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News AbstractsDry Bulk Terminals Group – May 2017 – Issue 168

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.

Hello and welcome to the selection of news extracts from May 2017. At last the sun has come out in the UK after what seemed to be weeks of clouds and cold weather. Of course after 3 nice days we have thunder storms but that is better than the cold!

I have been back from my Mexico/USA trip for a couple of weeks now and whilst my Spanish is fading, my reasons for going are not.

I thoroughly enjoyed visiting NAEGA in Washington, who gave me a warm welcome and a tour of their new offices. We are very keen to renew our Memorandum of Understanding with NAEGA and I hope to have more news on this shortly.

I also visited Miami to see Rafael Diaz-Balart, the Latin American co-ordinator for the AAPA. The 2017 Congress in Punta del Este, Uruguay, is being held 6th to 9th November and we are teaming up with them for the next DBTG meeting which will follow them on 9th & 10th.

I will be speaking at the AAPA Congress in Uruguay and all of the DBTG Members I have spoken to so far have all told me that Uruguay is on their list of places to visit so I really do hope that as many of you as

possible will be able to attend not just the DBTG meeting the AAPA Congress too.

As I advised in the March edition, the next DBTG meeting will be held in Punta del Este in Uruguay on the 9th and 10th November. Our meeting will run immediately after the AAPA Latin American Congress (6th – 8th). In a few days I will visit the AAPA in Miami to discuss our partnership on this venture, please watch this space for more detail in future editions.

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 MAST Asia, 17th-19th May, Tokyo Nor-Shipping, 30th May – 2nd June, Oslo CWC World LNG & Gas, 20th June,

Houston TOC Europe, 27th June, Amsterdam

IN THIS ISSUE

Shipping Matters Economy/Finance/Trade Commodities Terminals/Ports Freight Markets

SHIPPING MATTERS

1www.drybulkterminals.org

mailto:[email protected]


Poor cyber security on vessels provides backdoor to corporate systems: Inmarsat – SMN 30th April

A lack of cyber security onboard vessels can act as

backdoor for hackers to get into onshore corporate

systems.

While cyber security has become a lot more in focus

onshore in offices for shipping companies the level of

protection onboard vessels is yet to catch up, leaving a

vulnerability for cyber criminals to exploit.

“Centrally on a ship there is not a lot of that is of true

value but if somebody can use that ship as a backdoor

into a corporate environment,” Peter Broadhurst, senior

vice president safety and security for Inmarsat, told

Seatrade Maritime News at Sea Asia 2017.

“What we see is a lot of C level executives are saying our

company needs to be secure because we’ve got a lot of

financial information, so they company secure. But then

they allow all these ships to connect to the company

infrastructure and they don’t consider them as

something that needs to secure,” he said.

“They need to broaden their horizons when it comes to

cyber, take a more complete of the picture, or else they

will just compromise themselves.”

Incidents onboard are caused by the same reasons as on

land with phishing attacks the most common threat, and

Broadhurst said seafarers needed to be trained in cyber

security.

“It’s very easy for the seafarer with no training on that

just to click on the link or the attachment and you’re

infected, and you don’t know you’re infected and then it

starts to proliferate across the vessel,” he explained.

Similarly malicious software can be brought onboard via

laptops or mobile devices belonging to the seafarer.

The resulting attacks can see systems both on the vessel

and onshore hijacked by ransomware, or confidential

data stolen and sold on the Dark Web.

“That can lead to financial loss and most definitely leads

to reputational loss which in shipping is really a problem.

From a cargo perspective if you can’t give that kind of

level of certainty you’ll not be the choice of cargo

owner,” Broadhurst warned.

Inmarsat will be rolling out its Unified Threat

Management solution which will inspect all incoming

traffic and local area network extensions on the vessel.

He said that if an individual client on the ship is

compromised the system will quarantine it, identify the

problem computer, which allows for the company to fix

the problem.

Dry bulk tonnage glut sees signs of shrinking: Precious Shipping – SMN 2nd May

The lingering tonnage glut that is troubling the global

dry bulk shipping market may soon see a considerable

deflation to match demand, in view of increasing trade

flows coupled with upcoming IMO regulations that

would accelerate scrapping of older ships, according to

Precious Shipping.

Khalid Hashim, managing director of Precious Shipping,

noted that while the global dry bulk fleet has continued

to grow in 2016 and over the first quarter of 2017, the

Baltic Dry Index (BDI) has also risen.

“This can only mean that trade flows have increased

more than the supply side or, conversely, that balance

between supply and demand is not that far off,” Hashim

commented.

Last year the dry bulk fleet grew by 18.51m dwt. In the

first quarter of 2017 the fleet grew by 12.29m dwt.

“Further, the Ballast Water Management (BWM)

convention and the ‘clean’ oil convention should

combine to put a massive dent in the supply side


News AbstractsDry Bulk Terminals Group – May 2017 – Issue 168between the years 2018 and 2020 inclusive,” Hashim

observed.

The IMO BWM Convention is set to enter into force in

September this year while the ‘clean’ oil convention is

the global 0.5% cap on fuel sulphur content that will be

enforced in 2020.

The regulatory pressures from the BWM convention is

expected to increase scrapping significantly in 2018 to

around 35-40m dwt. “If we were to apply a slippage

factor of 50% and scrapping of 37.5m dwt then we

would get a negative fleet growth of minus 2.23% and a

year ending fleet of 784.76m dwt in 2018,” he said.

On the 2020 sulphur cap regulation, Hashim believed

that the median vessel in 2020 is a vessel without

scrubber. “This implies a significant cost saving for

vessels equipped with scrubbers, but also a 10-15%

speed reduction for the median vessel using expensive

(clean) fuel which will reduce overall transportation

supply,” he said.

However if scrapping is not strong enough in 2018/2019

despite the IMO regulations, then the market would be

dependent solely on the demand side, Hashim said.

China will continue to be a major market for dry bulk

shipping but there are uncertainties due to reduced

consumption of coal and higher domestic steel output,

while at the same time domestic coal output and

inventory are low and demand for steel continues to be

needed for ongoing infrastructure development.

Meanwhile, dry bulk shipowner Precious Shipping has

significantly narrowed its first quarter loss to $1.7m

compared to the deficit of $34.04m in the same period

of 2016.

The reduced loss was partly due to Precious Shipping

generating a 79% year-on-year jump in average earnings

per day per ship at $8,588 during the first quarter.

Dryships stays in red in Q1 – SMN 11th May

Dryships Inc. has stayed in the red for the first quarter of

2017 but it managed to significantly narrow its loss

compared to the year-ago period, and looks forward to

strengthening its bottomline with an expanded fleet.

Net loss for the quarter ended 31 March 2017 was

recorded at $10.71m compared to the bigger deficit of

$107.15m in the same period of 2016. The wider loss in

the year-ago period was due mainly to equity losses of

$45.71m in Ocean Rig, which Dryships sold its stake to

an Ocean Rig subsidiary.

Revenue for the first three months this year was

registered at $11.81m, down 30.6% year-on-year.

“Dryships has come a long way since last year when we

were fighting for the company’s survival,” commented

George Economou, chairman and ceo of Dryships.

“Since then we have cleaned up the company’s balance

sheet and almost doubled our fleet by acquiring modern

quality assets. With this rapid expansion phase behind

us we look forward to taking delivery of the vessels we

have acquired in the last few months at historically low

asset values and starting to generate revenue that will

improve our bottomline and demonstrate the earnings

capacity of our fleet over the next few quarters.”

The company’s latest vessel acquisition was made on

Wednesday when it entered into an agreement with an

entity affiliated with Economou to acquire one 158,000-


News AbstractsDry Bulk Terminals Group – May 2017 – Issue 168dwt suezmax tanker currently under construction in

China at a price of around $64m, with delivery

scheduled in May this year.

Over the last six months, Dryships has raised

approximately $570m of equity for the purpose of

acquiring modern vessels in various segments.

On aggregate, the company entered into agreements to

acquire 17 vessels of which 12 are with unaffiliated third

parties, with an average age of two years for a total cost

of around $765.5m.

Dryships is waiting to take delivery of seven dry bulk

carriers, one VLCC, one aframax and one suezmax during

the second quarter, and four VLGCs between June to

December.

Dry bulk freight: Still the servant of the Chinese demand cycle – SMN 12th May

It is hard to break the chain-links between the dry bulk

markets from the general health of China’s economy. In

common with a lower China Purchasing Managers' Index

(PMI) seen in April, the Baltic Dry Index (BDI) has

stumbled to the current level of 1,000 from the 1,100

points last month.

Perhaps the BDI is just following its routine of recording

higher rates during spring time before a summer lull

with a later pick up again during fall, ahead of the winter

restocking. This pattern has followed the construction

activities of China with religious fervor, as China is the

world’s bigger importer of raw materials, accounting

nearly half of the global share.

However, it seems that the seasonal peak and lull

periods are getting shorter and harder to predict. In

April, China’s imports of iron ore went down by 3.7%

month-on-month to a total of 83.27m tonnes, according

to Thomson Reuters Supply Chain and Commodity

Forecasts. Similarly, the country’s imports of coal also

fell in April to 18.95m tonnes, down 2.8% month-on-

month due to cyclone-related logistics problems in

Queensland, Australia.

Despite the slowing picture of seaborne trade, capesize

FFA rates had been ascendance this week, hitting

$12,446 on Tuesday, up $364 on a day-on-day basis.

“The capesize paper market gave up some of yesterday’s

gains despite the physical continuing to nudge higher in

both basins,” explained a FIS freight forward broker

based in Asia.

The panamax market meanwhile stagnated to a slide by

$12 day-on-day to $8,100 on Tuesday, likewise

supramax rates retreated by $12 to $8,842, while

handysize rates decreased by $70 to $7,435.

“Despite the uncertainty around the physical outlook,

current support, although patchy does seem to be

holding and the general tone is more optimistic,” added

the FIS FFA broker.

Fortescue Metals Group’s ceo Nev Power seemed to

share this market optimism as well and giving the

Chinese economy a vote of confidence during a recent

media conference. In his opinion, China remains the key

demand driver of iron ore for the long term, proven by

its track record of average production of nearly 800m

tonnes per year - or almost half the world’s steel output.

Besides China, Power expects that the rest of Asia to

remain a vibrant market for iron ore and steel

consumption. Despite the scaling down of iron ore

prices from the peak $95 per tonne seen early this year

to the $67 per tonne level, the FMG’s ceo still felt that

the current price levels are still “very strong”.

It seems freight rates will still bend to the mood of the

Chinese economy – a reality not lost on the authorities.

Having just pledged to keep economic growth at 6.5%

this year, the Chinese still have a trump card up their

sleeve in the shape of the ‘One Belt, One Road’ project.


News AbstractsDry Bulk Terminals Group – May 2017 – Issue 168Despite being a long term project, the participating

members are meeting in Beijing this weekend and the

result may give a further lift to seaborne raw materials,

in turn driving support for the freight market. And if that

does not happen, the country’s steel demand will still be

supported by Chinese policy makers anyway - to ensure

consistent growth ahead of the elections to be held later

in the year.

Rickmers Maritime bondholder drops injunction blocking fleet sale to Navios – SMN 17th May

A disgruntled individual bondholder of bankrupt

Rickmers Maritime has dropped a suit aimed blocking

the sale of the trust’s fleet to Navios Maritime Partners.

On Monday bondholder Kwok Kian Tow Peter filed an

injunction with the Singapore High Court to block the

sale of Rickmers Maritime fleet of 14 boxships to Navios

Partners. A hearing was originally fixed for Monday and

then adjourned to Friday.

“The plaintiff has on the 17 May 2017 withdrawn his

application and discontinued his court case against the

trust with leave from the High Court with no order as to

costs,” Rickmers Trust Management (RTM) said in a

statement to the Singapore Exchange on Wednesday.

RTM had raised strong objection to the injunction which

it described as “unprecedented in the history of the

bond market in Singapore”.

On Wednesday RTM urged “all creditor parties to

abstain from actions that may jeopardize or delay the

orderly wind-up of the Trust, which could adversely

impact value and timing of any recoveries”.

On 21 April this year Navios Partners announced it

would buy Rickmers Maritime’s fleet of 14

containerships for $113m. The Singapore shipping trust

is in the process of winding-up after failing to agree a

financial restructuring with its bondholders and other

creditors.

Updated: Disgruntled Rickmers Maritime bondholder seeks to block fleet sale to Navios Partners – SMN 15th May

A Rickmers Maritime Trust bondholder has brought an

“unprecedented” injunction in attempt to stop the sale

of its fleet to Navios Maritime Partners.

Although the Singapore-listed trust had filed to be

wound-up the saga with its bondholdlers continues with

an individual bondholder Kwok Kian Tow Peter filing an

injunction to block the sale of Rickmers Maritime fleet to

Navios Partners, unit Navios Partners Containers Inc.

Kwok holds the minimum amount SGD250,000 of

Rickmers Maritime’s SGD100m notes which the trust

failed to redeem in April 2017.

A court hearing was fixed for Monday 15 May, but

adjourned until 22 May with directions to the parties to

exchange affidavits before the new hearing date.

Last December bondholders blocked a proposed

financial restructuring of Rickmers Maritime leading to

the eventual move to wind-up the trust in April this

year.

“The plaintiff has not previously communicated with the

trustee-manager as to this matter and the injunction

application was completely unanticipated by the trust,”

Rickmers Trust Management told the Singapore

Exchange.

“The trustee-manager is of the view that the injunction

application is wrongful and seriously jeopardises the

unsecured creditors’ partial recovery of their

investment.”



It said that Kwok had violated the deeds of the trust by

making a legal application on his own rather than via

notes trustee DB International Trust (Singapore).

“This is unprecedented in the history of the bond market

in Singapore and, if allowed, will disrupt the bond

market processes, negate its longstanding legal

foundations and open up a floodgate for individual

noteholders to commence disruptive legal action on

their own, completely disregarding the terms of the

Notes Trust Deed,” RTM stated.

“In his application for the injunction, the plaintiff also

seeks to be exempted from an undertaking as to

damages to be provided to the court in case the

injunction is found to be wrongful. This is highly

unorthodox and would seriously and irreparably harm

the orderly winding up process of the trust if the

injunction is to proceed against all known norms.”

On 21 April this year Navios Partners announced it

would buy Rickmers Maritime’s fleet of 14

containerships for $113m.

“Such sale, assuming it closes within a reasonable

amount of time (as is expected), will result in up-front

cash recoveries, soon after closing, of approximately

between 8% to 10% to unsecured creditors payable

through an escrow arrangement comprising of some

$20m from the sales proceeds and cash on hand, to the

extent said cash is not used to settle vessel payables and

wind-up costs,” RTM claimed.

Thoresen Shipping buys secondhand supramax for $7.9m – SMN 17th May

Thoresen Shipping Singapore has purchased an 11-year-

old supramax bulk carrier at a price of $7.9m as part of

the shipowner’s ongoing fleet renewal plan.

The vessel acquired by Thoresen Shipping is the 54,170-

dwt Karaweik, built at a Japanese shipyard in 2006,

according to an announcement made Thoresen Thai

Agencies (TTA), parent firm of Thoresen Shipping.

The vessel, to be renamed Thor Future, has been

handed over to the new owner on Tuesday. The

previous registered owner of the supramax was

Panama-based Lucretia Shipping, part of Japan’s

Santoku Shipping group.

“The acquisition is part of TTA’s ongoing fleet renewal

plan to develop a fleet of modern and standard dry bulk

vessels and increase our operating efficiencies. TTA’s

short term fleet objective is to have a mix of handymax

and supramax vessels,” TTA stated.

With the addition of the latest supramax, the Thoresen-

owned fleet comprises of a total of 20 ships with an

average size of 52,908 dwt and an average age of 11.8

years.

Cash rich shipowners inking newbuilding orders with Greeks to the fore – SMN 17th May

Liquidity problems for shipbuilders and shipowners have

played into the hands of the cash rich says Seasure


News AbstractsDry Bulk Terminals Group – May 2017 – Issue 168Shipbroking's VesselsValue (VV) platform and has

resulted in a flurry of orders this year, with Greek

interests to the fore.

VV data early May shows Greek owners have placed 35

orders worth just under $2bn for new bulkers and

tankers in the first four months of the year.

Furthermore, VV estimates the value of the orders

exceeds by some $550m the actual reported value of

the vessels spent at the shipbuilding yard.

And, there are still a number of multi-ship contracts said

to be under negotiation.

According to VesselsValue Deals database, globally 119

orders have been placed since the start of 2017, with

eight Greek owners among those placing orders. After

the 35 inked by Greeks, US-based operators have placed

14 orders, Singapore owners booked 10 vessels,

Norwegians eight and Dutch six, to round out the top

five ordering countries.

Lou Kollakis' Chartworld Shipping leads the way with 12

bulkers and two tankers ordered, for $309m, but worth

according to VV, some $417m.

VV said: "Many in the shipping industry are worried

there is an imbalance of supply and demand between

the number vessels currently on the water and the

amount of cargoes. This situation does not look to

improve in the near future as there is just under 66m

dwt of tankers and bulkers to be delivered during the

rest of 2017, representing 47% of the current bulker and

tanker order book."

It goes on to explain that over the last five years, a major

source of finance and investment in the newbuilding

market came from the private equity sector which

invested heavily to capitalise in the post-crash market

downturn.

"Today the preference from the private equity sector is

to invest in tonnage already delivered and on the water

so an immediate return on their investment can be

realised. This led to a lack of newbuilding finance

available and resulted in a gap in deliveries at the major

shipyards and therefore increased appetite from them

to take orders.

"In early 2017 the cash rich Greek community took

advantage of this, securing a number of orders at

competitive prices. As we progress through 2017, yard

capacity has reduced but continued buying demand

from the private sector remains. This is one of the major

factors that has led to the increase in newbuilding prices

over the past five months," says VV.

Dry bulk freight market: BDI falls off the 1,000 mark – SMN 19th May

“Nervousness” has set into the freight market, sending

the Baltic Dry Index (BDI) to fall off the 1,000 point mark

again.

The BDI had slumped under 1,000 points to hit 960

points on Wednesday, 17 May 2017, down 20 day-on-

day. The decline had been ongoing for almost a month

since 18 April 2017 at 1,294 points.

The cause for this “nervousness” might draw for China’s

slowing construction activities whereas the shipments of

iron ore and coal were at lower demand. As such,

capesize rates have plunged since the start of the week,

from $12,385 on Monday to settle $11,737 on

Wednesday, dropping 5% in matter of days.

“An incredibly nervous capesize market was seen on

Tuesday (17 May 2017),” observed a FIS forward freight

agreement (FFA) broker.

According to him, the capesize rates rose first as

rumours hit the market that the VLOC conversions had

been rejected by the Korean registry. However, the

optimism soon dissipated as there was no forthcoming

confirmation on the matter.


News AbstractsDry Bulk Terminals Group – May 2017 – Issue 168“Essentially the paper curve is left flat day-on-day while

the physical market, too, seems to have bottomed out.”

he added.

Similar story was seen in panamax rates as well with

rates recorded at $7,445 on Wednesday, slipping 5%

from starting position of $7,870 on Monday.

“The lack of enquiry in both basins continues to fuel the

bearish sentiment on panamax paper with little respite

as the index continues to edge lower,” commented a

Singapore-based FIS FFA broker.

Some interim stability was seen then on Tuesday before

it was tested again at the morning trading session of

Wednesday. Eventually, the panamax rates had

hunkered down after another gloomy index saw sellers

giving up their positions with declines witnessed across

the curve.

It was all not rosy for the supramax market as well, as

rates retreated to $8,733 on Wednesday, down $71

from $8,804 on Monday.

“We witnessed further declines across the curve on

supramax paper with Q3 trading down to $8,300 low

while further out we came lower on limited trading as

buyers seemed happy to hold off.” observed a FIS FFA

broker on the Monday session.

In the meantime, he noticed that the sellers seem to

have the habit of finalizing the deals near toward the

close despite the flat index and sharp discounts

presented at the start of trading sessions.

On the contrary, little changes were seen in the

handysize market with flat rates starting at $7,370 on

Monday before scaling down to $7,313 by mid-week.

Despite the general bearish market outlook, there are

also plenty to look up as well. For instance, there is an

iron ore price rally at the moment, thanks to the upticks

in Chinese rebars and futures market.

Thus, analysts from Credit Suisse had forecasted the

price rally to sustain for the months ahead and

predicted a price of $70 per mt for Q3. The upgrade in

forecast also highlighted that the Chinese authorities

will maintain for a “strong and stable economy” before

the 19th Party Congress meeting later in the year.

Moreover, the seaborne coking coal prices have fallen to

a “sensible level” or near to the pre-Cyclone Debbie

level, which was way below the China’s domestic coals

prices. Thus, this price difference might arouse the

buying interests of the Chinese mills to import more

cargoes and lift freight rates in near term.

Greek shipowners lead global fleet growth since 2010 – SMN 22nd May

Though the rate of growth of the world fleet has slowed

over the past seven years it is still considerable, and is

often the case when something to do with shipping is in

expansion mode, Greek shipowners are among the

drivers.

Rate of growth of the global fleet has slowed over the

last seven years, from a peak of 8.6% in 2010 to 3.1% in

2016. Still, the overall fleet capacity has increased 391m

gt more than the 355m gt added in the previous decade.

Led by Greek interests, growth has been driven by

owners from 10 nations that are responsible for 75% of

all of the growth, but some smaller players are also in

the mix.

A report by Clarkson Research Services reveals Greek

owners have been responsible for the largest volume of

fleet growth since the start of 2010, with 89.3m gt

entering the Greek-owned fleet in this period,

cementing their position as the largest owner nation,

having overtaken the Japanese in 2013.

The Greek growth is the result of a sustained level of

deliveries and secondhand purchases in recent years,

much of the buying involving previously owned Japanese

tonnage.



The Chinese owned fleet has grown by the second

largest total since 2010 (73.7m gt), whilst the Japanese

fleet has increased 32.2m gt.

Of the 10 national fleets to have grown most in tonnage

since the start of 2010, nine are amongst the largest

owner nations as of 1 May.

Only Canadian owners are not part of the 10, ranking

13th with 24.5m gt, highlighting recent growth has been

driven by countries with established fleets.

The exception to this trend are German owners, who

own the fourth largest fleet with 85.4m gt, but have

experienced a 12% reduction in tonnage since 2013. A

telling statistic on the state of the German shipowning

sector.

The global fleet has increased 44% in gt terms in the

seven years, with all regions seeing a sustained level of

growth. The European and Asia/Pacific fleets have

grown almost equally, 164m gt and 168m gt

respectively.

However, there have been some notable differences in

the diversity of this growth. European growth has been

primarily driven by Greek owners, whose fleet has

grown 74% in gt terms since 2010, equivalent to 54% of

European growth. By comparison, Norwegian and Italian

growth has only accounted for 9% and 7% of European

growth respectively.

In contrast, Asian fleet growth has been driven by a

wider set of nations. Whilst Chinese owners account for

44% of total Asia/Pacific fleet growth in gt terms,

owners in Japan (19% share of growth), Singapore

(10%), South Korea (9%) and Taiwan (6%) have

experienced notable fleet growth since 2010.

Outside the largest owner countries, there have also

been some notable developments amongst smaller

owner nations. The Omani owned fleet has increased

257% in tonnage terms since 2010, whilst the Swiss,

Bermudan and Kuwaiti fleets have all more than

doubled in size. With total fleet growth slowing, some of

these smaller owner nations are becoming more

influential in regional and global growth patterns.

Norway offering international owners financing on retrofit equipment – SMN 24th May

Norway is offering credit to international shipowners

who buy retrofit systems such as ballast water

management from Norwegian suppliers.

Export Credit Norway it had assembled a specialised

team and tailor-made financing solution to support

vessel owners who need to retrofit equipment such as

gas exhaust cleaning systems, ballast water treatment

systems and new coating systems.

Export Credit Norway will offer up to 85% of the value of

retrofit equipment purchased by international

shipowners from Norway, with the equipment having to

have a minimum of 30% Norwegian content. The

maturity of loans will be between 5 – 8.5 years.

“Money is tight and access to reasonably priced capital

is a challenge for many players in the international

shipping and maritime industries at the moment. Hence,

attractive financing of retrofit equipment could make


News AbstractsDry Bulk Terminals Group – May 2017 – Issue 168the investment less demanding for many vessel

owners,” said Olav Einar Rygg, Export Credit Norway’s

director of lending, Ocean Industries.

Owners have complained about the lack of available

financing for equipment required to meet new

environmental regulations with as many as 60,000

vessels worldwide will need to retrofit scrubber systems

by 2020 and ballast water treatment systems by 2021.

For owners looking to retrofit several vessels Export

Credit Norway can offer a credit frame agreement to

cover the entire fleet.

“Our aim is to make the financing process as smooth and

efficient as possible, so that vessel owners can focus

their time on core business. That is why we offer a credit

frame agreement which essentially covers numerous

vessel retrofits under the same loan facility,” said Rygg.

Dry bulk FFA market: Ground Zero or a long and winding road? – SMN 26th May

The Baltic Dry Index (BDI) continues to be battered by

falling freight rates, dragging itself through another

week of sub-1000 point action.

Hardly living up to the dry bulk market’s “year of

recovery” scenario, BDI has retreated from its zenith

above 1,300 points in April 2017 and was back to 934

points on Wednesday, well below its starting point of

953 points recorded in January 2017.

Reaching ‘ground zero’ so early in what should be the

middle of the seasonal high driven by Chinese

construction activities may be discouraging for trade

participants. But while it might mean that the slowdown

in Chinese economy is very real, it may simply imply that

the summer construction activities have yet to hit full

throttle.

“It's way too early to call the next direction but the lack

of appetite to cross the spread, suggests that the whole

paper market is in limbo waiting for fresh news,”

reported an FIS Capesize FFA broker.

Struggling with the tone of market inactivity, capesize

rates stood at $12,177 by midweek, down $281 or 2.2%

from the starting point of $12,458 on Monday. Going

forward, capesize rates could resume this downward

slide in view of the upcoming Chinese public holidays

later in May and early June.

Public holidays affected European traders this week.

“With holidays coming up over the next few days, the

Capesize market has felt like being ringside at a one-

sided boxing contest,” added an Asia-based FFA broker.

Following the lead of capesize rates, the panamax rates

also retreated to $6,823 on Wednesday, down $49 as

compared to $6,872 recorded on Monday. A similar

story was in the supramax market which dropped to

$8,577 on Wednesday 2017, down $90 from $8,667 at

the start of the week, while handysize rates dropped by

$210 or 2.8% to $7,057 on Wednesday.

Despite the lethargy, overall, the dry bulk market is still

in a better shape than last year’s doldrums. A sustained

recovery of the dry bulk sector may not involve many

quick fixes but rather resembles a long and winding road

ahead.

The 2017 fundamentals are improving, in particularly on

the demand side, with dry bulk trade slated to grow

about 2% during this year. The key drivers of the growth


News AbstractsDry Bulk Terminals Group – May 2017 – Issue 168lie heavily on the shoulders of seaborne iron ore trade

which is estimated to grow by 4% in 2017.

On the supply side, ship scrapping has gained

momentum over the past years, with around 28.8m

deadweight of bulk carriers recycled in 2016 alone.

However, 2016 demolition volumes were still 4% lower

when compared to the 30.5m deadweight removed

from the fleet in 2015.

Another positive is that India is stepping up its game on

steel production which may drive more imports of

seaborne raw materials, thus boosting tonne-miles that

support freight market earnings. According to the World

Steel Association, India’s steel production grew 9.3%

year-on-year in March 2017, and the country currently

accounts around 9% of total global output.

To make high quality steel, India is expected to import

increased volumes of high-quality coking coal from

Australia. Currently, its imports of Australian coking

coals are almost on par with demand from China and

Japan, accounting around 20-25% of Australian coking

coal exports on monthly basis.

For now though, as summer beats down on London, an

FIS broker summed up what the long road to recovery

could mean for the dry bulk market. “It will be a long

hard summer for all concerned if the market stays in this

rut but at least for the time being we have sunshine,

cricket and a bottle of Provencal Rose. Bottoms up!”

Bold move on coal – PSM 5th May

Last month, Port of Amsterdam took a bold move for a

landlord port authority: it announced its ambition to end

handling coal by 2030, writes Peter de Langen.

At almost 20m tonnes, coal still accounted for 25% of

Amsterdam’s total throughput of around 80 million

tonnes in 2014. It also accounted for a substantial part

of the revenues of the port authority.

Clearly, the throughput of coal is declining due to a shift

away from coal-fired power plants, and the coal-hungry

steel industry is stagnating in North-West Europe. The

UK - which is sometimes served by Dutch ports -

announced its intention to close coal-fired power plants

in 2025, while the Netherlands also agreed to close

down some coal-fired power plants. So coal is already a

declining segment.

In 2016, Amsterdam handled 16m tonnes of coal.

Consequently, the port’s two coal terminals were

unhappy with the announcement.

There are, in my view, two main interpretations of this

move. First, some might argue that as the port

authority, Amsterdam does not operate the terminal

and has no influence on the use of coal, hence it is not in

the position to set such an ambition. On the other hand,

the port authority as the developer of the port complex

has to make choices to make sure that the ‘portfolio’ of

activities in the port complex is viable in the long run.

To be the ‘last port standing’, that is the last port that

handles coal, is not an attractive prospect. It is doubly

unattractive for a metropolitan port such as Amsterdam,

which has a large capacity to develop new economic

activities at brownfield sites.

I believe that Port of Amsterdam took the right step in

setting this ambition; it provides clarity to all

stakeholders and also is a platform for attracting new

activities, shaping Amsterdam’s future as a post-fossil

era metropolitan port.

AAPA concern over proposed port funding cuts – PSM 25th May


News AbstractsDry Bulk Terminals Group – May 2017 – Issue 168US President Donald Trump has sent Congress a 2018

budget request which, says the American Association of

Port Authorities (AAPA), signals the decline for most

federally funded, port-related programmes.

Among the budget proposals for next year is to

eliminate the US Department of Transportation’s

Transportation Investment Generating Economic

Recovery (TIGER) grants programme, which last year

awarded American ports US$61.8 million in grants to

make infrastructure improvements.

Port of Long Beach

AAPA President and CEO Kurt Nagle, told Port Strategy

that US ports are obviously concerned that the

transportation infrastructure they depend on for goods

movement get a high priority in the president’s

proposed $1 trillion infrastructure initiative.

“We’re at a point in time when the demands on our

seaports and the supporting multimodal and security

infrastructure has never been higher,” he said.

“TIGER is the only federal multimodal transportation

grant program that has been able to be that tool for

ports, although the president has recommended

eliminating it in fiscal 2018.”

He explained that AAPA members have identified $29

billion in onsite multimodal landside infrastructure

needs and a combined $66 billion for both landside and

waterside port infrastructure over the next decade.

In addition to the TIGER grant cuts, President Trump has

proposed that the Department of Homeland Security’s

Port Security Grant Program (PSGP), which Congress last

funded at $100 million, would see funding reduced to

$47.8 million, a cut of 52%.

Mr Nagle added: “Our member ports take security very

seriously. A reduction in port security funding and CBP

personnel sends the wrong message to the “bad guys”

that America’s ports could become vulnerable.”

Trump has also proposed cutting the overall

Environmental Protection Agency’s (EPA) budget by

31%, while the EPA’s Diesel Emissions Reduction Act

(DERA) grants, which helps ports invest in cleaner

equipment and CO2 reduction strategies, could see an

83% reduction.

NS United wins another Vale CVC, to order VLOC – FP 31st May

Japanese bulk carrier owner-operator NS United Kaiun

Kaisha will order a 400,000 dwt Very large ore carrier

(VLOC) after winning a 25-year consecutive voyage

charter (CVC) with Brazilian mining giant Vale.

This is the second such contract for NS United, which

won its first Vale contract in December 2016.

The company will order a vessel at a compatriot

shipbuilder for delivery by September 2020. The vessel

from the earlier contract is being built by Japan Marine

United for delivery in 2019.

NS United’s other vessels comprise tankers, general

cargo ships, and bulk carriers ranging from Handysizes to

Capesizes.

NS United was formed from the merger of Shinwa Kaiun

Kaisha and Nippon Steel Shipping in 2010. Details as to

where the VLOC will be built were not released but it is

likely to be a Japanese shipyard. The ship is expected to


News AbstractsDry Bulk Terminals Group – May 2017 – Issue 168be delivered to NS United in 2019, when the CVC is

scheduled to commence.

Under the CVC, NS United will ship an aggregate of 40

million tonnes of iron ore from Vale’s terminals in Brazil

to China. The company said, “Under our medium-term

management plan, we are promoting the expansion of

our transportation of raw materials for steel

production.”

Vale, the world’s largest mining group, has signed CVCs

with companies such as COSCO China Shipping, China

Merchants Energy Shipping, ICBC Financial Leasing, and

South Korean bulk carrier owner-operator Pan Ocean.

The shipping deals are in line with Vale’s ambitions to

increase iron ore exports to China. Vale is also

reportedly in talks with Chinese sovereign fund China

Investment Corp in relation to a multibillion dollar deal

to sell part of its future iron ore output for as long as 30

years.

China's coal imports up 33% to nearly 90 million tonnes in Q1 – FP 30th May

China’s coal imports have grown 33% year on year (y/y)

to 89.5 million tonnes in the first quarter of 2017, amid

healthy demand for power generation and a ban on coal

imports from North Korea.

Steam coal and lignite collectively accounted for a

majority 71% of these imports, increasing 27% y/y to

63.9 million tonnes within this period. Coking coal

imports have seen an equally strong increase, rising 52%

y/y to reach 25.6 million tonnes from January to April.

Italian shipbroker Banchero Costa commented that the

bullish import volume can be attributed in part to

greater demand from China’s thermal power generation,

which increased close to 8% y/y in the first four months

of the year to reach 1,476 TWh. This has corresponded

with a recovery in dry bulk freight rates from historic

lows in February 2016.

Indonesia, Australia, and Russia have benefited the most

from the surge in Chinese steam coal and lignite imports

seen this year, increasingly 35%, 37%, and 67%

respectively y/y in the first quarter of 2017.

“Coal imports have also increased to make up for the

shortfall in domestic coal output last year, which

decreased a rather drastic 9.4% y/y to 3.36 billion

tonnes in 2016. Due to the large scale of China’s

domestic coal production and consumption, even small

changes in their local situation are known to have a

disproportionate impact on coal imports,” Banchero

Costa said.

In March, China implemented a ban on coal imports

from North Korea in response to the latter’s growing

belligerence. This resulted in North Korean coal

shipments to China falling 62% y/y to just over 2 million

tonnes in January–April.

However, it is uncertain if this bullish factor will

continue, as domestic coal production has been starting

to recover with output in the first four months of 2017,

now up 2.5% y/y at 1.1 billion tonnes. This point was

echoed by Norwegian bulk carrier operator Torvald

Klaveness.

“With domestic Chinese availability improving, imports

in May and June will be under pressure. The general

activity level/electricity consumption/hydro production

will be the main drivers for overall coal demand in China

in the second half of 2017. However, the most

important drivers for Chinese coal imports will be

government policies,” said Torvald Klaveness.


News AbstractsDry Bulk Terminals Group – May 2017 – Issue 168The Chinese government, noted Torvald Klaveness, has

been mulling limiting imports of low-quality coal to

boost the prices of domestically mined coal.

While coking coal import demand has been driven by

China’s steel output, which has grown 4.5% y/y to 273.5

million tonnes in January–April 2017, softening steel

prices could change the situation.

Steel prices have started to show some weakness on

steel demand concerns after Beijing imposed fresh curbs

on lending in real estate, making the outlook more

uncertain for China’s steel output and coking coal

imports. The World Steel Association has also released a

forecast of flat steel demand growth in China this year.

For coking coal, imports from Australia and Mongolia

have increased 35% and 92% respectively y/y in the first

quarter of 2017. While China imported no coking coal

from the United States for 2016, the country imported

800,000 tonnes of US coking coal during the first four

months of 2017.

Stellar Daisy loss: Families of four seafarers get up to USD980,000 each – FP 29th May

Polaris Shipping said on 26 May that it had agreed and

paid a compensation of KRW800 million (USD714,925)

to KRW1.1 billion to each of the families of four of eight

South Korean seafarers who are believed to have gone

down with an ore carrier Stella Daisy in the South

Atlantic near Uruguay on 31 March.

The payment was made nearly two weeks after Polaris

Shipping settled the compensation amounts with the

families of 17 of the 22 missing crew and the two

survivors from the Stellar Daisy incident.

This compensation that Polaris Shipping has paid is the

highest ever amount for a shipping accident. The

company said that it remains in discussions with the

families of the other seafarers.

Families of the other five seafarers are demanding that

Polaris Shipping continue with the search efforts,

although the company has scaled down the search by

removing commercial ships from the effort.

The two survivors, both Filipinos, have returned to their

families in the Philippines, but remained hired by Polaris

through their crewing agency.

"We hope we will reach an amicable settlement with the

remaining bereaved families," said Polaris.

Polaris has come under fire for reporting the accident to

the government 12 hours after the company was

notified of the emergency. This suggests that Polaris

missed the "golden time" to evacuate all the crew.

The loss of Stellar Daisy has also sparked concerns over

the safety of such converted bulk carriers. Shortly after

the disaster, another Polaris ore carrier, Stellar Unicorn,

had to be diverted to Cape Hope for repairs to a cracked

hull, lending more fuel to the speculation.

As of 20 April, Polaris Shipping had initiated inspections

on all its ore carriers, amid growing concern over the

safety of its fleet. On 8 May, cracks were found on

another of the company's vessels, the Stellar Queen.

On 25 May, the Busan Coast Guard raided Polaris

Shipping's offices in Seoul and Busan, taking away

records of voyages and ship repairs.

Same ballast water risk areas cut opportunities for sales – FP 17th May

Ever since the ballast water management convention

was agreed in 2004, there has been criticism of the need

for all ships to one day manage ballast water because

many trade only within specific areas and pose no risk at

all.

Criticism of the convention itself is not valid for two

reasons. At the discretion of the flag state, convention

need not apply to ships that operate exclusively in the

waters of that state or between the high seas and

waters of that state. The second reason is that under


News AbstractsDry Bulk Terminals Group – May 2017 – Issue 168Regulation A4, there has always been the possibility for

exemptions to be granted to ships that operate between

specific ports and locations.

The wording of Regulation A4 has been interpreted as

allowing for what are known as same risk areas (SRAs)

that can be established by neighbouring states if it is

decided that the risk of transfer of invasive species is

acceptable. This implies that a risk assessment should be

carried out and Guideline G7 details the recommended

process for this.

For a long time, this possible exemption may have been

at the back of shipowners’ minds but could not be acted

on unless and until the port states involved put in hand

the process of assessing the risk and establishing SRAs

with their neighbours. There are several areas which fall

into this category – Northern Europe, the

Mediterranean, Southeast Asia, and the coastlines of the

North and South Americas.

There are moves afoot to establish SRAs with the subject

having been discussed at the past three MEPC meetings.

In Northern Europe, Denmark is taking the lead and has

presented many papers to the IMO’s MEPC meetings. In

Southeast Asia, Singapore is in the driving seat, but has

Indonesia, Malaysia, Thailand, and Vietnam along as co-

drivers. The United States is outside the IMO

convention, but can exempt its own flag vessels should it

desire to. SRAs will again be on the agenda at MEPC 71

in July, but more relevance will be given to the revision

of the G8 guidelines.

Flag states acting alone or with others could declare an

SRA, providing the IMO is advised and it can be shown

that the risk assessment has been carried out. However,

time is running out for any to be in place before 8

September, when the convention comes into full effect.

Owners of vessels that might benefit from any future

SRA may well decide that rather than fork out on

installing a system immediately, they will take

advantage of the option to decouple the IOPP certificate

from the survey cycle and buy themselves a further five

years, by which time the issue of SRAs will likely have

been settled.

The majority of the ships involved are either ferries or

smaller vessels, such as feeder container vessels, ro-ro

cargo vessels, general cargo ships, handy bulkers, and

product and chemical tankers. Small they may be, but in

numeric terms they make up a very large percentage of

the world fleet. The exact number is difficult to pin

down, but a number of estimates of between 20,000

and 30,000 have been mentioned various times.

If a substantial number of these are able to benefit from

SRAs, the impact on system makers’ projected incomes

will be significant. For ships that operate across two

SRAs, the option of one of the container-based systems,

such as those offered by Damen and others, may extend

further the number of ships that decide against installing

a ship-specific system.

Costa Concordia captain begins 16-year jail sentence – FP 15th May

Former Costa Concordia master Francesco Schettino has

spent his first weekend in prison after Italy’s top appeal

court upheld a 16-year prison sentence pronounced

against him in 2015 and upheld by an appeal court last

year.

Schettino’s defence lawyer is continuing to claim that

Schettino has been made a scapegoat for the sinking of

the cruise ship in January 2012 with the loss of 32 lives,

however, and says that he is considering appealing to

the European Court of Human Rights.

“As always, Italy needs to find a scapegoat,” lawyer

Saverio Senese told journalists after the Court of

Cassation ruling in Rome on Friday. “I believe that in


News AbstractsDry Bulk Terminals Group – May 2017 – Issue 168Schettino’s trial there were a number of violations of the

defendant’s defence rights.”

He said that Schettino, 56, had reported to the Rebibbia

prison in Rome as soon as he was told of the verdict to

avoid media coverage of his transfer to prison in

handcuffs.

Costa Concordia master Francesco Schettino

An Italian paper, Il Messagero, quoted Schettino as

saying from prison that he was going back to being a

ship’s “boy” after having worked his way up from the

bottom in the maritime profession to being a master.

“So, as soon as I got here, I cleaned the dirty bathroom

and I thought, okay, I have to react. I will start over a

ship boy.”

Schettino was originally given a 16-year prison sentence

by a court in Grosseto, Tuscany, in February 2015 after

having been found guilty of multiple homicide, causing a

shipwreck, and abandoning his ship while passengers

and crew were still on board.

That sentence was upheld in May last year by an appeal

court in Florence but Schettino and his legal team

decided to challenge the appeal court judgement before

the Italian supreme court, the Court of Cassation.

Schettino’s decision to “salute” the island of Giglio with

a close sail-by has been largely blamed for the grounding

and sinking of the giant cruise ship, which was carrying

more than 4,000 passengers and crew.

But Schettino and his team sought an acquittal, arguing

that organisational failings on the part of vessel operator

Costa Crociere had been largely responsible for the

accident and its aftermath, along with errors by

Schettino’s helmsman and the Italian coastguard.

However, at a hearing before the Court of Cassation last

month, prosecutor Francesco Salzano dismissed

Schettino’s defence, saying that the accident had been

“a shipwreck of such immense proportions and

characterised by such gross negligence and obvious

procedural violations” that no mitigating circumstances

could be admitted for his actions.

Schettino had failed to alert the crew to the situation

after the initial collision so that they could launch the

lifeboats and save the passengers and then, after leaving

the ship, had not even kept in radio contact with his

officers or try to keep himself informed about the fates

of the 2,000 people still aboard the vessel.

There have been claims, however, that other Costa

Concordia crew members and a Costa Crociere executive

were treated too leniently for their roles in the accident.

Costa Crociere itself was also allowed to enter into a

plea bargain under which it paid a USD1.1 million fine to

escape prosecution.

Taking the blame – SMN 16th May

What is the worst thing that can possibly happen to you

in your profession? How have you prepared for this

eventuality, both technically and psychologically, so that

you don’t go to pieces in extremis?

If you are a master mariner, it is difficult not to put

yourself in the position of Captain Francesco Schettino,

as his ship’s systems died in front of his eyes following

the contact with the rock off the Isle of Giglio on that

fateful evening in January 2012. How, you might ask,

would I have coped in the terrifying knowledge that my

ship was holed, flooding, out of control and that my

decisions could lead several thousand people to a

watery grave?

Throughout your career, aboard every ship you have

sailed in, you have undertaken drill after drill, dutifully

practising mustering passengers, regularly lowering

lifeboats, even undertaking “desktop” damage control

exercises. In more recent years, you will have spent time

on simulators. But in the back of your mind, you may


News AbstractsDry Bulk Terminals Group – May 2017 – Issue 168well have thought, as you watched the passengers being

instructed in the use of their lifejackets, or the boats

sent away on a smooth harbour exercise, that such drills

barely scratched the surface of what “could”, just

possibly, happen. And even if you had a fertile

imagination, you would have probably put to the back of

your mind any scenario which would have matched the

the frightful reality of the situation on Costa Concordia,

onthat awful night.

Could you remain rational and a fully functional

individual as the ship drifted, listed, lost all electrical

power? Could you take all the right decisions, at the

time they were needed, as the terrible messages of a

worsening situation flooded in, as the sea filled her

compartments?

It might be argued that those in charge of the gigantic

cruise ships, some of which now have more than 7,000

souls aboard, have responsibilities unlike those faced by

anyone else on land, sea or air. They are trained along,

with their crews, to minimise risks, to prevent awful

things happening. But before January 2012, was the

training sufficient?

In the armed forces, training is prolonged, intensive and

is designed to ensure that only the most capable reach

high command. Those in charge of major warships will

have faced the most searching examinations of their

professionalism, with drills that really are horribly

realistic, involving simulated battle damage and mass

casualties, to ensure that they can cope with the worst

case scenarios.

By contrast, those in commercial shipping know that

they cannot require hundreds of passengers, including

the old and infirm, to board boats and rafts in the

middle of a cruise they have paid to enjoy. They cannot

fill the accommodation with mock smoke or extinguish

all the electrics, just to provide a realistic emergency

drill. You do the best you can, and hope for the best.

Is all this an effort to promote sympathy for Francesco

Schettino, as, all appeals against the master’s 16 year

gaol sentence have failed and he is now a prisoner?

There were 32 people who lost their lives in this

significant marine casualty and their relatives want to

see justice done. But there are questions about this case

which will not go away, despite the assurances from

operators that lessons have been learned and

precautions to prevent any repetition put in place.

And it is difficult to consider it fair that whatever the

master’s failings, he alone should suffer so

disproportionately for mistakes made that evening.

After all, there was a bridge “team” operating the ship,

and an organisation which did not function as it ought to

have done. And in any reasonable system of justice,

there is a difference between errors of judgement and

wilful, criminal negligence. And with his ship in its death

throes, it is worth recalling that her master was a human

being and not a robot.

Braemar profits hit by technical division restructuring costs – SMN 10th May

Braemar Shipping Services 2016 profits for the year

ended 28 February 2017 were hit restructuring costs for

its technical division.

Braemar reported a GBP3.5m profit for the year ended

28 February 2017 compared to GPB13.8m in the

previous year.

The last financial year saw Braemar being hit by GBP3m

in restructuring costs mainly relating to its technical

division. “Tough action was taken in the Technical

division to restructure our businesses and address the

cost base in this economic climate. Despite this we have

maintained our core skills and capabilities and, as a

result, are well placed for the future,” said David

Moorhouse, chairman of Braemar.



The restructuring of the technical division, which was led

by a new management team, is expected to lead to

GBP6m in annual cost savings starting from 2017/18.

On the positive side Braemar booked a GBP1.7m profit

from the sale of its shares inthe Baltic Exchange which

was sold to the Singapore Exchange last year.

Commenting on its shipbroking business Braemar said:

“Shipbroking division achieved a resilient performance

in difficult market conditions, with increased transaction

volumes in almost all areas.”

The e-revolution and dry bulk chartering – SMN 5th May

An e-revolution is stirring waves among the forward

freight agreements (FFA) market on whether to turn on

the plug to an electronic platform or maintain status

quo.

This issue has been discussed over the Singapore Iron

Ore week 2017, with market participants from shipping,

iron ore, coal trading houses and miners all putting their

best foot forward to advance the market into the future.

“You cannot ignore the benefits of shipping FFAs,”

opined John Banaszkiewicz, the managing director of

Freight Investor Services (FIS).

So far, the FFAs have been a good hedging tool against

the volatile market with many linkages to the physical

market. To Banaszkiewicz, nowadays both traders and

brokers alike prefer more “colours” or indicators to track

shipments and trading lots.

Thus, in complying with brokerage and trading wish-lists,

the FFA may push for electronic platforms with fixing of

vessels done at the platforms just like in the

commodities markets.

“Having a screen (on Baltic Exchange) will definitely

improve fixing and chartering of vessels,” said Mark

Jackson, ceo of Baltic Exchange.

He urged that not because the ship fixing market is not

efficient enough, but have a trading screen will bring

every market participants together and might improve

volumes and allow transparency that attract more new

entries into the shipping market. But, with or without

the electronic platform, Jackson assured trade

participants that Baltic Exchange will still operate

“business as usual”, catering to the interests of all the

stakeholders firsthand.

However, the challenges lie in convincing the existing

market participants to embark on this new front for

digitalization. For instances, mining companies have

seen FFA as a compliment in trade but not a

requirement yet. And many ship-owners still prefer

traditional methods of vessel fixing.

“Shipowners/charterers need to work more closely with

miners and mills alike to reduce market volatility,” said

Ye Weilong, executive vice president of China COSCO

Shipping Corporation Limited.

Ye explained that the all three participants, the ship-

owners/charterers, miners and mills are joined like a

supply chain and any cracks among the chain-links will

imply wild price swings and affected any party’s

profitability.

For now, the Chinese business conglomerate and state-

own enterprise headquartered in Shanghai will have an

open mind in exploring the usage of FFA in shipping. Ye

claimed that the company has yet to conduct research

and neither possesses much experience into the field


News AbstractsDry Bulk Terminals Group – May 2017 – Issue 168but he does not rule out the usage of FFA as time

matures.

“There is a lot new money coming in to the shipping

sector,” highlighted Banaszkiewicz.

He indicated that these new funding will provide ship-

owners the availability to purchase vessels and expand

their fleets, which may also called for trading in long-

term FFA contracts. As such, an e-platform might take

center stage to link all these stakeholders together to

manage risk and the steered away from the prices

fluctuations of the market in the future. But till then, the

market still needs lot of nurturing in tested and proven

methods with much dialogue to progress in the

digitalized sphere.

“We will do our best to educate the market in

conducting workshops and seminars on FFA to involve

more players in the market,” Banaszkiewicz concluded.

Inmarsat’s FleetXpress passes 10,000 ship milestone – SMN 4th May

Inmarsat has marked the first anniversary of the

introduction of FleetXpress with the news that more

than 10,000 ships have committed to use the high-

performance maritime communications service.

FleetXpress offers the advantage of combining

Inmarsat’s high-speed, high capacity broadband services

via Ka-band (Global Xpress) and reliable, safety level

services via L-band (FleetBroadband) into a single

commercial package.

“The demand for Fleet Xpress has been unprecedented

since its launch at the end of March

2016, demonstrating that the market has been truly

ready for the connected ship and

the network supporting maritime business applications”

said Ronald Spithout, president of Inmarsat Maritime.

The demands of crew welfare and operational efficiency

mean that shipping is coming to see high-speed and

continuous connectivity as “imperatives rather than

aspirations,” he added.

Inmarsat points out that several of its service provider

partners such as Navarino, Speedcast, Marlink and

Tototheo Group have already integrated Fleet Xpress

into their portfolios, helping achieve the 10,000-vessel

landmark. Inmarsat is also transitioning more than 2,600

XpressLink installations to Fleet Xpress and will convert

clients previously scheduled for connection to

XpressLink to Fleet Xpress by end 2018.

As a further value-add to Fleet Xpress, Inmarsat plans to

roll out a cyber security solution this year. Jointly

developed with Singtel and its cyber security

arm Trustwave, the managed Unified Threat

Management (UTM) solution will “help customers to

become more cyber resilient while adopting the Internet

of Things and the benefits of Big Data aboard their

fleet,” the company said.

Dryships acquires another kamsarmax for $24m – SMN 30th April

Dryships has inked an agreement with an unaffiliated

third party to acquire one 82,129 dwt kamsarmax bulker

carrier built in 2014.

The company will finance the total gross purchase price

of approximately $24m and expects to take delivery of

this vessel during the second quarter of 2017.

The announcement comes as Dryships has also taken

delivery from of the previously announced 113,644 dwt

aframax newbuilding tanker.



George Economou, chairman and ceo, said: “We are

very excited to have started taking delivery of our

previously announced acquisitions and also continue to

grow our fleet with a new acquisition of one more

modern vessel.

“The DryShips new era has official started and is

expected to be accretive to our earnings and cash

flows.”

Pirate attacks up in Q1 as Somali hijackings return – SMN 9th May

A rising incidence of maritime crime with 48 criminal

incidents reported in just the first quarter “poses real

danger to the maritime industry,” warns UK-based

maritime security security specialist MAST (Maritime

Asset Security & Training).

Political instability and harsh living conditions in Somalia

and Yemen have contributed to a return of maritime

attacks in that part of the world, with 22 incidents

reported in Q1, it says. This despite the “substantial

suppression’ of piracy by the international community

that took place since the problem was at its peak there

in 2012.

The latest rise in the number of attacks means that the

Indian Ocean area has become “a potentially dangerous

route for commercial vessels and trade into Europe

again,” according to MAST coo Gerry Northwood,

former Royal Navy counter-piracy commander

But the problem is not geographically confined since

Southeast Asia has also seen a rise in attacks with 17

maritime crime incidents recorded across Indonesia, the

Philippines and Malaysia in Q1, while other criminal

activity occurred in South Asia (4) and South America

(5).

Of the 48 incidents in the first three months of this year,

36 involved a ship being boarded by unknown assailants

resulting in a robbery, with some cases leading to the

ship being hijacked.

Damen in groundbreaking 3D printed propellor project – SMN 16th May

Damen Shipyards Group is looking to make a major

move forward with 3D printing in the shipping industry

with a 3D printed, class approved propellor.

Damen has joined a cooperative consortium with

RAMLAB, Promarin, Autodesk and Bureau Veritas (BV) to

develop the world’s first class approved 3D printed

ship’s propeller, dubbed the WAAMpeller.

The propeller will be based on a Promarin design that is

typically found on a Damen Stan Tug 1606. The

1,300mm diameter propeller weighs roughly 180kg.

Damen's involvement in the project resulted from one

of its inhouse student research programmes.

“Three students from Delft Technical University were

investigating the potential of 3D printing for us. They

brought us into contact with the other members of the

consortium,” explained Kees Custers, project engineer in

Damen’s Research & Development department.

Port of Rotterdam’s RAMLAB will fabricate the

WAAMpeller from a bronze alloy using the Wire Arc

Additive Manufacturing (WAAM) process and BV will be

involved in classing the propellor.



The first propellor is expected to be 3D printed this

summer and followed by full-scale trials.

“We will be performing a comprehensive programme

that will include bollard pull and crash test scenarios.

Our ambition is to demonstrate that the research phase

for 3D printing in the maritime sector is over, and that it

can now be effectively applied in operations,” Custers

said.

ABB leads electrification of ‘world’s largest emission-free ferries’ – SMN 17th May

Work is underway at Öresund Dry Docks in Sweden on

electrification of two Scandlines/HH Ferries vessels, set

to become what are claimed will be the world’s largest

emission-free ferries.

ABB Marine will deliver batteries, an energy storage

control system and Onboard DC Grid technology for the

vessels, as well as revolutionary “robot” stations at

either end of the route that will automatically plug in

the ferry to shoreside power when it arrives, thereby

maximising the charging period.

ABB is following a controlled progression towards

autonomous shipping “through a step-by-step

development process” that is advancing from isolated

operations towards connected, integrated, remote and

finally autonomous operations, explained senior vp

Sakari Sorsimi, head of ABB business unit Marine and

Ports, Finland.

The company is one of the leading pioneers in the

digitalisation of shipping and has already opened

Integrated Operation Centers in Asia (Singapore),

Europe (Helsinki and Billingstad, Norway) and the US

(Miami) where ship data is received and monitored.

Currently data from some 600 connected vessels is

being monitored, with Carnival Cruise Lines among

ABB’s reference clients. An internal ABB study had

shown that remote monitoring of machinery reduced

maintenance costs by 50%.

Suicide the top cause of seafarer deaths – SMN 18th May

The UK P&I Club is putting the spotlight on seafarer

mental health with suicide the cause of 15% of deaths at

sea.

As a career seafarers are second most at risk from

suicide Anuj Velankar, senior loss prevention advisor, UK

P&I Club, told a seminar in Singapore on Tuesday. The

career with the highest risk was being a veterinary

physician, which was explained due to a tendency

towards self-medication and a ready access to drugs.

In the case of seafarers young age, isolation and the

impact of social media were all cited as factors. Velankar

noted that there were constantly reports of younger

crew onboard, who were not experienced – “these are

the people most at risk of mental health issues”.

The result of mental health issues among seafarers is

that suicide is the highest cause of fatalities at sea,

accounting for 15% of deaths according to the UK P&I

Club. “This what kills the most number of seafarers,”

Velankar stated.



Young seafarers such as cadets were seen as particularly

at risk. “When you look at cadets the figures are even

more horrifying,” he said. Some 40% of 11 deaths of

cadets over the last 10 years came as the result of

suicide.

He highlighted the case of an 18 year South Korean

cadet who disappeared off the coast of India one month

into a 10 month contract, in an apparent suicide. Other

crew members noted he had seemed depressed and a

diary found in his possessions gave a picture of very

depressed mental state.

In terms of the causes of depression among seafarers

Velankar said they were looking at social media, work

stress, and hours of work and rest.

In the terms of social media, whereas in the past

seafarers had very little contact with home, now were

aware of all the problems happening at home.

“Maybe ignorance was bliss,” commented Lee Wai Pong,

regional advisor, UK P&I Club, who previously served as

a captain.

With smaller crews social media also combines with an

issue of isolation for seafarers.

“This is an issue we need to focus on,” said Velankar.

Master of containership commits suicide on voyage to UK – SMN 25th May

The Master of a containership committed suicide on a

voyage from New York to Tilbury in the UK.

The Apostleship of the Sea said the containership, Santa

Bettina, was a week into its voyage when the master

apparently took his own life on board, leaving its crew

members distraught and traumatised.

AoS port chaplain Fr Colum Kelly along with two

chaplains from other seafarer charities went onboard

the vessel when it arrived in Tilbury on 21 May to

provide support to the crew.

“All three of us spent time listening to the crew and of

the stress that they had been feeling during the voyage.

It emerged the death took place one week into the

voyage. It was the first time the crew had sailed with

that captain so they knew very little about him,” said Fr

Colum.

“His body was laid in his sealed cabin for the remainder

of the voyage. Particularly distressed was the young

seafarer who had discovered the body. It was the first

time he had seen a corpse.”

A Mass was said at the request of the crew. A new Polish

Master, who has previously worked with the crew and

was well liked, has now joined the vessel.

Last week suicide was highlighted as the top cause of

deaths among seafarers accounting for 15% of all

fatalities according the UK P&I Club.

Konecranes races ahead - inks partnership with F1 driver Bottas – SMN 22nd May

Racing ahead Konecranes has become the “official

partner” of Finnish Formula 1 driver Valtteri Bottas.

The agreement, announced in Madrid after the Spanish

Grand Prix at Konecranes annual management

conference, sees a global marketing cooperation

between the handling equipment provider and the race

winning F1 driver until March 2018.



Panu Routila and Valtteri Bottas

“Valtteri has all the makings of a true champion and

we’re thrilled to work together with him on this

mutually-beneficial co-operation,” says Panu Routila,

ceo of Konacranes. “It’s still early in the 2017

motorsports season and Valtteri already has some great

results with his new team, which makes the partnership

even more exciting.”

The partnership encompasses web, social media,

outdoor advertising, videos, and events, and Bottas will

Konecranes logo on his personal website and social

media domains, as well as on his race overalls.

“I’m very happy to make an agreement of this kind with

Konecranes, a company that aligns so well with my

background and what I personally believe in,” says

Bottas. “This is about having proud roots in Finland, yet

working around the world. About using cutting-edge

technology and purpose-built equipment that brings

together some of the best engineering and teamwork on

the planet.”

Bottas drives for the Mercedes F1 team and is currently

running third in the world championship.

The Konecranes and Valtteri Bottas partnership can be

followed at powermeetscontrol.com, and in social

media with the #powermeetscontrol hashtag

Bottas has previously competed in a welding

competition and we await with interest to see if the

Konecranes partnership will feature racing rail mounted

gantry cranes.

Cargo stranded in Chile customs strike – SMN 26th May

Chile’s customs association (National Association of

Customs Officers of Chile- ANFACH) called an indefinite

strike last Wednesday that is affecting Chilean ports,

airports and borders and causing disruption and delays

top freight movement up and down its 6,000 km-long

Pacific coastline. Striking workers number around 1,900.

Day one of the strike saw some 850 Bolivian trucks

struck at the border unable to cross into Chile, reported

Xinhua. According to the Bolivian president of exporters,

Wilfredo Rojo, the strike prevented Bolivia from moving

goods worth $5m a day to and from Chile.

Only special cases attended, such as those related to

humanitarian support and dangerous cargo, said

ANFACH.

"The Government represented by the Undersecretary of

the Treasury has not known the protocols of agreement

signed with ANFACH on 28 May 2015 and 23 November

2016, when presenting a counter proposal that does not

take over the commitments acquired with the customs

workers. Consequently, we call for an indefinite National

Stop of activities from 08:00 hrs. Of Wednesday 24 May

2017 ", the union said in a statement.

The National Customs Service informed that in order to

ensure operational continuity and ensure the flow of

foreign trade and the circulation of vehicles and

passengers, the entity implemented a contingency plan

at all border control points, ports and airports.

This coordination work is implemented from Arica in the

North of Chile to Punta Arenas in the South to facilitate

the completion of customs formalities, giving priority to

the dispatch of dangerous, perishable or emergency

cargoes, as medicines, the entity said. In addition, this

plan monitors in detail the status of all control points


News AbstractsDry Bulk Terminals Group – May 2017 – Issue 168where Customs is present, in order to respond quickly to

any demands for attention that may arise in the context

of the contingency.

Although port workers are currently not under strike,

but some shipments may be delayed due to industrial

action by other public sector services.

The National Agricultural Society [SNA] warned of the

negative effects of the strike by public sector workers,

especially of the Agriculture and Livestock Service [SAG].

Spain: Second time lucky – PSM 5th May

Spain is about to launch a second attempt to reform its

stevedoring industry in order to put it on a more

competitive footing and thereby achieve compliance

with European Union (EU) requirements.

Early in April, Inigo de la Serna, Minister of Public

Works, Spain, declared that the Government would

present a Royal Decree with associated regulations that

will reflect the results of the mediation that followed

Spain’s Parliament voting against the original port labour

reform initiative in mid-March. At the time of writing,

the precise date of the presentation of the new law to

Parliament was unclear with some parties expecting it in

late April and others in early May.

In the immediate aftermath of the rejection of the

original Royal Decree, the unions Coordinadora, UGT,

CCOO, CIG and CGT agreed to suspend planned strikes

and together with port employers to engage with a

Mediator to find a solution to the reform initiative. From

the Government perspective this was also critical in

order to avoid significant fines from the EU due to non-

compliance with EU law. Indeed, early in April the Court

of Justice of the European Union communicated to the

Spanish Government its intention to implement

disciplinary proceedings which could see the imminent

implementation of daily fines of up to €134,000.

Arriving at a mediated solution satisfactory to both

sides as well as government has, however, not been

easy.

At the end of March, the stevedoring unions and port

employers discussed an agreement on various aspects of

labour reform including the reduction of stevedoring

salaries by 10%. The average port worker salary in Spain

is high, at €68,000. The government was not, however,

supportive of these arrangements.

The main stumbling block for government is related to

worker compensation for retrenchment/early

retirement and it is cargo-handlers' body ANESCO’s wish

to establish templates for this with these to be written

into law. The Spanish Government stated immediately

following the release of the proposals that they would

be “contrary to the European ruling” which in December

2014 initiated the process of the liberalisation of

member state’ port sector labour arrangements.

The reaction of the unions to the government stance

was, as might be expected, one of significant indignation

with the unions saying that they were ready to embrace

reforms that seek to achieve a more competitive port

sector, but that the government is not supportive of

their efforts and those of the employers.

In arriving at a ‘solution’, ANESCO has had to factor in

the ongoing threats by stevedoring unions of strikes,

slow working and other measures that serve to damage

the sectors profitability. The Valencia Port Stevedoring

Society (SEVASA), for example, estimates losses of

€2.5m per day resulting from union measures designed

to resist port sector reforms. This includes major losses

arising from vessels having to be diverted to other ports

– 17 vessels at the time of writing – with these diverted

to Barcelona, Sines, Portugal and Gioia Tauro, Italy.

SEVASA further highlights the potential for long-term

damage to the Valencia brand, both nationally and

internationally.


News AbstractsDry Bulk Terminals Group – May 2017 – Issue 168 Undoubtedly, key port employers would like to see a

more comprehensive reform package but achieving this

in the face of continual threats of slow working and all-

out strikes is extremely challenging. Equally, ANESCO

has suffered from not being an entirely unified body. It is

well known that certain port employers in Barcelona and

Algeciras are closer to port unions and not so ardent in

their pursuit of port sector reforms; they benefit by not

being heavily targeted for industrial actions against the

proposed reforms.

*******

PRESS RELEASES

Siwertell signs unloader order for new UK biomass-fuelled power plant

25th May

25 May 2017 – Coldharbour Marine, developer of a

unique in-tank, in-voyage and inert gas-based ballast

water treatment system for large tankers, bulkers and

LNG vessels, has signed an agreement with Sembcorp

Marine that will see the latter offer the Coldharbour

GLD™ BWT as part of the Sembcorp Marine Green

Technology Retrofit (GTR) solutions for ship owners.

The GTR solutions provide carefully evaluated ballast

water treatment systems from a select group of

equipment manufacturers with whom Sembcorp Marine

is working closely. Coupled with expert technical

assistance from Sembcorp Marine, the GTR solutions

ensure that ship owners are able to select and install the

most appropriate technology for their vessels.

Coldharbour CEO Andrew Marshall said: “We are

delighted to sign this agreement with Sembcorp Marine.

We have always maintained that no single technology is

suitable for all vessel types and for all operating

requirements. Our ballast water treatment systems

target the largest vessels with the highest pumping

rates, largest ballast volumes and longest ballast legs.

For many ballast water treatment technologies, these

three elements combined would have translated into a

perfect storm of terminal delays and unrecoverable

costs for owners, which by comparison, would make the

initial cost of installing a ballast water treatment system

pale into insignificance.”

Mr Marshall said the Coldharbour GLD™ system carries

full International Maritime Organization type-approval

issued by the UK Maritime and Coastguard Agency;

Lloyd’s Register type-approval; and US Coast Guard

Alternate Management Systems acceptance. It is

currently undergoing full US Coast Guard type-approval.

As the global marine industry prepares for the

implementation of the Ballast Water Convention on

September 8th this year, there is still a considerable

level of confusion and uncertainty surrounding the

questions of suitable equipment choice for different

types of vessel and securing a successful retrofit

installation strategy.

Addressing these concerns, Sembcorp Marine Executive

Vice President and Head of Repairs and Upgrades Lee-

Lin Wong said the company had examined various

ballast water technologies and established

collaborations with the best manufacturers around the

world over the past 24 months.

She said: “Our one-stop GTR solutions have everything

needed to achieve successful ballast water treatment

outcomes – from the analysis of requirements, system

selection, scanning and engineering, to full installation

and commissioning of equipment. We are confident that

ship owners working with us and our chosen equipment

partners such as Coldharbour, will no longer be

confused by ballast water treatment requirements.”

Ms Wong added that Sembcorp Marine’s GTR solutions

will also include ultra-violet and electro-chlorination-

based systems so as to offer the most suitable


News AbstractsDry Bulk Terminals Group – May 2017 – Issue 168technologies for all vessel types and operating

requirements.

*******

CARGOTEC CORPORATION

17 MAY

Siwertell, part of Cargotec, has signed a contract with

the Spanish-Korean consortium, TR-Samsung, for a

Siwertell ship unloader to support a new biomass-

fuelled power plant under construction in Teesside,

Middlesbrough, UK. The order was booked in Cargotec's

fourth quarter 2016 order intake and the delivery will

take place in October 2018.

"The plant's owners want to employ the best available

technology for its new facility," says Peter Goransson,

Siwertell Sales Manager & Senior Advisor. "It's crucial

that the high-capacity fuel-delivery system overcomes

the challenges of safety, cargo degradation and

environmental impact."

Limited space meant that the structural footprint of the

unloader had to be as small as possible, while the tail-

end of the gantry had to be able to move aside to allow

passage behind the equipment.

"We provided extensive references demonstrating our

ability to meet the owner's high standards and design

criteria," says Mr Goransson. "Important factors

included compliance with environmental directives, a

proven track record of good reliability and safety, high

through-vessel discharge rates and the ability to handle

sensitive products with minimal cargo degradation or

breakages."

Siwertell will deliver a tailor-made, rail-mounted ST

790-type D Siwertell unloader, which will be located

close to the 299MW plant in Teesport. It will discharge

wood pellets and wood chips to a matched Siwertell

jetty conveyor with a movable transfer trolley, supplied

as part of the contract. Siwertell biomass unloaders are

also equipped with a new-generation safety system to

mitigate the risks of fire and dust explosion when

handling biomass in an enclosed space.

The unloader has a rated average capacity of 1,200t/h

and a maximum rate of 1,320t/h, designed to meet the

plant's requirements of 16,000 tonnes/day. It is

equipped with a dual truck loading system for

continuous direct truck loading at a rate of 300t/h. This

is a redundancy feature that allows operations to

continue if the shore conveying system fails.

*********Clarkson commentaries – DBTO (Volume 23, No 5 – May 2017)Dry Bulk Supply & Demand HighlightsIn April 2017, average bulker earnings remained

relatively steady m-o-m at $11,096/day, with lower

Capesize and Supramax earnings offset by improved

earnings in the Panamax and Handysize sectors. Overall,

bulker earnings remained notably above the 2016

average of $6,218/day and more in line with the

$10,765/day average in the post-financial downturn

period of 2010-16. Meanwhile, the pace of increase in


News AbstractsDry Bulk Terminals Group – May 2017 – Issue 168bulker asset prices has slowed in recent weeks,

following robust gains in March. At the end of April, the

bulker secondhand price index stood at 106 points, up

3% m-o-m, and up 30% compared to the end of 2016.

Growth in seaborne dry bulk trade is projected to

improve in 2017 to 3.3%, from around 1% in 2016. This

largely reflects firm Chinese demand, with China’s total

iron ore and coal imports up 13% y-o-y in January-April.

Some support to Asian dry bulk volumes is also likely to

emerge from China’s ‘One Belt One Road’ programme.

However, there remain concerns over the sustainability

of strong growth in Chinese dry bulk imports in 2H 2017,

particularly given uncertainty in China’s real estate

market. Meanwhile, although seaborne coking coal

trade has been disrupted in recent months by the

impact of Cyclone Debbie on Australian exports, global

coking coal trade is still projected to grow moderately in

2017.

Bulkcarrier demolition eased further in April, with 6m

dwt scrapped in the first four months of 2017, down

68% y-o-y. Deliveries have also slowed, with 19m dwt

delivered in January-April, down 10% y-o-y. Overall, the

bulker fleet is expected to grow by around 3% in 2017,

compared to an average 5% p.a. in 2012-16.

Overall, continued conservative fleet growth and robust

Chinese dry bulk imports have helped to improve the

fundamental balance in the dry bulk market in the year

to date. While there remains uncertainty over the

outlook, especially regarding the sustainability of strong

Chinese dry bulk import growth, 2017 so far has clearly

seen tangible market improvements from the

historically depressed conditions seen throughout most

of 2016.

Seaborne Iron Ore Trade

CommentaryGlobal seaborne iron ore trade is projected to increase

5% to 1.5 billion tonnes in 2017. This is expected to be

largely driven by the increasing availability of high

quality and low cost iron ore from Australia and Brazil,

as major iron ore miners in both countries ramp up

production and exports. Current projections indicate a

respective 4% and 6% increase in Australian and

Brazilian iron ore exports in 2017, to reach a combined

1.2 billion tonnes. This is expected to account for around

three quarters of growth in global seaborne iron ore

trade in 2017. On the demand side, Chinese seaborne

iron ore imports are projected to increase 7% to around

1.1 billion tonnes in 2017, driven by the country’s

increasing steel consumption. Iron ore shipments into

other Asian countries are expected to grow at a more

conservative rate of 1% to stand at around 243mt in

2017. Elsewhere, following three consecutive years

decline in seaborne iron ore imports into the EU,

shipments into the region are projected to increase 3%

to around 107mt in 2017.

Iron Ore NewsWhile increasing iron ore shipments from Brazil are

expected to be a key driver of global seaborne iron ore

trade expansion in 2017, the pace of the country’s

overall iron ore export growth in the year to date was

cut by a 17% y-o-y decline in April. Iron ore shipments

from Brazil hit a two year low of 13mt in April,

contributing to a total 64mt in the first four months of

the year. This represented a 1% y-o-y rise, compared to

7% y-o-y in Q1 2017. The sharp decline in April partly

reflected port disruptions, with an accident at the port

of Itaguai (42mtpa throughput) suspending activity for

10 days. Four Capesize vessels preparing to load ore at

the terminal were consequently reintroduced into the

market and sent to alternative ports. Following recent

disruptions, the forecast for the country’s iron ore

exports in 2017 has been revised down to 393mt.

However, this would still represent a 6% increase,

reflecting expectations of a continued ramp-up in output

in the remaining months of the year. Of particular note

is Vale’s S11D mine, which started operations in

December 2016 and produced 2.5mt for export in Q1

2017. The pace of output at the mine is expected to

reach around 20mtpa in 2017, towards a target of

90mtpa by 2020.


News AbstractsDry Bulk Terminals Group – May 2017 – Issue 168Iron ore shipments from India increased more than

threefold y-o-y to stand at 11mt in the first three

months of 2017. This represented the largest volumes of

Indian iron ore exports in a Q1 period, since before the

government’s crackdown on iron ore mining in early

2012. After several years of minimal exports from the

country, India’s top exporting state of Goa resumed iron

ore output in August 2015 and production and exports

have gradually ramped-up ever since. The sharp increase

in exports in the year to date reflects Indian iron ore

miners’ responses to the high global iron ore price

environment. Current projections indicate a five year

high in Indian iron ore exports of around 31mt in full

year 2017.

Seaborne Coking Coal Trade

CommentaryGlobal seaborne coking coal trade is projected to

increase 2% to 255mt in 2017. This is expected to be

largely driven by a 10% rise in coking coal shipments into

China, reflecting the country’s firm domestic steel

consumption and recovering steel output in the year to

date. Indeed, Chinese seaborne import demand is

expected to account for over 60% of growth in global

seaborne coking coal imports in 2017. Elsewhere, coking

coal shipments into the EU are expected to increase 2%

to around 35mt in 2017. On the supply side, shipments

of coking coal from Australia, which have accounted for

over 60% of seaborne coking coal exports in recent

years, were disrupted by Cyclone Debbie in March. This

is expected to result in a 2% decline in Australian coking

coal exports to around 155mt in 2017. However,

increasing seaborne coking coal exports from the US and

Russia are expected to offset the loss from disrupted

Australian coking coal exports in full year 2017. For

more detail regarding Cyclone Debbie’s impact on global

seaborne coking coal trade, see Commodity Countdown,

below.

Coking Coal NewsIndian coking coal imports declined 6% y-o-y to 9.9mt in

the first three months of 2017. This reflected

Indian steel producers’ responses to highly inflated

coking coal prices in Q1 2017. Furthermore, India’s

domestic coking coal output continues to increase, with

the state-backed Coal India announcing an 8%

production growth target to 60mt in the 2017/18

financial year. While this target is widely seen as

optimistic, rising domestic output is nonetheless likely to

undermine the country’s coking coal import demand in

the coming years. Yet, Indian coking coal imports are still

projected to recover in the remaining months of 2017,

with many of the country’s steel producers expected to

respond to a correction in global coking coal prices.

Furthermore, India’s increasing steel output, which rose

14% y-o-y to 26mt in Q1 2017, is expected to continue

to stimulate the country’s coking coal import demand in

the coming months. Current projections indicate a

marginal increase in Indian coking coal imports to

around 47mt in full year 2017.

Chinese seaborne coking coal imports increased 30% y-

o-y to reach 11mt in the first three months of

the year. This partly reflected a 4% y-o-y decline in the

country’s domestic coking coal production to 102mt in

the period, despite Beijing’s surprise decision not to

reintroduce production caps on the country’s coal

miners in February. Firm Chinese coking coal demand in

the year to date has also been driven by the country’s

robust steel demand, which saw Chinese crude steel

output rise 4% y-o-y to 200mt in the first three months

of the year. However, there are increasing concerns

regarding the drivers of Chinese steel demand,

particularly for the country’s real estate development in

the coming months. As such, current projections

indicate a 10% increase in Chinese coking coal imports

to 39mt in full year 2017, accounting for a slowdown in

the remaining months of the year.

Seaborne Thermal Coal Trade

CommentaryGlobal seaborne steam coal trade is projected to

increase 3% to around 915mt in 2017. This is expected

to be largely driven by a 9% rise in steam coal shipments

into China, to around 180mt in 2017. Indeed, Chinese


News AbstractsDry Bulk Terminals Group – May 2017 – Issue 168import demand is expected to offset a respective 5%

and 9% decline in steam coal shipments into India and

Hong Kong in 2017, supporting a 3% increase in total

Asian steam coal imports to around 724mt in the full

year. Elsewhere, seaborne steam coal shipments into

the EU are projected to drop 3% to an

eighteen year low of 100mt in 2017, largely reflecting

easing coal demand and an ongoing shift to gas fired

power generation, especially in Germany and the UK.

However, French steam coal import demand has been

very firm in the year to date, largely reflecting the

impact of disruptions to the country’s nuclear power

generation in recent months. On the supply side, global

seaborne steam coal trade is expected to be largely

supported by a 2% increase in shipments from Australia

to around 228mt, while US steam coal exports are

projected to rise 21% to around 18mt.

Steam Coal NewsChinese seaborne steam coal imports rose 35% y-o-y to

40mt in Q1 2017. This reflected the slower than

expected growth in domestic coal output, despite

Beijing’s decision not to reintroduce a 276-day annual

production cap on the country’s coal mining industry in

February. Chinese steam coal output reached 669mt in

Q1 2017, representing a 1.5% y-o-y rise: somewhat short

of the country’s steam coal consumption growth.

Indeed, Chinese thermal power generation rose 8% y-o-

y to 1.1 GWh in Q1 2017. However looking forward,

Chinese steam coal import growth is expected to ease,

partly due to expectations of a crackdown on low quality

imported coal and lignite, designed to support domestic

coal prices and subsequently the country’s coal miners.

Current projections indicate a 9% y-o-y increase in

Chinese seaborne steam coal imports to 180mt in 2017.

South Korea’s recently elected President Moon Jaein has

outlined plans to shift the country’s power

generation portfolio towards gas and renewables, to the

cost of coal and nuclear power generation. This is

expected to result in the closure of around five of South

Korea’s 50 coal fired power plants in the coming 18

months, undermining the country’s steam coal import

demand in the coming years. However, such measures

would be unlikely to impact the country’s steam coal

imports in 2017. Current projections indicate a 4% rise in

South Korean steam coal imports to 105mt in 2017,

following a sharp rise of around 20% y-o-y in the first

three months of the year. However, import demand is

expected to be impacted by the introduction of a new

coal import tax in early April 2017, which is expected to

disproportionately impact low quality coal.

Indian steam coal imports are projected to decline 5% to

a five year low of around 140mt in 2017. This largely

reflects expectations of a continued ramp-up in the

country’s domestic steam coal output, with Coal

India’s output up 6% y-o-y to 215mt in the first three

months of the year. This exceeded growth in India’s coal

fired power generation, which reached 2% y-o-y.

Grain Imports

Grain Trade NewsGlobal wheat and coarse grain trade is projected to

decline 1% to around 342mt in the 2017/18 crop

year. The projected slowdown largely reflects

expectations of a 3% decline in global wheat trade,

from an expected historic high of 171mt in 2016/17

down to around 166mt. Of particular note is a projected

9% drop in wheat shipments into Asia in 2017/18. This

largely reflects projections for an improved harvest in

India and the reintroduction of the country’s import

duty contributing to a 69% drop in wheat imports into

India to 2mt in 2017/18. Conversely, global corn trade is

projected to grow 1% to total 139mt in 2017/18. This is

expected to be driven by a firm rise in shipments from

Brazil, following an improved harvest in early 2017. Total

corn shipments into Asia are projected to rise 3% to

around 47mt in 2017/18, supported by increasing

demand in a number of developing countries in the

region.

Grain Imports

Grain Trade News


News AbstractsDry Bulk Terminals Group – May 2017 – Issue 168Total wheat and coarse grain imports into Sub- Saharan

countries are expected to drop 6% to around 27mt in

the 2017/18 crop year, which would represent the

lowest level since 2014/15. This partly reflects

projections for a continued slowdown in South Africa’s

grain import demand, largely given the country’s

growing grain stockpiles and expected healthy corn

harvests. Reports indicate significant improvements to

the country’s field conditions in recent months. Current

projections indicate a 35% drop in South Africa’s total

grain imports to 3mt in 2017/18. Meanwhile, total grain

imports into Zimbabwe are projected to drop 15% to

around 1mt in 2017/18, while imports into Ethiopia are

projected to drop to 1.6mt, down 16% from the 2016/17

crop year. Grain import demand in both countries is

expected to be undermined by improved domestic

wheat and corn harvests.

Grain Exports

Grain Export NewsBrazil’s corn harvest is currently projected to rise 37% to

92mt in 2016/17, which would represent a record high

for the country. This reflects the planting of higher than

expected volumes of safrinha corn within the optimum

timeframe in Brazil’s central state of Mato Grosso, which

accounts for around two thirds of the country’s total

corn output. Looking forward, the record volumes of

Brazilian corn are expected to enter the market in the

coming months, suppressing domestic corn prices and

stimulating the country’s exports. Current projections

indicate an 85% rise in the country’s total corn exports

to 27mt in 2017/18, although this partly reflects a

particularly low base in 2016/17, due to disrupted

output. This would see Brazil cement its position as the

world’s second largest corn exporter, behind the US

which is projected to export 49mt in 2017/18.Minor Bulk Trades

CommentaryFollowing a 13% y-o-y decline in 1H 2016, scrap metal

shipments from the US increased 22% y-o-y in the

remaining six months of the year. This initial decline,

followed by a recovery largely reflected the levels of

competition from Chinese steel products exports, which

were firm in the first six months of 2016, but declined

somewhat in 2H 2016. Overall US seaborne scrap

exports increased 4% to stand at 12.5mt in full year

2016, accounting for around 13% of global scrap

exports. This firm momentum from the world’s leading

scrap exporter in the latter half of 2016 also continued

into early 2017, with shipments up 22% y-o-y in the first

three months of the year. Much of the growth was

supported by shipments to China itself, which rose 160%

y-o-y to 0.3mt in Q1 2017. Looking forward, current

projections indicate a 35% y-o-y increase in US scrap

exports to around 15mt in full year 2017.

Bulkcarrier Fleet

Commentary– Capesize Fleet TrendsIn the first four months of 2017, the pace of Capesize

newbuild deliveries eased somewhat. In total, 39

Capesize units of a combined 7.8m dwt entered the fleet

in the period, representing a two year low. Meanwhile,

the dearth in Capesize contracting activity continued in

the opening months of 2017. Indeed, there have only

been two Capesize orders with a combined 0.5m dwt

placed since April 2016. As a result, the Capesize

orderbook has contracted in the past 12 months. At the

start of May 2017, the Capesize orderbook consisted of

122 units of a combined 31.7m dwt, representing an

eleven year low and a 40% y-o-y decline in terms of

tonnage.

Fleet Watch – To 1st May 2017Capesize vessels:

39 delivered 15 scrapped 0 ordered

Commentary – Panamax Fleet TrendsAt the start of May 2017, the Panamax fleet consisted of

2,494 units of a combined 200m dwt. In terms of

tonnage, this represented a 2% increase since the start

of the year, compared to an average growth rate of

below 1% per annum in 2015 and 2016. The growth in


News AbstractsDry Bulk Terminals Group – May 2017 – Issue 168the Panamax sector in the year to date has been

supported by a significant reduction in the levels of

demolition activity, with a total of 14 units, of a

combined 1.0m dwt removed from the fleet in January-

April, representing a 79% y-o-y drop in terms of

tonnage. Meanwhile, Panamax deliveries totalled 61

units of a combined 5.0m dwt in the first four months of

the year, in line with the pace of deliveries throughout

2016.

Fleet Watch – To 1st May 2017Panamax vessels:


Commentary – Handysize/Handymax Fleet TrendsBy the start of May 2017, the size of the Handysize

orderbook had contracted to the point of totalling only

208 units of a combined 7.3m dwt. In terms of tonnage,

this represented an eleven year low and a 24% decline

since the start of the year. The contraction in the

Handysize orderbook reflected the sharp decline in the

levels of newbuilding interest in the sector since the

start of 2016. Indeed, in total only nine Handysize units

of a combined 0.2m dwt have been reported ordered in

the sixteen month period since the start of 2016, only

three of which have been placed in 2017. This compared

to an average of 178 Handysize vessels, or 6.2m dwt in

terms of tonnage, contracted on an annual basis in the

period 2011-15.Fleet Watch – To 1st May 2017Handymaxes:


Handysizes:


Commodity Countdown

Estimating The Impact Of Debbie’s Disruption Down UnderAustralian coal exports often face weather disruptions

early in the year. However in March 2017, Cyclone

Debbie caused levels of damage not seen since Cyclone

Yasi in 2011, which resulted in an 18% drop in the

country’s coking coal exports that year. As Australia

accounts for over 60% of seaborne coking coal exports,

even the less severe damage from Cyclone Debbie may

have global consequences.

The Damage In ContextIn February 2011, Cyclone Yasi severely damaged coking

coal mines in Queensland, Australia, resulting in a 26mt

drop in the country’s coking coal exports and a 4%

decline in seaborne coking coal trade in the full year.

While Cyclone Debbie, which hit Queensland in March

2017, also damaged coal mines, the impact was less

significant than in 2011 and most mines reopened

within a week. However, this time heavier damage was

sustained by the rail lines connecting coal mines to

Dalrymple Bay and Hay Point.

The Immediate, Local ImpactIn perhaps the clearest indication yet for the scale of

disruption, the 129mtpa Goonyella rail network’s

operator made a 12mt downward revision to its coking

coal railing guidance for the financial year ending in June

2017, following the network’s five week closure in the

aftermath of Cyclone Debbie. There is greater

uncertainty regarding the overall impact on Australia’s

coking coal exports in the full year, largely given that

much depends on the recovery of volumes railed in 2H

2017. Reported estimates for the impact on Australian

coking coal exports in full year 2017 vary between 5mt

and 20mt.

‘Worst Case’ Global Scenario?Given the uncertainty regarding Australian coking coal

exports, there are a range of possible scenarios for the

global impact. In a high-case disruption scenario,

reflecting a drop of 12mt y-o-y in Australian coking coal

exports in Q2 2017, coupled with a slow 2H recovery (in


News AbstractsDry Bulk Terminals Group – May 2017 – Issue 168line with 2011’s), total Australian exports in 2017 could

fall 13mt, equivalent to 5% of global seaborne coking

coal trade in 2016.

A More Likely Outcome?However, assuming that Australia’s exports recover

more quickly in 2H 2017 than in 2011, it has been

suggested that Australian exports in full year 2017 could

drop around 4mt. Under this ‘base case’ scenario,

shipments by other exporters are also expected to rise

due to high coking coal prices. Indeed, US miners who

took advantage of high prices in 2011, raising exports by

24% to 59mt, have again boosted exports recently.

Projections indicate a 17% rise in US coking coal exports

to 39mt in 2017, driven by greater long-haul exports to

Asia. Combined with Russian export growth, this is

projected to support a 2% rise in global seaborne coking

coal trade in 2017, and a 3% rise in terms of tonne-

miles. So, Cyclone Debbie is set to affect seaborne

coking coal trade in 2017, with disruption recently

evident. However, even a ‘worst-case’ scenario indicates

a lesser impact on Australian exports than in 2011. In

addition, given rising shipments from other exporters,

the overall impact could be relatively limited, with global

coking coal trade still projected to grow at a moderate

pace in the full year.

And Finally.......

I had a couple of amusing captions for the picture in the April issue, most asking if the driver was sober or not! I don’t think Smit have anything to worry about just yet...

I thought this month I would ask you a few more puzzling questions so here goes;

1. What occurs once in a minute, twice in a moment and never in one thousand years?

*****

2. What has 4 eyes but can’t see?

*****

3. What starts with the letter “t”, is filled with “t” and ends in “t”?

*****



4. How do you make the number one disappear?

*****

Please feel free to send me any weird or strange pictures and I will try and fit them in.

*****

That is it for May.

Pictures and answers to [email protected] please!

Nic

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


http://www.fearnresearch.com/

http://www.fairplay.co.uk/

http://www.crsl.com/

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