether
Greek owners shall be able to maintain the current
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News AbstractsDry Bulk Terminals Group – January 2017 – Issue 164growth momentum. Nevertheless, their track record has
shown that Greek owners timed purchases and disposals
well and remain true intuitive entrepreneurs,
Petropoulos concluded.
Uni-Asia bulk carrier collides with fishing boat, two dead – SMN Jan 11th
Uni-Asia Holdings has informed that one of its bulk
carriers had collided with a fishing boat in South Korean
waters on 11 January, leading to the capsize of the
fishing boat and death of the two boat crew.
The incident happened near port of Pohang, South
Korea when the 37,706-dwt bulk carrier MV Inspiration
Lake was en route to Nakhodka, Russia.
“The incident resulted in the capsize of the fishing boat
and sadly two of her crew have lost their lives,”
Singapore-listed Uni-Asia said.
“One crew member has been rescued whilst a search for
the remaining four crew members of the fishing boat is
currently ongoing,” Uni-Asia stated.
The vessel Inspiration Lake is owned by Regina Bulkship,
a 51% subsidiary held through Uni-Asia Shipping, wholly-
owned by Uni-Asia.
Uni-Asia is currently investigating the cause of the
collision and has confirmed that there was no oil leakage
arising from the incident.
The Korean navy and Korean coast guard have arrived
on site to coordinate the rescue operation.
A shaky start for the dry freight market – SMN Jan 13th
After an optimistic start during the first week of 2017,
the freight rates seem to slip into its old self again
recording a string of losses this week. Suddenly, the
feeling of uncertainly began to creep into the market,
raising doubts if the rate corrections are going to be a
norm or just another part of the seasonal lull?
Capesize rates in particular are suffering from the lower
iron ore exports volumes from Brazil as well as from
lower bunker prices. Currently, more ship-owners prefer
to fix shorter voyage route from Western Australia-
Qingdao iron ore route as compared to the longer
shipments from Brazil.
Moreover, the seasonal lull or the slow-down of
construction activities in China has more or less “froze”
iron ore demand as harsh winter descended upon the
country. Thus, the average spot charter rates had
reclined to $9,468 on Wednesday, down almost 12%
since the start of the week at $10,732.
In the meantime, the iron ore inventory in Chinese ports
has also increased considerably this week to a two-
month high of 112.95m tonnes. The surge in stockpiles
was due to the clearing of smog in ports which gave
much better visibility for vessels to unload cargoes at
terminals. However, it was heard that there is still a
backlog of vessels waiting to be unloaded at the Chinese
ports coming mainly from the Australian miners.
Panamaxes in contrast, haave become the darlings of
the market after the downfall of capesizes. The freight
rates of Panamax has inched upward steadily from
$7,400 before ending at $8,148 or up 10% on 11 January
2017.
Despite the good run, one FIS FFA broker remarked that
“the tone remains cautiously optimistic” as the market
lacks of clear direction. Perhaps this cautious attitude
had shrugged off from the decline of the Baltic dry index
(BDI) during the week.
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News AbstractsDry Bulk Terminals Group – January 2017 – Issue 164
On Wednesday, the BDI had toppled from the 900 mark
and stumbled to 894 points after a day-on-day drop of
32 points. With the fragile BDI, one wondered if the
index will repeat history again with a sharp drop to all-
time low of 290 points on 10 February 2016, just after
Lunar New Year day.
However, the sharp fall in rates is deemed unlikely for
2017 as the Lunar New Year started ten days earlier
from the previous year at 28 January 2017. Besides, the
freight market is often mirrored a marathon; slow start
at the beginning before picking up paces later.
With a better stronger footing as compared to 2016,
let’s hope that the freight market will finish the
“marathon” in a triumphant style and head toward an
overall recovery.
Port of Dunkirk reveals hub ambitions – SMN Jan 19th
Dunkirk, France’s third busiest port, has released strong
traffic results for 2016, confirming its ambition to
become a multi-traffic hub for northern France and
beyond.
Total traffic totalled 46.7m tonnes, a 0.3% year-on-year
rise – more impressive than it might seem because the
2015 figure had been inflated by a large amount of ro-ro
traffic displaced from neighbouring Calais owing to
industrial action and migrant unrest at that port.
Broken down by separate traffics, containers rose 7% to
341,000 teu, coal by 6% to 5.4m tonnes, other solid
bulks by 9% to 2.4m tonnes, and liquid bulk by 2% to
4.3m tonnes. Grains were down 8% to 2.8m tonnes -
because of France’s very poor harvests last year - while
ro-ro dropped even greater in volume by 2% to 16m
tonnes, described by the port as "a rebalancing to
normal after the extraordinary result in 2015 but still
very satisfactory."
Announcing the results at a press conference in Lille,
Grand Port Maritime de Dunkerque (GPMD) ceo Stéfane
Raison said the port did not merely wish to “defend
existing markets but also target new ones.” In particular,
Raison pointed to the start-up of LNG shipments into the
port, as well as expansion of the existing container
terminal plus launch of a public consultation on the
building of a new one.
The port’s chief commercial officer Daniel Deschodt
detailed to Seatrade Maritime News how the existing
Flanders Terminal, is operated by an eponymous
company controlled by Terminal (owned 51% by CMA
CGM Group and 49% China Merchants Holdings
International) with quay length of 1.2 km and water
depth up to 16.5 m.
The expansion project, to be ready by end-2018, will add
another berth of 400 m adjacent to the existing one,
allowing the simultaneous berthing of two Ultra Large
Container Ships rather than only one at present, and
raising capacity from 650,000 teu to 900,000 teu.
After that a public debate will be launched in
September, he continued, into the digging of a new
basin inland of the existing Flanders Terminal. A new
terminal located there could be gradually phased in over
the period 2020-2040, growing port capacity to an
eventual 3.5m teu.
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News AbstractsDry Bulk Terminals Group – January 2017 – Issue 164Container traffic is certainly on the increase, Deschodt
said it is expected to reach 400,000 teu this year, which
would represent highly impressive 17% growth.
Cooperation with French rail operator SNCF was also on
the increase, he added, fuelling Dunkirk’s ambitions to
become an important multimodal hub for the
surrounding Hauts-de-France region – also including the
ports of Calais and Boulogne, specialising in passenger
ferry traffic and fish processing respectively – and
beyond.
Dry bulk freight market: Play up, play up and play the game – SMN Jan 19th
After a rocky start, the freight market has set off for a
campaign of recovering lost ground in 2017, in the
process regaining some of the glory seen in the latter
half of 2016.
Along the way, market optimism pushed aside waves of
doubts as the ‘main engine’ of freight rates roared into
life. And let’s hope there are no speed bumps to stop
the freight rate charge towards a promising year.
During the week, the Baltic Dry Index (BDI) snapped
back to 952 points from the sub-900 level last week,
partly influenced by a rally pre-Lunar New Year of
restocking.
Meanwhile, the iron ore market being true to its
daredevil status, had once again baffled market
expectation and went passed $80 per mt mark. The
commodity had traded in the range of $81-83 per mt for
days in defiance to many banks’ prediction of lower
asset prices.
But iron ore was not alone in the rally, its steel-making
partner, coking coal has also garnered much Chinese
buying interest after prices for seaborne cargoes
dropped lower than domestic alternatives.
The low price attracted the attention of many China-
based mills to import seaborne coking coal cargoes
either for replenish inventory or for speculating trading,
boosting tonne-miles in return.
“Right from the start there was a positive feel around
the market as the larger sizes got off to a flying start,”
commented an FIS FFA broker. He also observed that
this positivity had extended to the stability of freight
rates in smaller vessel sizes in the supramax market.
“Supramax physical seems to be steady now, finding
balance in the Atlantic and possibly seeing signs of
better demand.”
As such, capesize rates enjoyed a good run of
incremental gains during the week before peaking at
$12,512 on Wednesday, up 14% as compared to the
start of week rates at $11,002. supramax rates however
traded at $6,446 by Wednesday, relatively similar to its
starting position of $6,550 on Monday.
So it seems that freight rates are doing well in the game
of catch-up if not making great strides yet. There is some
way to go to achieve its former zenith of 11,793 points
but at least there is a steady crawl toward last year’s
peak – so until then, the freight markets will play up,
play up and play the game.
Russian ice breaker and bulker duo forced to stay for winter in the Arctic – SMN Jan 25th
An ice breaker and two bulk carriers are being forced to
wait out the winter off Russia’s Arctic coast after the ice
became to thick for safe navigation.
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News AbstractsDry Bulk Terminals Group – January 2017 – Issue 164
The ice breaker Kapitan Dranitsyn and two bulk carriers,
Sinegorsk and Iogann Makhmasta, are being forced to
stay for the winter Chukotka anchorage outside the port
of Pevek, according to Russian news site PortNews.
The port which is on the North Sea Route that connects
Europe to Asia during in the summer months, normally
closes in November for the winter, however, it had
remained open for the supply of materials for building
the floating nuclear power plant Akademik Lomonosov.
A convoy comprising ice breakers Kapitan Dranitsyn and
the two bulkers arrived in Pevek on 7 January and left
the port on 13 January but faced a barrier of heavy ice at
the exit from the Chaunskaya Guba bay.
FSUE Rosmorport said the two ice breakers could have
broken through the four – five mile ice barrier there was
risk of damage to the two Arc 5 ice class bulkers.
“It is not an emergency situation. Winter anchorage is a
positive practice to prevent incidents associated with
severe ice conditions,” a statement from FSUE
Rosmorport said.
The vessels are set for a lengthy stay with the summer
navigation period not expected to start until late May –
early June.
US infrastructure: Duelling lists of projects, and an uncertain future for cargo flows – SMN Jan 27th
Infrastructure was the talk of the day, one week into the
Trump Administration, with shares of Aecom a
construction and engineering company that frequently
sponsors American Association of Port Authorities
(AAPA) events, among the week’s best performers as
equity markets roared to new heights.
Its shares have now topped price levels seen in the
Trump Bump immediately after the election in
November 2016. Like all else with President Trump,
everything is “nuanced”, a polite way of hinting at the
need to look at multiple points of view in order to
determine what’s happening, and why.
During 2016, both the Republican Trump and his
Democratic opponent, Hillary Clinton had both made
“infrastructure” a campaign issue, though it got
drowned out by cyber things like emails and data hacks.
So, in the week after the crowd-filled Inauguration, the
Democrats came out loudly trumpeting their alternative
$1trn plan, which includes circa $65 -$70bn for seaports,
inland waterways and airports over a 10 year timeframe.
Simultaneously, the Republicans were sending around a
list of prioritized projects, which included port work at
Savannah, Port Newark and inland waterway work on
the Illinois, Ohio and Monongahela Rivers, besides work
done on the Mississippi River near the Port of New
Orleans. The Democrats would seek to fund their
programme, with specific projects not yet announced,
by tightening up existing tax loop-holes- but with the
Government spending the money; the Republican
approach would see tax credits to private developers
(further increasing the deficit).
But what if they built all the new port infrastructure, and
less cargo than forecast came? Even though sea ports
would clearly gain funding, the impacts of Trump trade-
related policies on actual shipping tonnages at
deepwater ports are anybody’s guess. In New York’s
main container ports, at Port Elizabeth and Port Newark
both on the New Jersey side of the harbour, channel
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News AbstractsDry Bulk Terminals Group – January 2017 – Issue 164dredging to 50 feet finished last year and the raised
Bayonne Bridge will eliminate air draft restrictions in late
2017.
But businesses headquartered in New Jersey, bolstered
by anti-Trump rhetoric from local academics, have
expressed concern about the impact of tariffs on
containerised import cargo that has been projected to
arrive on containerships from China. Consider another
aspect of the muddied trade picture.
President Trump’s fresh endorsement of the Keystone
Pipeline, tabled by his predecessor, comes with the
requirement that the pipeline’s steel must be US
produced. Yet also look at the just opened dry bulk
terminal at Paulsboro, New Jersey near Philadelphia at
the site of a one-time BP tank farm, where a handymax
is expected to bring in the first inbound cargo- a
boatload of steel produced by the Russian steelmaker
NMLK, which has leased space at the new terminal.
Planning for the terminal, run by the Holt family,
dynastic in Philadelphia region’s stevedoring, began well
before the election. But, like other parts of the business,
long lived assets don’t always match up with shorter
term realities.
One third of vessels calling Gothenburg in 2016 got a green discount – SMN Jan 18th
One third of vessels that called at the Port of
Gothenburg last year received an environmental
discount.
Some 75 vessels calling at the Swedish port received a
10% environmental discount on port dues last year
compared to 41 in 2015, an increase of 83%.
“The growing number of vessels classified as green is
highly encouraging. They are also vessels that call at the
port on a regular basis,” said Edvard Molitor,
environmental manager at the Port of Gothenburg.
For vessels running on LNG there are further discounts
of up to 30%.
The LNG powered vessels Ternsund and Fure West,
owned by Donsö-based shipping companies Tärntank
Ship Management and Furetank both received 30%
discounts last year when they called Gothenburg port.
The discount is based on two separate environmental
indexes, Environmental Ship Index (ESI) and Clean
Shipping Index (CSI). Vessels that have a score of at least
30 according to ESI, or which are classified as green
according to CSI, receive a 10% discount on the port
charges.
Wartsila sees marine business remaining soft, order intake down 20% in 2016 – SMN Jan 27th
Engine maker and marine equipment supplier Wartsila
forecasts a soft demand outlook for its marine solutions
business following a 20% drop in order intake in 2016.
Wartsila said the order intake for its marine business by
20% to EUR1.29bn compared to EUR1.6bn a year earlier.
However, it saw a sharper decline in new orders in the
fourth quarter of 2016 down 45% at EUR258m
compared to EUR465m in the corresponding period a
year earlier.
“The weak growth in seaborne trade, low oil and gas
prices, as well as customers’ financial constraints
burdened the marine industry throughout the year,
which resulted in exceptionally low contracting activity,”
commented Jaakko Eskola CEO of Wartsila.
The Finnish company was able to largely retain its
market share with a 51% share in the medium-speed
engine market in the fourth quarter compared to 50% in
the previous quarter, while its share in auxillary engines
10www.drybulkterminals.org
News AbstractsDry Bulk Terminals Group – January 2017 – Issue 164was 18% in the fourth quarter compared to 16% in the
preceding quarter.
CEO Jaakko Eskola
Overall its marine solutions business orderbook declined
by 21% year-on-year to EUR2.02bn.
Wartsila is cutting 550 jobs mainly related to engines
and R&D in Finland, a process it said was proceeding as
planned.
“Wartsila’s aim is to continuously pursue more cost
efficient ways of operating and align its operation to
market conditions. In this context, local actions in the
marine solutions business are expected to result in
additional savings of approximately EUR45m,” it said.
Looking ahead the company expects the marine
business to remain soft in 2017. “Although the outlook
for the cruise and ferry segment is positive, the
merchant, gas carrier, and offshore segments continue
to suffer from overcapacity, slow trade growth and
customers’ financial constraints,” it said.
IMO launches World Maritime Day 2017 theme – SMN Jan 19th
IMO secretary-general Kitack Lim launched the theme
for World Maritime Day 2017, “Connecting ships, ports
and people” at the Port of Felixstowe on Wednesday.
The theme is designed to highlight coherent and
connected efforts across the industry.
“Throughout the year, we will highlight the importance
of ‘joined-up’ maritime development across all sectors,
both from a policy and a practical perspective. The
benefits of a free and efficient flow of goods and trade
extend far beyond the ships and ports themselves,” Lim
said.
“As a UN agency, IMO has a strong commitment to
helping achieve the aims of the Sustainable
Development Goals. Shipping and ports can play a
significant role in helping to create conditions for
increased employment, prosperity and stability through
promoting maritime trade,” he added.
The theme was launched by Lim during a visit to Britian's
busiest container port Felixstowe.
“We are delighted to welcome Mr Lim and to support
the IMO in the important work it does to maintain and
improve standards across the international shipping
industries,” said Clemence Cheng ceo of the Port of
Felixstowe and md of Hutchison Ports Europe.
During the tour of the port Lim witnessed its operations
first hand and spoke to the crew of the Munkebo
Maersk.
Lim is no stranger to the port industry having been the
head of Busan Port Authority prior to taking up the role
of secretary-general of the IMO.
IMO sec-gen takes Europe to task on uniltateral emissions regulation plan – SMN Jan 10th
IMO secretary-general Kitack Lim has written to top
officials in Europe warning that the decision to include
shipping in the European Union’s Emission Trading
System (EU-ETS) could “seriously impact” the UN body’s
work to reduce greenhouse gas (GHG) emissions by the
industry globally.
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News AbstractsDry Bulk Terminals Group – January 2017 – Issue 164
Kitack Lim
In the letter addressed to - Martin Schulz, President of
the European Parliament, Jean-Claude Juncker,
President of the European Commission, and Donald Tusk
President of the European Council – Lim cautioned
against including ships in the EU-ETS.
“I am concerned that a final decision to extend the EU-
ETS to shipping emissions would not only be premature
but would seriously impact on the work of IMO to
address GHG emissions from international shipping.
Inclusion of emissions from ships in the EU-ETS
significantly risks undermining efforts on a global level,"
Lim said in the letter.
In December the European Parliament Environment
Committee voted to include shipping in the EU-ETS by
2023 if there is no global agreement under IMO for
operation by 2021.
In October last year the IMO adopted mandatory, global
system, for collecting data on ships’ fuel-oil
consumption part of a three step approach to decide if
further measures were necessary to reduce GHG
emissions. It also has a “roadmap” for developing a
comprehensive strategy on reduction of GHG emissions
from ships, with a view to being adopted in 2018.
Lim noted these measures had been agreed by member
states of the IMO, including EU member states, and said
they demonstrated both the UN body’s leadership and
role and also the only body that can achieve the
necessary political cooperation of all governments.
“Such political cooperation is important to ensure that
all countries act together to ensure that no one is left
behind,” he said in the letter.
The IMO has long campaigned against unilateral
regulation by individual states or regional groupings.
Lim said that, in his view, unilateral or regional action
that conflicts with or undermines actions that have been
carefully considered and deliberated by the global
community at IMO threatens world-wide confidence in
the consistent, uniform system of regulation developed
by IMO.
Shipowner representative bodies such as the European
Community Shipowners Association (ESCA), the
International Chamber of Shipping (ICS), and the Danish
Shipowners Association (DSA) have all warned against
the inclusion of shipping in the EU-ETS.
But not all parts of the industry are in agreement and
the Port of Rotterdam described the IMO’s plans on
GHG as “not challenging enough” and called on the
European Parliament to put pressure on the IMO.
Kidnappings at sea hit 10-year high in 2016 despite fall in piracy: IMB – SMN Jan 10th
Kidnappings at sea hit a 10-year high in 2016 despite
piracy attacks as whole falling to their lowest level since
1998, according watchdog the International Maritime
Bureau (IMB).
Last year saw a tripling in the number of seafarers
kidnapped for ransom by pirates with a surge in such
attacks in the Sulu Sea between East Malaysia and the
Southern Philippines.
According to the IMB pirates kidnapped 62 seafarers in
2016 in 15 separate incidents. West Africa remained a
hotspot for kidnappings with 34 of the 62 kidnappings
taking place in the Gulf of Guinea, but it is the sharp rise
in such attacks off Malaysia and Philippines that has
drawn particular concern.
There were12 crew members kidnapped from three
vessels in the Sulu Sea in the last quarter of the year.
“The kidnappings in the Sulu Seas between eastern
Malaysia and the Philippines are a particular concern,”
said Potengal Mukudan, director of the IMB’s Piracy
Reporting Centre.
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News AbstractsDry Bulk Terminals Group – January 2017 – Issue 164
IMB said it advises charterers and owners to consider
avoiding the Sulu Sea by routing vessels West of
Kalimantan. Mukundan said shipowners should avoid
high risk area.
“Shipmasters should follow the latest best management
practices and where possible take early action to avoid
being boarded. They should inform the IMB PRC or
regional counter piracy centres for help and advice,” he
said.
There was also an increased use of guns in attacks with
48 reports of the use of guns in 2016 compared to 33 in
the previous year.
Overall though the number of piracy attacks globally
dropped to an 18 year low with 191 attacks compared to
246 in 2015.
“The continued fall in piracy is good news, but certain
shipping routes remain dangerous, and the escalation of
crew kidnapping is a worrying trend in some emerging
areas,” commented Mukundan.
'Very serious concern' over kidnapping of seafarers in Southern Philippines: ReCAAP – SMN Jan 13th
ReCAAP Information Sharing Centre has very serious
concern over kidnap for ransom attacks in the Southern
Philippines, despite a 58% drop in piracy and armed
robbery attacks in Asia as a whole in 2016.
The terrorist group Abu Sayaaf started attacking
commercial vessels in the Sulu-Celebes sea area in
March last year and successfully kidnapping crew from
10 vessels, with a further six unsuccessful attacks.
Masafumi Kuroki, executive director, told a media
briefing on Friday: “We have a very serious concern over
abduction of crew which started in March and
continues.”
Prior to the first kidnapping incident in March there had
Kuroki said there had been no similar attacks reported in
the area in the 10 years that ReCAAP has been in
operation.
In total some 48 seafarers were taken hostage in the
area last year and 33 have since been released. Kuroki
was unable to say if shipping companies had paid
ransoms for the release of the kidnapped crew, although
this would seem the likely scenario.
In a worrying trend for international commercial
shipping the kidnappers have moved away from
targeting small, slow moving vessels such as tugs and
barges and fishing boats to all types of ships.
Of the 10 successful attacks, five were against tugboats,
three against fishing vessels, one on a bulker and one
general cargoship.
The six attempted attacks were against five bulkers and
one product tanker. Six attacks in November alone were
all against large sized, oceangoing commercial vessels,
prompting ReCAAP to send out a warning to
international shipping.
Kuroki believes the shift was possibly due to warnings to
small shipowners in East Malaysia, which resulted in
them making their vessels more secure.
The attacks take place in daylight and the perpetrators
are usually had firearms.
ReCAAP advises shipowners and managers to re-route
their vessels to avoid the Sulu-Celebes sea area, which
many bulkers heading from Australia to North Asia
normally transit.
Kuroki was unable to say if owners were heeding the
warning steer clear of the area, which would result in
longer transits and higher costs.
13www.drybulkterminals.org
News AbstractsDry Bulk Terminals Group – January 2017 – Issue 164But it was not all bad news in 2016. The number of
vessels to steel oil cargoes dropped to three last year in
Asia compared to 12 in 2015. There was also an
extremely sharp drop in the number of attacks in the
Straits of Malacca and Singapore from 104 in 2015 to
just two last year. ReCAAP credits this sharp drop to the
arrest of perpetrators and coordinated patrols by the
littoral states.
Bimco warns on slower dry bulk scrapping in H2 2016 – SMN Jan 3rd
Dry bulk shipowners need to accelerate the scrapping of
older tonnage from the second half of 2016 to see
continued recovery in the sector.
In review of the market Bimco analyst Peter Sand said
that for 2017 it was “vitally important that shipowners
handle the supply side of the market with great care”.
The dry bulk market recovered in the latter part of 2016
from an all time low of the Baltic Dry Index (BDI) of 290
points on 10 February to a high of 1,261 points by mid-
November. While this recovery was largely driven by
demand for capsize ships from China Bimco flagged
concern over the slowing in scapping volumes by owners
in the second half of 2016 and the negative impact this
could have on the market if it continues into 2017.
“A continuance of the alarmingly low level of demolition
activity in the second half of 2016 simply will not deliver
the needed zero fleet growth,” said Sand.
With a “significant number” of new ships on order for
delivery in 2017 and 2018 some 30m dwt of scrapping
annually was required for zero fleet growth.
“This is not a tall order in theory, but the slowdown in
scrapping seen since June 2016 causes alarm bells to
ring,” he warned.
Bimco expects the supply-side to grow 1.6% in 2017
compared to an estimated 2.2% in 2016.
Predicting the unpredictable – Moore Stephens on shipping in 2017 – SMN Jan 5th
Moore Stephen’s partner Richard Greiner predicts that
oil prices will continue to rise, there will be more calls to
scrap ships, and the costs of meeting regulatory
requirements will become clearer in 2017.
Looking to 2017 Greiner noted that making predictions
about shipping was about as volatile as the industry
itself. “Who, for example, predicted that the Baltic
Exchange would be sold to Singapore?”
“Predicting shipping’s fortunes in 2017 is as precise a
science as foretelling the English weather. But some
things are at least more likely to happen than not,” he
said.
“Oil prices should continue on an upward trend on the
strength of the recent OPEC production cuts.
“Calls for higher levels of ship demolition will increase
significantly, although not ship demolition itself.
“The cost of meeting regulatory requirements will
become clearer as the industry and its financiers grapple
with the financial consequences of having to burn lower-
sulphur bunker fuel whilst ensuring that their ballast
water management systems are fit-for-purpose” Greiner
forecast.
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News AbstractsDry Bulk Terminals Group – January 2017 – Issue 164
Richard Greiner
He also said that more newbuildings would be ordered
or some shipyards would go bankrupt, freight rates
would struggle to reach levels that allow commercial
viability, and consolidation would remain key for
container shipping. Cyber-security would also move
higher up the agenda.
As to what will not happen Greiner stated: “Things that
will not happen in 2017 include another major fall in oil
prices, and a big increase in hull insurance rates.
Leicester City will not win the Premier League.”
Santa Marta tops BIMCO port performance report – PS Jan 11th
Port performance: The BIMCO Dry Bulk Terminals
Vetting Report 2016 wants to improve standards and
give guidance to shipowners
BIMCO has published its first report on global dry bulk
terminal performance which puts Santa Marta in
Colombia at the top of the table when it comes to
feedback from shipowners.
The BIMCO Dry Bulk Terminals Vetting Report 2016 aims
to drive the improvement of standards for ships at dry
bulk terminals across the world and give port call
guidance to shipowners.
Aron Sørensen, head of maritime technology and
regulation at BIMCO, said: “The dry bulk vetting scheme
makes it possible for companies to compare terminal
performances by using actual experiences provided by
the crew of the bulk carrier.”
The BIMCO dry bulk terminal data was collected in the
period from 19 January 2015 to 1 December 2016 with
94 ships providing 443 reports from 231 different
terminals around the world.
The 15 terminals with more than five ratings were
ranked in order of their performance putting Santa
Marta at the top of the table, with Bilbao in Spain and
Port Alfred in Canada coming in second and third place.
Although the report is an interesting perspective from
shipowners, BIMCO said that to date there is insufficient
data to draw solid statistical conclusions and make
substantiated statements on dry bulk terminals and
their performance. Nor can it express anything definite
with regards to trends and details.
The report does indicate a general high standard of dry
bulk terminals though with a good or excellent overall
performance especially with regards to performing
loading and unloading and the quality of the terminals
and equipment. Communication between ship and
terminal, as well as the exchange of information, was
also found to be satisfactory.
There were a few areas with room for improvement.
BIMCO said that some terminals should improve the
language skills of the terminal personnel communicating
with the ship’s crew. Terminals should also consider the
cost of services such as garbage removal and fresh water
supplies as in several cases they were found to be
excessive. The most severe observation in the survey
was that some terminals did not provide Emergency
Procedure Notices for ships berthed.
BIMCO is now calling for more shipowners to submit
feedback in order to improve the service and form more
robust analysis for next year’s report.
The report is free of charge and available for download
from BIMCO
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News AbstractsDry Bulk Terminals Group – January 2017 – Issue 164
Konecranes acquisition of Terex MHPS complete – PS Jan 5th
Konecranes can now offer a much wider product and
service range Konecranes has completed the acquisition
of Terex Material Handling and Port Solutions (MHPS).
Together the two companies will build on becoming
more technology-focused, the combined company will
have more R&D resources, introduce new products and
engineering solutions as well as further enhance its
service offering.
A Konecranes statement following the announcement
read: “Automation technology is one of our key focus
areas. Here our offering covers automated stacking
cranes (ARMGs and ARTGs), automated straddle
carriers, automated guided vehicles (AGVs) and lift AGVs
for automated container handling.”“Our software and
process knowledge is the widest and deepest in the
industry, bringing the best out of the customer’s
terminal and integrating the container handling fleet,
manual or automated, seamlessly in the terminal’s
operations.”Combined the company’s global presence
will reach of 50 countries with over 18,000 employees.
Konecranes now has three business areas; service,
industrial equipment and port solutions. With the port
solutions business being headed by Mika Mahlberg,
executive vice president.Konecranes’ expanded product
portfolio for port now includes Konecranes Gottwald
mobile harbour cranes, Konecranes Noell STS and RTG
cranes, horizontal transport for container terminals, and
Konecranes liftace lift trucks. The statement concluded:
“Technology is also a strong focus in our lift truck and
mobile harbour crane product lines. We recently
introduced eco-efficient, hybrid reach stackers and
connectivity that makes our Lift Trucks smarter, giving
customers real-time information for improving
operations.”“We have introduced new mobile harbour
crane variants to meet changing customer needs, and
we continue to fit them with the latest three-phase
drive technology for higher productivity and easier
maintenance.”
PRESS RELEASE
CARGOTEC CORPORATION, TRADE PRESS RELEASE, 24 JANUARY 2017, 11 AM (EET)
Siwertell, part of Cargotec, has secured an order from
Beijing-based Shenhua Logistics Group Corporation Ltd
for two rail-mounted ST 790-D screw-type unloaders.
The unloaders are destined for use by Suizhong Power
Generation Co Ltd and will support the company's
power plant expansion plans in Qiansuo, Suizhong
County, China. The order has been booked into
Cargotec's 2016 third quarter order intake and the
delivery is scheduled for March 2018.
"The customer chose Siwertell's totally-enclosed screw-
type technology because it needed to provide a clean,
efficient operation with minimal environmental impact,"
said Ola Jeppsson, Siwertell Sales Manager.
The Suizhong power plant currently receives most of its
coal by rail, sourced from Shenhua's own coal mines.
The expansion plans include building a new jetty to
increase coal deliveries arriving by sea. The unloaders
will discharge coal from vessels of up to 50,000 dwt at a
rated capacity of 1,500t/h for each unloader.
"Having identified the technology it wanted, Suizhong
turned to Siwertell because we are the leading supplier
of this type of unloader. We have an excellent
reputation throughout the dry-bulk handling industry for
reliability, high efficiency, impressive through-ship
capacity and very clean, safe operations.
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News AbstractsDry Bulk Terminals Group – January 2017 – Issue 164
"The light weight of our machines minimises the loads
on the jetty; in consequence our customer will benefit
from significant savings in jetty construction costs,"
added Mr Jeppsson.
The unloaders will be fully assembled at Siwertell's sub-
contractor's premises in Nantong, China. The units will
then be shipped by specialist vessel to the Suizhong
power plant, where they will be unloaded onto rail
tracks installed on the new jetty.
The unloaders will be handed over to their owners
following performance tests and final commissioning.
Clarkson commentaries – DBTO (Volume 23, No 1 – January 2017)Dry Bulk Supply & Demand Highlights
2016 was very challenging for bulkcarrier owners, with
earnings dropping below $4,000/day and the BDI
reaching a record low of 291 points early in the year.
While the demand picture improved in 2H 2016, full
year bulker earnings still averaged only $6,218/day,
which was the lowest level since 1999. Earnings in
December were also relatively muted, averaging
$8,901/day.
Bulker owners responded to depressed market
conditions in 2016 with supply-side measures, including
firm demolition and a sharp drop in newbuilding
interest. The bulkcarrier fleet expanded by 2.3% in dwt,
the slowest pace of growth since 1999, while the
bulkcarrier orderbook shrank to a 10-year low of 86m
dwt by the end of the year. However, fleet expansion
still marginally outpaced dry bulk trade growth in 2016,
thereby contributing further to oversupply pressures.
Global seaborne dry bulk trade grew 1.2% to around
4,880mt in 2016, compared to an average growth rate of
5% pa. in the preceding five years. While Chinese dry
bulk imports increased at an unexpectedly firm rate of
6% in 2016, driven by a record 1bn tonnes of iron ore
imports, global seaborne dry bulk trade growth was
hampered by a decline in import demand in other key
markets. Indeed, a 20% drop in European coal imports
spearheaded a second consecutive annual decline in
global seaborne coal trade to 1.1bn tonnes in 2016.
Firm Chinese import demand is currently expected to
continue into 2017, supporting projected dry bulk trade
growth of around 2.1%. Meanwhile, continued firm
demolition levels could help to limit bulkcarrier fleet
growth to below 2%. However, while this could help to
start to absorb some excess capacity, any subsequent
improvements in market conditions appear likely to be
limited, given the scale of existing overcapacity in the
sector in the still relatively subdued pace of demand
growth. Overall, a shift in fundamentals, with a
sustained period of conservative fleet expansion and
healthy trade growth still looks to be required to
support a better dry bulk market balance.
Seaborne Iron Ore Trade
Commentary
Global seaborne iron ore trade is estimated to have
grown 4% to around 1,418mt in 2016, driven by a 7%
rise in Chinese seaborne iron ore imports to a record
1bn tonnes. Firm Chinese import activity is estimated to
have offset a drop in iron ore shipments into most other
major importers. EU seaborne iron ore imports are
estimated to have dropped 2% to around 107mt in full
year 2016, partly reflecting the impact of depressed
steel prices and firm competition from imported Chinese
steel products on steel manufacturers in the region,
especially in 1H 2016. Elsewhere, while Japanese iron
17www.drybulkterminals.org
News AbstractsDry Bulk Terminals Group – January 2017 – Issue 164ore imports are estimated to have remained static in
2016, total Asian seaborne iron ore imports (excluding
China) are estimated to have declined 3% to around
242mt, driven by a drop in shipments into South Korea
and Taiwan. Looking ahead, global seaborne iron ore
trade is projected to grow 4% to around 1,471mt in
2017, reflecting expectations of the increasing
availability of competitively priced iron ore supply,
especially from Brazil and Australia.
Iron Ore News
Chinese iron ore imports stood at 89mt in December
2016, down 3% m-o-m. Nevertheless, the volumes
imported in December still contributed to a 7% rise in
total Chinese iron ore imports to a record 1,025mt in full
year 2016, while the country’s seaborne iron ore
imports reached 1,008mt. For a detailed analysis of
China’s record breaking performance in 2016, see this
month’s Commodity Countdown (back page).
Continued firm Chinese iron ore import demand saw the
benchmark 62% FE CFR Qingdao iron ore spot price hit a
27-month high of $84/tonne in mid- January, which was
up 50% from late September 2016. Higher iron ore price
levels are expected to provide short-term financial
support to even the
higher cost, small iron ore miners, few of which have a
reported break-even point exceeding $50/tonne.
Brazilian seaborne iron ore exports rose 2% to 370mt in
2016. This was driven by shipments to China, which rose
16% to 215mt, accounting for 58% of Brazil’s total iron
ore exports in the year. The rise was also supported by
Vale’s programme of increasing output, which is set to
continue in 2017. The company shipped the maiden iron
ore cargoes from its S11D project in January 2017 and
output at the mine is expected to increase towards a
rate of 90mtpa in the coming years. This, combined with
the potential resumption of Samarco’s output, is
expected to support an 8% rise in Brazilian iron ore
exports to 400mt in 2017.
Australian iron ore exports are estimated to have risen
5% to around 804mt in 2016. This was supported a
ramp-up in production among the major iron ore
miners, as well as the addition of Roy Hill output. Roy
Hill is expected to achieve a production rate of around
55mtpa in early 2017 and contribute to a 3% rise in
Australian iron ore exports to total around 829mt in
2017.
Seaborne Coking Coal Trade
Commentary
Global seaborne coking coal trade is estimated to have
dropped 1% to a four year low of 246mt in 2016. This
was largely driven by a relatively sharp decline in
European coking coal imports, with shipments into the
EU down 9% to around 34mt, largely due to the impact
of pressure on steel manufacturers from low steel prices
and the region’s firm steel products imports in 1H 2016.
Meanwhile, steel producers in India and South Korea
also came under pressure in 2016, contributing to a 2%
and 3% decline in seaborne coking coal imports into the
respective countries. However, an increase in Japanese
and Chinese seaborne coking coal imports saw total
coking coal shipments into Asia increase 1% to 180mt in
the period. Looking forward, global seaborne coking coal
trade is currently projected to increase 1% to around
248mt in 2017. This reflects expectations of a slower
decline in European import demand, with current
projections indicating a marginal drop to around 34mt.
Meanwhile, coking coal shipments into Asia are forecast
to increase 2% to around 183mt in 2017, with continued
support from growth in Chinese and Japanese imports.
Coking Coal News
Chinese seaborne coking coal imports grew 1% y-o-y to
33mt in January-November 2016. This was
supported by a 1.5% rise in the country’s steel
production, combined with Chinese coal output cuts.
Chinese domestic coking coal output is estimated to
have dropped 11% y-o-y to 0.4bn tonnes in the first
eleven months of 2016. Looking forward, Chinese
seaborne coking coal import growth is highly
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News AbstractsDry Bulk Terminals Group – January 2017 – Issue 164dependent on government policy regarding domestic
coal output. For the time being, the country’s coking
coal imports are expected to be supported by continued
firm levels in the country’s steel output. Furthermore, in
January 2017 Beijing revised the country’s metal
processing guidelines, prohibiting the sale of scrap to
induction furnace-based steel producers. This is
expected to support the country’s raw steel output and
coking coal import demand. Overall, current projections
indicate a 3% rise in Chinese coking coal imports to 38mt
in 2017.
Coking coal spot prices were boosted by Chinese
imports in 2H 2016, with the FOB Australian hard
coking coal spot price averaging $258/t in December
2016, up more than threefold from January 2016. As
profit margins rose, a number of higher cost Australian
coal miners which had suspended operations in 2015,
began to restart output in Q4 2016. Similarly, several US
coking coal miners have reportedly resumed activity in
order to take advantage of high prices in recent months.
There is still an estimated 30mt of coking coal capacity
offline in the US, which could enter the market and
support global seaborne coking coal trade in Q1 2017.
However, softening coking coal prices in the coming
months may resume financial pressure on many higher
cost US and Australian miners. Indeed, by late January
2017 the FOB Australian hard coking coal spot price had
already eased around $50/t from the start of the month.
Seaborne Thermal Coal Trade
Commentary
Global seaborne steam coal trade is estimated to have
been relatively static at 883mt in 2016. This broadly
reflects a decline in European seaborne steam coal
imports, balanced out by rising shipments into Asia.
Seaborne steam coal shipments into the EU are
estimated to have dropped 23% to 99mt in 2016. This
was spearheaded by a 74% drop in UK steam coal
imports to a 27 year low of 4.5mt, due to the impact of
the country’s carbon price support mechanism and the
shuttering of several coal-fired power plants.
Meanwhile, steam coal shipments into Asia increased
4% to 698mt in 2016. This was driven by a 27% rise in
Chinese seaborne imports, as well as firm shipments
into a number of developing Asian countries. On the
other hand, steam coal shipments into India, Japan and
South Korea, all declined in 2016. Looking forward,
global seaborne steam coal trade is projected to once
again remain fairly static at around 885mt in 2017,
reflecting expectations of a slowdown in the pace of
decline in shipments into Europe, coinciding with a slight
drop in Chinese seaborne steam coal imports.
Steam Coal News
Total Chinese coal imports stood at 26.8mt in December
2016, which was up 52% y-o-y and contributed to a 25%
rise in the country’s total coal imports to 255.6mt in the
full year. This was largely driven by Chinese seaborne
steam coal imports, which increased 25% y-o-y to
147.2mt in the first 11 months of the year. In March
2016, the Chinese government reinforced its crack-down
on surplus domestic coal output, introducing a 276
working day limit on coal mines. This contributed to an
estimated 9% decline in the country’s steam coal
output, to around 2.5bn tonnes in January-November
2016. Coal fired power generation also increased by an
estimated 4% in the period, highlighting the continued
demand for steam coal among Chinese buyers. As such,
Chinese coal mining cuts inflated global coal prices and
significantly boosted the country’s steam coal import
demand, eventually resulting in a policy reversal on
working day limits at coal mines in October. However,
since then Chinese steam coal imports have remained
firm, supported by a particularly cold start to the winter
and a slower than estimated ramp-up in domestic
output. Overall, Chinese steam coal imports are
expected to have increased 27% to around 162.3mt in
full year 2016. Looking ahead, current projections
indicate a 1% drop in the country’s seaborne steam coal
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News AbstractsDry Bulk Terminals Group – January 2017 – Issue 164imports in 2017, largely reflecting expectations for a rise
in the country’s domestic output.
South Korean steam coal imports are estimated to have
dropped 3% to 98.1mt in 2016. This largely reflected the
country’s easing reliance on coal fired power generation.
Indeed, South Korean coal fired power output fell 6% y-
o-y in the first nine months of 2016, accounting for less
than 28% of the country’s total energy output in the
period, compared to a 30% share in January-September
2015. South Korean steam coal imports are expected to
remain relatively static in 2017, despite the scheduled
introduction of a number of new coal fired power
stations in Q1 2017. This partly reflects the expected
impact of a coal import tax, especially on lower-quality
coal imports.
Grain Imports
Grain Trade News
Global wheat and coarse grain trade is projected to drop
2% to around 338mt in the 2016/17 crop year. This
largely reflects expectations of a decline in import
demand in several key regions. Firstly, total grain
shipments into Asia are projected to drop 6% to a three
year low of 110mt in 2016/17, driven by a sharp
decline in import demand in China and Indonesia.
Meanwhile, an increase in domestic supply is expected
to see Iranian grain imports drop 11% to a five year low
of 9mt in 2016/17, while current projections indicate a
5% drop in grain imports into Saudi Arabia in the period.
This is expected to contribute to a 2% drop in total grain
imports into the Middle East, to around 53mt in
2016/17. On the other hand, total grain imports into the
Americas are projected to increase 2% to around 67mt
in 2016/17, supported by a rise in corn import demand
in Brazil and Mexico.
Grain Imports
Grain Trade News
Turkish grain imports are projected to grow 14% to 7mt
in the 2016/17 crop year. This is expected to be
supported by an 11% increase in Turkish wheat imports
to 5mt, given recent disruptions to the
country’s domestic output. Dry weather conditions in
central and south eastern Turkey, combined with poor
irrigation infrastructure, severely disrupted wheat
harvests early in the 2016/17 crop year. Current
projections indicate a 9% drop in the country’s wheat
output to 34mt in 2016/17. The Turkish government
recently announced the introduction of a National
Agriculture Project, allocating $4bn towards boosting
the output and stockpiling of 19 key crops, including
wheat, corn and barley. The move is considered to be
part of a programme towards controlling potential grain
price fluctuations, but is unlikely to have an impact on
the country’s domestic production until 2017/18.
Grain Exports
Grain Export News
Argentinian grain exports are projected to increase 14%
to 35mt in the 2016/17 crop year. This would be in line
with the country’s record grain exports in 2012/13 and
would account for over a tenth of global grain exports in
2016/17. The firm growth is expected to be largely
driven by Argentina’s corn exports, which are projected
to increase 28% to a record 24mt in 2016/17. This
reflects a number of factors, including expectations of a
7% increase in the country’s corn harvest to around
43mt in 2016/17, supported by suitable soil moisture for
favourable planting of early-seed crops, despite a firm
increase in rainfall in recent months. Argentinian corn
exports are also expected to be boosted by increasing
licences awarded to farmers and a relatively sharp
decline in corn exports from Brazil, given the latter
country’s limited domestic availability.
Minor Bulk Trades
Commentary
20www.drybulkterminals.org
News AbstractsDry Bulk Terminals Group – January 2017 – Issue 164Indonesia has relaxed its unprocessed mineral export
ban, first introduced in early 2014. The revision is
expected to allow for Indonesian exports of nickel ore,
bauxite and copper concentrate, with certain conditions.
These include miners’ commitments to investing in
domestic smelters, converting from long-term contracts
to a mining licensing system and allocating proportions
of output for domestic consumption. For the time being,
the full details of the revision remain unclear. Jakarta
has insisted that it does not intend to disrupt the global
market, with the country’s Mining Minister projecting
only around 5mt of Indonesian nickel ore exports in
2017. However, given Indonesia’s prior position as a
world leader in nickel ore and bauxite exports, having
shipped a combined 120mt in 2013, the country’s
reintroduction into the market may eventually have a
significant impact on seaborne mineral trade flows.
Bulkcarrier Fleet
Commentary
Capesize newbuild deliveries totalled 104 units of a
combined 20.0m dwt in full year 2016. This represented
a 23% and 18% increase in terms of vessel numbers and
tonnage respectively. Newcastlemax vessels, which have
a dwt range of around 200-210,000 dwt, accounted for
almost a third of total Capesize deliveries in 2016, in
terms of tonnage. In total, 30 Newcastlemaxes of a
combined 6.3m dwt entered the fleet in the period.
Vessels in this size range also accounted for around 30%
of the Capesize orderbook at the start of January 2017,
in terms of dwt, with 58 Newcastlemax units of a
combined 12.1m dwt currently on order.
Fleet Watch – Full Year 2016
Capesize vessels:
104 delivered
78 scrapped
33 ordered
Commentary
At the start of January 2017, the Panamax fleet
consisted of 2,449 units of a combined 196.4m dwt. This
was up 0.6% since the start of 2016, in terms of tonnage,
while there was no change in terms of vessel numbers.
This compared to an 8% average annual Panamax fleet
growth rate in the preceding five years. The sluggish
growth in 2016 was largely due to lower levels of
deliveries and firm demolition activity in the sector. In
total, 114 Panamaxes of a combined 8.2m dwt were
removed from the fleet in full year 2016. This
represented a 21% y-o-y increase and a four year high in
terms of tonnage. Meanwhile, Panamax deliveries
totalled 115 units of a combined 9.5m dwt in 2016.
Fleet Watch – Full Year 2016
Panamax vessels:
115 delivered
114 scrapped
2 ordered
CommentaryNewbuild contracting activity in the Handysize sector
dropped to the lowest level in over two decades in full
year 2016, with only 6 units of a combined 142,800 dwt
reported ordered. This was equivalent to 3% of the
Handysize volumes ordered in 2015. Contracting activity
in the sector has been declining consistently for the past
four years, which has seen the size of the Handysize
orderbook shrink considerably. Indeed, at the start of
January 2017, there were only 277 units of a combined
9.9m dwt on order, compared to 429 vessels of a
combined 15.2m dwt at the start of 2016. At the start of
2017, the Handysize orderbook was at its smallest size
for over a decade, in terms of both unit numbers and
tonnage.
Fleet Watch – Full Year 2016
Handymaxes:
217 delivered
93 scrapped
7 ordered
21www.drybulkterminals.org
News AbstractsDry Bulk Terminals Group – January 2017 – Issue 164Handysizes:
128 delivered
116 scrapped
6 ordered
Commodity Countdown
China Surprises With Record Iron Ore Imports
At the start of 2016 the outlook for Chinese iron ore
import growth appeared challenging, given slower
import growth in 2015, expectations of continued
Chinese steel capacity cuts and China’s ongoing gradual
transition towards a more diversified, mature economy.
However, Chinese seaborne iron ore imports went on to
significantly outperform expectations in 2016 and break
the 1bn tonne mark along the way.
A Surprising Response
Against a backdrop of moderating growth in China’s
steel consumption and Beijing’s measures to reduce the
country’s surplus steel capacity, Chinese iron ore import
growth performed at a level far higher than many had
expected last year. In early 2016, expectations were
shaped by both a 2% drop in the country’s steel output
and a five year low in Chinese iron ore import growth in
2015, as well as plans for continued cuts to steel
capacity.
However, Chinese seaborne iron ore imports
outperformed expectations in 2016, increasing 7% to a
record 1,008mt. This was the key driving force in total
dry bulk trade growth in 2016 and was largely
stimulated by three key factors.
Steel Output On The Up
The first key driver of record Chinese iron ore imports in
2016 was a stabilisation in the country’s steel output,
following a 2% drop to 804mt in 2015. The country’s
steel output continued to decline in 1H 2016, given
limited domestic demand. While Chinese steel mills
increased steel products shipments to foreign markets
by 9% y-o-y in 1H 2016, the 57mt shipped in the period
was insufficient to support overall Chinese steel output
growth. Chinese steel products exports also dropped
14% y-o-y to 51mt in 2H 2016, following the
introduction of tariffs by several importers, but also due
to firming Chinese steel demand. Indeed, a government
stimulus package launched in 1H 2016 boosted steel use
and saw steel prices rise sharply. This supported Chinese
steel mills and stimulated an overall 1% increase in the
country’s steel output to 815mt in full year 2016.
Domestic Iron Ore Mining Cuts
A further driver of Chinese iron ore import growth in
2016 was the drop in the country’s domestic iron ore
output. Financial pressure on Chinese miners from
depressed iron ore prices throughout much of the year
contributed to a 6% y-o-y decline in the country’s
domestic iron ore output, to a six year low of 1.3bn
tonnes in full year 2016, according to NBS data.
Swelling Ore Inventories
Finally, Chinese iron ore stockpiling increased sharply in
2016, partly reflecting improved expectations for steel
output at Chinese mills as the year progressed. By the
start of January 2017, iron ore inventories at 41 Chinese
ports reached 114mt, up 19% from the start of 2016 and
the highest level in over two years. So, far from
expectations of a difficult 2016 given China’s wider
economic developments and measures to reduce
surplus
steel capacity, Chinese seaborne iron ore imports
recorded firm growth to hit a record 1bn tonnes last
year. While the sustainability of this stronger growth
may be questioned, in 2016 at least, China performed
above expectations and overall was the bright spot for
seaborne dry bulk trade once again.
22www.drybulkterminals.org
News AbstractsDry Bulk Terminals Group – January 2017 – Issue 164And Finally.......
This final section is starting to gain traction of sorts as three of you responded this month. One had the correct answers for both questions, the others got one right each, well done!
December Answers
*****
I asked:
The maths:
A woman has 7 daughters and they each have a brother, how many children does she have?
Answer: 8, because the 7 daughters all have the same brother.
*****
And a logic puzzle:
When you have me, you feel like sharing me. But, if you do share me, you can't keep me. What am I?
Answer: A Secret!
*****
The maths question this month:
If you take 3 apples from a bag containing 5, how many do you have?
*****
And a logic puzzle this month:
What can run but never walks, has a mouth but never talks, has a head but never weeps, has a bed but never sleeps?
*****
That is it for January. Answers to [email protected] please and I will reveal the answers in the February issue.
Further Information:
Clarkson Research: www.crsl.comFairplay: www.fairplay.co.ukFearnleys: www.fearnresearch.com
==================FUTURE ABSTRACTS
DBTG members are active world-wide so please contribute any interesting items from your own daily reading for inclusion in future issues of News Abstracts.Please send by e-mail to the Secretariat address below=================DBTG SecretariatTel: +44 1273 933817 Fax: + 44 1273 933715E-mail: info@dry bulkterminals. org
23www.drybulkterminals.org
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