· Web viewFor your personal interest and information. These News Abstracts are compiled by the DBTG Secretariat from direct sources. Publications including Fairplay (FP),and

News AbstractsDry Bulk Terminals Group – October 2017 – Issue 173

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 a slightly shorter selection of news extracts from October 2017. It has been another really busy month and with the Autumn meeting just a week away and I am buried in Word documents and presentations.

This issue is a little shorter than usual because it seems to have been a quieter month for articles that are suitable for DBTG Members. However, what is available looks promising for our industry. Positive news on markets, Baltic Index on a long time high and a story on a bulk carrier that will be powered by LNG.

As you all know, our next meeting is at the end of next week in Punta del Este, Uruguay. We are meeting immediately after the AAPA Latin America Congress which I will also be attending and speaking at.

Speaking at the AAPA Congress is a particularly pleasant task as it is the first time AAPA have included a session on Dry Bulk cargo. That DBTG has been

asked to speak is not only an honour but a mark of how we are viewed by the wider industry as the experts in our field.

I plan to speak to the assembled audience about the Dynamic Separation of bauxite which is a hot topic at the minute. You will see that the first article below is about the recent loss of a vessel carrying nickel ore. I do not wish to draw conclusions here but the researchers believe that their work in to the behaviour of bauxite will map across to other bulk cargoes like nickel ore, iron ore and coal fines, let’s see what the investigation in to this loss concludes.

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 AAPA Latin America Congress, 6th to 8th

November, Punta del Este, Uruguay DBTG Autumn Operational & Technical

meeting, 8th to 10th November, Punta del Este, Uruguay

IN THIS ISSUE Shipping Matters Economy/Finance/Trade Commodities Terminals/Ports Freight Markets

SHIPPING MATTERS

Ten crew still missing from sunken nickel ore carrier – SMN Oct 25th

1www.drybulkterminals.org

mailto:[email protected]

News AbstractsDry Bulk Terminals Group – October 2017 – Issue 173Dry bulk shipowners’ association Intercargo says it is

deeply concerned with the tragic loss of the 57,000dwt

bulk carrier Emerald Star on the morning of Oct 13 with

26 seafarers on board. To date, 16 crew members have

been rescued while 10 crew members are still missing.

“As long as there is still hope, our wishes are for the

missing crew to be found and the loss of life in this tragic

event to be minimized,” says the association.

Emerald Star was laden with Indonesian nickel ore on a

voyage from Indonesia to China when she sank about

150 nautical miles north-east of the Philippines.

Pending the results of a full casualty investigation.

Intercargo urges "extreme caution" when loading nickel

ore – which has a tendency to liquefaction and sloshing -

and other challenging cargoes, and stresses the

importance of adhering to the provisions in the

International Maritime Solid Bulk Cargoes Code (IMSBC

Code) to maximise safety in the transportation of dry

bulk cargoes.

With just 12.8m dwt scrapped this year dry bulk shipowners 'not helping their own cause' – SMN Oct 31st

Dry bulk shipowners are not helping their own cause by

a failure to scrap vessels, which will lead to an

“extremely volatile” market recovery warns Precious

Shipping.

In its third quarter results Precious Shipping noted that

demand had grown, as could be seen from the cargo

numbers from China, with the Baltic Dry Index (BDI)

rising to 1,356 points on 29 September. However, when

it comes to vessel supply Precious Shipping md Khalid

Hashim warned: “net increase in supply has exceeded

our most pessimistic expectations at 21.64m dwt easily

surpassing the entire net supply increase of 18.51m dwt

in all of 2016!”

On the scrapping front, which along with newbuilding

orders has been seen as key to the health of the dry bulk

market by Bimco, just 12.8m dwt had been scrapped by

the end of Q3 this year compared to 25.98m dwt a year

earlier. Overall net fleet growth in the first nine months

of this year has been 2.7%.

“If scrapping doesn’t accelerate, the BDI will continue to

fluctuate sharply, solely dependent on what the demand

side does. In other words, shipowners are not helping

their cause by not scrapping ships, making the recovery

in 2018 to 2020 slower, extremely volatile, and totally

dependent on demand continuing to outperform,”

Hashim warned.

Although the market improved in Q3 this year with the

BDI averaged 1,137 points in Q3 this year Precious

Shipping remained in the red, although losses narrowed.

The shipowner reported a net loss of $5.23m in Q3 2017

compared to a net loss of $24.75m in the same period a

year earlier.

“Overall, despite challenging market conditions, the dry

bulk market is in better shape than it was in 2016 and

there is reason for optimism,” Hashim added.Genco opens Singapore office as dry bulk market firms – FP Oct 18th

New York listed-dry bulk shipper Genco Shipping &

Trading announced on 17 October that it had opened an

office in Singapore to be closer to major cargo interests

and charterers, amid a rising market.


News AbstractsDry Bulk Terminals Group – October 2017 – Issue 173Ivo Kempenaer, formerly a senior Capesize broker with

Simpson Spence Young, has been appointed to helm the

Singapore office as vice-president and commercial

director.

Kempenaer, also designated Genco’s head of major

bulks, is experienced with iron ore and coal shipping,

having previously served as general manager, Pacific

chartering for EDF Trading Singapore Pte Ltd, where he

was responsible for expanding worldwide Capesize

trading activities. Kempenaer’s other appointments in

his 30-year career included heading BHP

Billiton’s Capesize department.

Genco’s expansion coincides with the rising tide in the

dry bulk shipping market, which is recovering after

sinking to an historic low in February 2016. On 17

October, the Baltic Dry Index gained 29 points to close at

1,552 points, with the Capesize index firming to 3,079

points.

As of 17 October, Genco’s fleet consists of 13 Capesize,

six Panamax, four Ultramax, 21 Supramax, one

Handymax, and 15 Handysize vessels with an aggregate

capacity of approximately 4,688,000 dwt

Genco chief executive officer John C Wobensmith said

that having a Singapore presence enabled the company

to benefit from the market recovery.

He said, “Genco continues to take important steps to

optimise our commercial strategy and enable the

company to more fully capitalise on its leading and

sizeable operating platform. We are excited to establish

a Singapore presence and grow our footprint globally,

supporting our efforts to offer a full-scale logistics

solution and strengthen relationships with leading iron

ore producers and charterers worldwide.”

Taiwan authorities look to refloat stranded bulker – FP Oct 17th

Taiwanese authorities are still working to refloat a post-

Panamax bulk carrier, three days after the vessel

became stranded in Taiwanese waters.

The vessel, 2013-built 95,717 dwt Harvest Sky, had just

discharged coal cargoes at the terminal of Taipei Linkou

Power Station in Linkou when engine

malfunction immobilised it on 14 October.

In a statement, Taiwan’s Maritime Port Bureau said that

at 1400 h local time on 16 October, its emergency

response team made a third attempt to refloat the

bulker, as bad weather has hampered operations in the

past three days.

The Harvest Sky, beneficially owned by Japanese

tonnage provider Abo Shoten, is operated by First

Marine Service Co., Ltd, the ship management arm of

Daiichi Chuo.

An official from the bureau told Fairplay, “As of 1400 h

on 17 October, our team is still working to refloat the

Harvest Sky. It’s hard to say if we can restart the vessel

today, because the waters are still choppy.”

The vessel owner had submitted a plan to refloat the

vessel and through a Taiwanese ship agency, deployed a

tug to the scene. However, this was inadequate to

refloat Harvest Sky.


News AbstractsDry Bulk Terminals Group – October 2017 – Issue 173Subsequently, Japan P&I Club, which insures the vessel,

engaged Nippon Salvage to carry out the refloating

attempt.

The bureau official added, “Yesterday, due to rough

waves, the salvage company’s personnel were unable to

board Harvest Sky to carry out an assessment. We were

hoping that by this morning, the salvage company’s

personnel would be able to complete the refloating and

recovery of any leaked oil. However, the sea conditions

are still not in our favour.”

POSCO to call for tenders to build LNG-powered bulker – FP Oct 20th

South Korean steel mill POSCO is to invite tenders to

build and operate an LNG-fuelled 180,000 dwt bulk

carrier on long-term timecharter transporting iron ore

from Australia to South Korea.

In preparation for the tender, the date of which has yet

to be announced, Daewoo Shipbuilding & Marine

Engineering (DSME) has developed an LNG fuel tank for

such a vessel. POSCO is supplying high manganese steel

to build the tank.

A POSCO representative said that the vessel would

replace an older vessel that the steel mill has been

chartering.

Based on prevailing Capesize newbuilding prices,

the vessel is likely to cost more than USD50 million.

As with all shipping tenders called by South Korean

cargo interests, only local shipbuilders and ship

operators are eligible to bid.

Korea Development Bank and other state-run lenders

are set to bankroll the project as part of the South

Korean government’s promotion of LNG bunkering.

Many Asian governments are seeing LNG fuel as a

solution to the International Maritime Organization’s

implementation of a global sulphur cap of 0.5% in

marine fuels in 2020.

In South Korea particularly, this offers new opportunities

to create new orders for LNG-fuelled ships for

shipbuilders hungry for business.

In July 2016, Ilshin Shipping ordered a 50,000 dwt LNG-

fuelled bulk carrier from Hyundai Mipo Dockyard (HMD)

for a long-term timecharter to POSCO. HMD is also using

high manganese steel from POSCO to construct the LNG

tanks for this vessel.

Yara to continue shipping NPK fertiliser by sea following Cheshire casualty – FP Oct 25th

Norwegian agricultural inputs producer Yara

International has said that it has no plans to stop

transporting its products by sea following the

spectacular decomposition of one of its cargoes aboard

a ship during the summer.

The group is the owner of the NPK (nitrogen-

phosphorus-potassium) fertiliser cargo which provoked

an emergency aboard the Bibby Line bulker Cheshire

when it began heating and billowing smoke while the

vessel was in the Atlantic off the Canary Islands in

August.

The 56,597 dwt, 2012-built Cheshire’s 24-strong crew

had to be evacuated by helicopter after the situation on

board became too threatening.

Yara has told Fairplay, however, that it has no plans to

change the way it transports its products by sea

following the incident, which follows others involving

NPK cargoes in recent years.

A group spokeswoman told Fairplay, “Decomposition of

product during transportation is very rare. Although we

are continuously looking to improve the way we

transport our products, we have no plans to stop using


News AbstractsDry Bulk Terminals Group – October 2017 – Issue 173sea transport to ship our products to agricultural

markets across the world.”

No explanation has yet been given for the

decomposition of the NPK aboard the Cheshire; which

was on its way from Norway to Thailand when the alert

was given, although contact with an on-board heat

source is thought to be the most likely cause.

The incident lasted for several days as the

decomposition spread to different holds aboard the

vessel and salvors were forced to wait to get a tow line

to it. A tow line was finally got to the abandoned vessel

on August 20 and it was taken to a position off Gran

Canarias before being towed on to the Spanish port of

Motril, which was deemed best-equipped to deal with it.

The unloading of the decomposed NPK began in Motril

on October 20 after the vessel had been in port for more

than a month.

Yara International acknowledged that some concern had

been expressed about the operation by local

environmentalists but insisted that, even in its

decomposed form, the NPK was “intrinsically safe”.

It said that the NPK from the Cheshire was being taken

to local warehouses and that it had received expressions

of interest from prospective customers looking to buy

the decomposed product at a reduced price.

Bibby Line has not far indicated what the state the

Cheshire is in following the incident nor whether the

incident has caused it to change its approach to the

transportation of NPK.

A company spokesperson told Fairplay that it was not

taking any particular action with regard to NPK cargoes

for the time being, adding that it did not expect to know

for several weeks or months what had caused the

incident aboard the Cheshire.

“This is not on the company’s agenda right now,” she

said. “Bibby needs to see through all the discharge and,

following that, do a proper assessment of the ship.”

The unloading of the NPK from the Cheshire is expected

to take 15 days in total. The company said that the

port’s stevedores were working only in daylight hours on

the vessel and that unloading was being further slowed

by cargo-sampling procedures.

Rolls-Royce, Google Cloud team up to try and make autonomous ships a reality – SMN Oct 4th Rolls-Royce and Google have made a pact to develop

further its intelligent awareness systems, which are

believed to be essential to making autonomous ships a

reality.

The new collaboration, claimed to be the first in the

marine sector, allows Rolls-Royce to use Google’s Cloud

Machine Learning Engine to further train the company’s

artificial intelligence (AI) based on object classification

system for detecting, identifying and tracking the

objects a vessel can encounter at sea.

Karno Tenovuo, Rolls-Royce, senior vice president ship

intelligence, said: “While intelligent awareness systems

will help to facilitate an autonomous future, they can

benefit maritime businesses right now making vessels

and their crews safer and more efficient. By working

with Google Cloud we can make these systems better

faster, saving lives.”

Eva Fors, head of Google Cloud sales Nordics, said: “By

exploring the possibilities presented by machine

learning, Rolls-Royce can combine the latest technology

advancements with its deep knowledge of the maritime

industry, ultimately bringing significant improvements to

the sector.”



Rolls-Royce will be able to tap on Google Cloud’s

software to create bespoke machine learning models

which can interpret large and diverse marine data sets

created by Rolls-Royce.

By accessing this software through the Cloud, the

models can be developed from anywhere in the world

and are accessible globally allowing thousands of users.

Models can therefore be trained on large quantities

(terabytes) of data. This will be essential as autonomous

ships become commonplace.

In the longer term, Rolls-Royce and Google plan to

undertake joint research on unsupervised and

multimodal learning. The two companies will also test

whether speech recognition and synthesis are viable

solutions for human-machine interfaces in marine

applications. They will also work on optimizing the

performance of local neural network computing on

board ships using open source machine intelligence

software libraries such as Google’s TensorFlow.

Rolls-Royce believes that intelligent awareness systems

will make vessels safer, easier and more efficient to

operate by providing crew with an enhanced

understanding of their vessel’s surroundings. This will be

achieved by fusing data from a range of sensors with

information from existing ship systems, such as

Automatic Identification System (AIS) and radar. Data

from other sources, including global databases, will also

have a role.

Clipper Bulk closing five offices in Asia and the Americas – SMN Oct 5th

Clipper Bulk is consolidating its business in three

locations in Europe, the US and Asia, closing down five

offices.

The Danish shipowner said that it was concentrating it

business in three hubs – Copenhagen, Hong Kong and

Houston. As a result it would be closing its offices in

Singapore, Beijing, Sao Paulo, Rio de Janeiro and

Stamford. The company said that with three hubs it

would be able to serve its customers more efficiently

and effectively “Within the last year, Clipper has grown

its operated bulk fleet from 100 to 150 vessels. We want

to make communication more effective and our

response time to market changes shorter. It is my belief

that both the company and our clients will be able to

feel the benefit of this change from day one,” said Peter

Norborg, group ceo.

Its offices in Barranquilla, Tokyo and Nassau will remain

to serve the local markets.

BahriBunge Dry Bulk joint venture opens up in Dubai – SMN Oct 5th

BahriBunge Dry Bulk, a new venture between the Saudi

national shipping company Bahri and commodities

trader Bunge, has opened offices in Dubai.

The venture, headquartered in Dubai, is owned 60% by

Bahri Dry Bulk and 40% by Bunge aims to ship 5m

tonnes in its first year of operation.

At a celebration for the opening of the Dubai office held

at Burj Al Arab the logo of BahriBunge Dry Bulk was also

unveiled.



The company will charter and operate supramax and/or

panamax bulkers initially from the fleet owned or

managed by Bahri Dry Bulk, and later from third parties.

BahriBunge Dry Bulk aims to increase it volumes to

double-digit millions per year over time.

The two companies believe they will be able to combine

their specific areas of expertise in the joint venture.

“The launch of BahriBunge Dry Bulk joint venture marks

an important milestone for our company. Bahri’s

invaluable insights of the Middle East markets along

with Bunge’s dynamics of the freight industry globally

will help BahriBunge Dry Bulk Ltd. emerge as a reliable

and robust carrier especially for the trade of grains and

other agricultural commodities,” said Abdulrahman M.

Al-Mofadhi, chairman of Bahri.

Nezar Banabeela, chairman of BahriBunge Dry Bulk said,

“Launching BahriBunge Dry Bulk and adding state-of-

the-art vessels to the existing fleet will go a long way in

streamlining the flow of dry bulk in the region and also

contribute tremendously in executing trade in a

seamless and efficient manner.

“Bunge brings notable success in commodity trading and

shipment of dry bulk, and its operational strength will be

crucial in serving the growing demand for dry goods and

reliable freight services in the region.”

Severe weather wreaks havoc in Port of Durban - three vessels grounded – SMN Oct 10th Severe weather has wreaked havoc on the Port of

Durban grounding three vessels with an MSC

containership blocking the harbour entrance.

South Africa's Transnet National Ports Authority (TNPA)

confirmed that all vessel movements had been

suspended in the Port of Durban due to what it

described as “inclement weather”.

“Transnet’s marine services team and tugboats are

assisting with several emergencies. These include the

grounding of three vessels in the Port of Durban. Other

vessels have broken mooring lines and are drifting in the

channel,” the authority said.

Local news reports showed severe flooding in Durban

and video of an MSC containership which was blocking

the harbour entrance. Four tugs were reported to be

trying to the containership clear according to the

TimesLive.

TNPA reported no injuries from the severe weather.

“Whilst we are still in the process of determining

damage to port infrastructure we are relieved that no

injuries have been reported. Several TNPA premises

have been flooded including the Transnet Maritime

School of Excellence in Bayhead Road. Terminal and rail

operations have been suspended to ensure the safety of

people and equipment,” it said.

Operations at the Port of Richards Bay were also

expected to be disrupted.

Expanded Panama Canal sets record cargo tonnage in FY17 – SMN Oct 18th

In its fiscal year 2017, ended 30 September 30 2017, the

Panama Canal Authority (ACP) set record cargo tonnage

of 403.8m Panama Canal tonnes (PC/UMS), the highest

cargo tonnage ever transited in its 103-year history.


News AbstractsDry Bulk Terminals Group – October 2017 – Issue 173“The 22.2% increase from the previous year can be

directly attributed to the added capacity provided by the

expanded Canal,” said the ACP.

A total of 13,548 vessels transited during FY17,

representing a 3.3% increase compared to totals the

year before. Thanks to the larger post-panamax vessels

now able to transit the expanded canal, the growth in

traffic of 22.2% surpassed the already ambitious cargo

projection of 399M PC/UMS the ACP had forecast for

FY2017.

“This year’s success is a testament to the expanded

canal’s success,” said Panama Canal Administrator Jorge

Quijano. “These record figures reflect not only the

industry’s confidence in the expanded Canal, but also

illustrate the Panama Canal’s continued ability to

transform the global economy and revitalise the

maritime industry.”

Less than six months after inauguration of the expanded

canal, the waterway welcomed the YM Unity

containership, its 500th Post-Panamax vessel transit. In

March 2017, Mediterranean Shipping Company's MSC

Anzu became the 1000th post-anamax vessel to transit

the canal and in September 2017, the box ship Cosco

Yantian marked 2,000 Post-Panamax transits, including

the Disney Cruise Line’s Disney Wonder, the first post-

panamax cruise ship to transit. The post-panamax

14,863 teu-CMA CGM Theodore Roosevelt became the

largest ship to transit the canal to date in August 2017

In September 2017, the canal and the Panama Maritime

Authority (AMP) launched Panama’s Maritime Single

Window (VUMPA), to streamline logistics paperwork for

international customers. The Panama Canal also

instituted modifications to the toll structure in response

to a series of discussions with customers and a review of

changing cargo patterns.

The Panama Canal currently serves 29 major liner

services, including 15 Post-Panamax liner services,

primarily on the US East Coast to Asia trade route.

The container segment continued to serve as the leading

market segment of tonnage through the canal,

accounting for 35.3%, 143m tonnes PC/UMS of which

89.1m tonnes transited the expanded canal. Tankers,

which include LPG and LNG carriers, represented 105m

tonnes PC/UMS, with bulk carriers, 79m tonnes PC/UMS

and vehicle carriers, 47m tonnes PC/UMS.

In FY17, the main routes using the Panama Canal were

between Asia and the US East Coast, 34%, the WCSA and

the US East Coast, 13%, the WCSA and Europe, 7%, the

WCCA and the US East Coast, 7% and inter-coastal South

America, 5%.

The countries of China, Chile, Japan, Mexico and

Colombia were some of the top users of the Panama

Canal, while the United States continued to be the main

user of the waterway representing the origin or

destination for 68.3% of the total cargo transiting the

canal.

Coastal challenges and shortsea shipping – SMN Oct 20th

The oversupply of ships, the costs of compliance with

the Ballast Water Management Convention, the

increasing administrative burden, bunker prices and

Brexit add up to challenging times for coastal and

shortsea shipping, said Gilbert de Bock, general manager

of the Dutch shipowning company De Bock Maritime.

Assessing the future outlook for coastal shipping at the

British Port Association’s (BPA) annual conference in

Poole, de Bock said: “There is a declining [cargo] share

of shortsea shipping in intra-EU transport; this was at

40% in the 1990s but is at 33% now. Dry and liquid bulks

are both declining, although ro-ro and lo-lo have shown

growth.”



Most of the smaller shortsea vessels calling into the UK

are Dutch-flagged, he said. “The first challenge is the

oversupply of ships. In general, the EU economy is

growing again but nevertheless as shipowners we don’t

feel it because there are too many ships. A lot of ships

should be scrapped.

“This is being done at some level but generally most

owners just keep sailing and hope for better times.

Some have gone bankrupt but that doesn’t help because

the ships get sold and the overtonnage remains the

same.”

Many owners are holding off investments to comply

with the ballast water regulations – partly because there

is no finance available but also because the lack of

clarity over which technologies are acceptable, he said.

“Luckily, the ships have up to a maximum of five years to

invest in these systems.”

Next, he highlighted the administrative burden and the

“big mess” of the EU’s Maritime Single Window

regulations. “What is the biggest reason seafarers quit

their job before 30? It used to be because they were

away from their families. Now number one is the

administrative burden – they feel they are doing an

office job on a ship.”

De Bock said further consolidation in the sector is

expected. Most operators are hoping that 2020 will be

better, “but for now, we have to survive”.

Meanwhile, due to the almost complete halt in

newbuilding projects, the average age of the fleet is

going up. “It was six years in 2008 in the Netherlands –

now it is up to 10 to 12. Newbuilding is required but

shipowners struggle with finance after nine years of low

freight rates, and there is also the issue of capital

availability.”

IMO refutes criticism of its efforts on emissions reduction – SMN Oct 25th

IMO secretary-general Kitack Lim has been moved to

issue a statement reiterating that the International

Maritime Organization is a transparent and inclusive

body, which has been working for decades to reduce

harmful air emissions from ships.

These efforts continue with this week’s second meeting

of the Intersessional Working Group on Reduction of

GHG Emissions from Ships, the statement points out,

where 57 IMO Member States and 21 non-governmental

organizations (NGOs) in consultative status are taking

part.

The IMO secretary-general’s intervention follows this

week’s release of a report by an organisation called

InfluenceMap, which claims that “the shipping industry

has aggressively lobbied the UN to obstruct climate

change action for shipping,” and that “at the most

recent IMO environmental committee meeting 31% of

nations were represented in part by direct business

interests.”

“Recent media reports have questioned the transparent,

inclusive approach adopted by all stakeholders with an


News AbstractsDry Bulk Terminals Group – October 2017 – Issue 173interest in addressing the threat of climate change

through the IMO,” begins the IMO statement.

Lim goes on to emphasise that “as is the case in other

UN agencies of a technical nature, the make-up of

national delegations to IMO is entirely a matter for the

countries themselves”.

Furthermore, IMO currently has consultative

arrangements with a total of 77 different NGOs

representing a broad spectrum of interests and many

different viewpoints, he adds.

With Member States responsible for selecting these

NGOs, “this inclusiveness is one of IMO’s great

strengths”, concludes Lim.

Dry bulk shipowners want wider vetting of stakeholders – SMN Oct 16th

Dry bulk ship operators are calling for the wider vetting

of the shipping industry with the focus on stakeholders,

including charterers, port terminal operators and port

state control.

Led by Intercargo, dry cargo vessel owners, believe the

assessment of the industry as a whole will lead to

pending regulations being implemented and a more

efficient greener industry and a concerted effort will be

made to involve the weight of IMO in the drive to better

assess the industry.

“We support regulations when they are practical but

there is a lack of other stakeholders facilitating their

smooth implementation,” said John Platsidakis,

chairman of Intercargo, following meetings of the

association’s executive and technical committees in

Athens this week.

With numerous stories from Intercargo members

relating to corruption within Port State Control in certain

ports, the association condemns the "lack of any self-

assessment structures" and pledges to continue efforts

to persuade regional MoUs "to establish auditing

schemes and transparency mechanisms".

The objective is to target corruption and misbehaviour, a

problem, Platsidakis says "has regrettably not been

sufficiently addressed".

Intercrago secretary general Kostas G. Gkonis said the

association wrote to regional MoU secretariats more

than a year ago in an effort to persuade them to

establish internal affairs desks so abuses could be safely

reported and properly investigated. But, said Platsidakis

there has been no response.

“I don't see why not. We need a mechanism to register

problems without fear of retaliation,” he said.

He also said a long-term goal of Intercargo was to

encourage the formation of a dry cargo charterers'

assessment scheme that would be “in their own

interest” as it would enable quality charterers to

promote their performance in such aspects as payment,

safety, quality control and crew welfare.

Dimitris Fafalios, chairman of the technical committee

pointed out that unlike the oil tanker industry which is

heavily vetted, bulk carrier owners could be prey to

hundreds of smaller charterers in addition to the major

players. “It is different to the oil industry, which is highly

regulated,” said Fafalios.

Association vice chairman, Jay K Pillai noted bulkers

were often obliged to occupy berths unsuited to the size

of vessel and were sent to terminals that had not been

dredged, resulting in ships having to settle in mud until

the next tide.

Intercargo has approached terminal operators but here

there has been little response, even regarding reception

facilities and especially in providing proper treatment for

residues and hold washings that are classed as harmful

to the marine environment.

The association says port state governments need to

provide incentives in order for ports and terminals to


News AbstractsDry Bulk Terminals Group – October 2017 – Issue 173increase investment in the provision of adequate

facilities.

Intercargo has proposed a “model port reception

facilities” concept with the purpose of assisting Imo and

its members to have consistent and complete idea about

port reception facilities. To help identify the way

forward Intercargo intends to ask IMO to push terminals

to implement existing rules.

Pacific Basin saw demand growth at tail end of Q3 – SMN Oct 12th

Pacific Basin Shipping (PacBasin) is seeing better times as

the year goes by. Despite a seasonal mid-year decline,

which affected index rates in the third quarter, stronger

demand growth across most cargo categories drove a

marked increase in rates over the last few weeks of the

quarter, the Hong Kong-based minor bulks specialist said

in a press release on its third quarter update.

PacBasin warned however that financial results-wise the

year was essentially fully factored in. "Due to the lag

between securing cargoes and performing voyages, and

with most of our fourth quarter revenue days already

covered, these stronger rates will have a marginal effect

on our 2017 results," the company said.

In its key handysize and supramax segments PacBasin

generate average daily TCE earnings of $8,130 and

$9,350 per day net in the third quarter, a rise of 15% and

27% respectively from the previous corresponding

period, the group said.

Meanwhile, leveraging on its time proven model, the

company continued to outperform its benchmarks, with

year-to-date average handysize and supramax daily

net TCE earnings increasing 25% and 41% year-on-

year to $8,010 and $9,060, outperforming the BHSI and

BSI spot market indices by 19% and 8% respectively

Drilling down to the individual trades, PacBasin said the

traditionally slower summer period benefitted from

strong American grains exports, including record

high third-quarter volumes from Brazil.

Meanwhile in the Pacific, while earnings were lower

than Atlantic freight earnings, they improved to

third-quarter levels last seen in 2011. "This Pacific

buoyancy was supported by solid growth in the

Bauxite trade and Chinese imports of especially

minor bulks which in January to August increased 18%

year on year to their highest level since 2013," PacBasin

noted.

On the supply side the outlook improved as well, as

fewer newbuilding deliveries resulted in a lower

concentration of new tonnage supply in the Pacific.

"The market improvement in the year to date is

encouraging and we continue to believe that we are

past the worst in the dry bulk cycle. If demand growth

can be maintained, we expect the gradual market

recovery to continue albeit with some volatility along

the way," PacBasin concluded.

Tsunami of regulations dominates Intercargo discussions – SMN Oct 12th

Under the weight of coping with a tsunami of

regulations, more dry cargo ship owners are turning to

Intercargo in record numbers for support.

Ships registered with the association representing the

interest of dry cargo vessel owners rose by half in the

January - September, 2017 period to 1,510 units of

138m dwt with over 60 more vessels currently being

vetted prior to joining. Full members jumped from 77 to

102 in the period.

“Influx of regulations, especially ballast water system

and port reception facilities for cargoes hazardous to

marine environment… is contributing to the number of

new members,” said Jay K Pillai, vice chairman of


News AbstractsDry Bulk Terminals Group – October 2017 – Issue 173Intercargo and fleet director of Hong Kong’s Pacific Basin

Shipping, speaking in Athens.

Association chairman, John Platsidakis said: “Intercargo-

entered ships continue to outperform industry averages

in respect of detentions and deficiencies per

inspection.” He noted ships entered were trading

worldwide in the larger bulk sector leading the

association to express new concern about the practical

problems faced when retrofitting existing dry bulk ships

with ballast water management systems, and operating

them.

While Intercargo welcomes the purpose and the focus of

the convention it says implementation challenges are

great. This is especially so regarding retrofitting BWM

systems, the adequate worldwide support for the

systems, the availability of proven / actually performing

under all conditions systems, and spares backup.

Speaking in Athens, after the association's biannual

meeting of its executive and technical committee

meetings, Platsidakis said BWM was one of the issues

addressed "during hot discussions on issues related to

the dry bulk sector".

Intercargo maintains achieving the effective

implementation of the BWM convention will require

working closely with the manufacturers, "who should

consider establishing an association of their own for this

purpose". He said: "Not enough attention has been

given to the implementation problem" and the

association wants to present these to IMO "so that a

practical solution can be found".

Likewise, implementation of the 0.5% sulphur cap from

2020 for ships’ bunkers, is a concern and Intercargo is

promoting the consideration of transitional issues such

as "the availability of 0.5% fuel, the impact on

machinery systems, verification mechanisms and any

regulatory amendments or guidelines required". "We

are here to buy what is available in the market, we don't

have an option as the charterer is dictating the use of

the asset, but makers have to produce products that

tackle the problem," said Platsidakis.

"We can't be marginal operators. We want quality. But

who is really responsible for emissions, the shipper or

the consumer and this leads to who is paying the bill,"

said Platsidakis.

The non-availability of sufficient search and rescue (SAR)

capabilities in the vicinity of busy shipping lanes and the

lack of urgency in producing casualty investigation

reports following an incident is another concern. In the

aftermath of the tragic loss of the VLOC Stellar Daisy in

the South Atlantic at the end of March, the industry

needs to revisit the SAR issue.

Dry Bulk FFA Market: Baltic Dry Index at highest levels in three years – SMN Oct 30th

The Baltic Dry Index (BDI) achieved a three-year high at

1,588 last Tuesday, thanks to the rally seen among the

industrial commodities. In particularly, the prices of base

metals have rallied, while iron ore prices are showing a

mixed movement but still hovered above the $60 per mt

level.

The price hikes may be spurred China’s pledge in the

19th National Congress to wipe out poverty by 2020.

Thus, this meant that the country will need to achieve at

least 6.5% yearly growth toward 2020 to make this goal

feasible.



Besides, the BDI is in the seasonal high shipping cycle

where vessels were fixed before the year-end, as such

commodities like iron ore shipments are scheduled

much earlier before winter. Thus, capesize rates began

the week strong, only to falter later on mixed iron ore

outlook. Furthermore, the ongoing the coal conference

held in Barcelona, had also taken a significant numbers

of traders off the market.

At first, the absence of the traders attending the

Coaltrans did not seem to stop the stop the buying

enthusiasm from those remaining. As the early physical

news produced talk of 8.50 and 8.65 fixing which was

shortly followed up by rumors of Spartacus fixing for

short Pac round at $25,750- $26,000 on Monday.

However, things soon took a turn for worse as the week

dragged on.

“After a strong day yesterday which saw the index touch

a near three year high, capesizes had a change of

fortunes on Wednesday.” said a FIS FFA broker.

As a result, he noted that the index retraced a touch and

prompt paper came under some pressure as the

afternoon progressed. Then, C5 was reported to have

fixed 8.20 & 8.15 early on while Atlantic news was

distinctly lacking with capesize 5 Time Charter Average

recorded at $22,228, down $287 at day-on-day basis.

Likewise, Panamax rates also hit a downtrend after a

lethargic opening at the start of the week. The Panamax

time charter average posted $12,816 on Wednesday,

down $275 day-on-day and a loss of $401 as compared

to Monday’s rate at $13,217.

“Nov and Dec fall sharply averaging $400 plunging lows

at $12,500 and $11,800 respectively while further out

cal18 slipped off to post $9,700 several times,” said a FIS

panamax shipbroker.

“The tone remains cautious with bids continuing to thin

out towards the close,” he concluded later.

Supramax rates were then caught up in a yo-yo session,

as the market continued to sit in the range that was

witnessed at the close of last week. As such, the

supramax time charter average posted at $11,872 on

Wednesday, down $19 day-on-day but unchanged on

the similar level seen on Monday.

“Supramax paper softened once again as we really

lacked bid support with rates slipping throughout

Wednesday,” noted an Asia-based FIS shipbroker.

According to him, the index stepped back into negative

territory by mid-week as 10TC was -$23 and 6TC -$19,

while Q234 package was sold $9,600 and the Cal 18

$9,650. In the meantime, some small gains were seen in

handysize as the Handy size Time Charter Average hiked

to $10,104 on Wednesday as compared to $10,012

recorded on Monday.

With downtrend seen across the dry bulk rates, one

wonders if the BDI can continue to push for further

height again. However, the freight rates are still in the

strong position currently with the support of the

commodities prices rally. Perhaps, the market may see

another upswing with the return of the traders from the

Coaltrans conference.

More SALT please - dry bulk shipping becomes all the rage – SMN Oct 30th

Dry bulk shipping is all the rage. Consider that Scorpio

Bulkers (SALT), a bellwether of the sector, has seen its

share price strengthen with the seemingly improved dry

bulk market.

Most importantly, the company will begin paying a

quarterly dividend to shareholders, albeit a tiny one at

$0.02 per share. On its recent conference call, Scorpio

Bulkers chairman Emanuele Lauro explained: “We

believe that current market rates are sustainable and

will continue to improve through 2018. As a result, we

are excited to initiate a quarterly dividend, which is a


News AbstractsDry Bulk Terminals Group – October 2017 – Issue 173reflection of our confidence in our company’s financial

strength and cash flow generation and the markets in

which we operate.”

SALT, after it completes the acquisition of six ultramax

vessels from Golden Ocean, will own 52 vessels (roughly

3.6m dwt aggregate)- made up of 18 kamsarmax vessels

and 34 ultramax vessels. One ultramax is also chartered

in.

The quarter’s result showed a small loss- but the gap

continues to narrow. Importantly, “cash flow from

operations” registered a positive number, meaning that

drybulk’s rising tide has lifted inflows to levels above

daily breakevens, which consider operating expenses

and a financing cost component.

For the first nine months of 2017, daily hires on

kamsarmaxes and ultramaxes were $9,218 per day and

$8,519/day respectively, compared to $5,024 per day

and $5,434 per day in the same period in 2016. On the

earnings call, Scorpio cfo, Hugh Baker, explained that :

“If rates increase by $1000 per day, then our annual

cash flows improve - for 52 ships times 365 days per

year, times $1,000 a day, gives us an additional $18.98

million per year.”

For perspective, the company said dividend payouts, at

$0.02 per share, consume approximately $1.5m per

quarter, or about $6m over a year’s time. In a discussion

of the dividend, SALT’s president, Robert Bugbee, made

clear that dividend payments will not be formulaic,

saying, rather: “We've signalled that we think we can

afford a dividend, we think that the market is going up

and the…exact type of dividend will depend a little bit on

the next three, four, five months the next quarter or

two”. Bugbee also suggested that the company would

welcome opinions from analysts and shareholders about

the dividend.

On assets and charter markets, Bugbee indicated that

SALT is seeing more activity across the wide range of

commodities carried in kamsarmaxes and ultramaxes;

he suggested that the company is not inclined to delve

into the capesize segment, which has clearly been

leading the market. On chartering policy he noted that

“we don’t need to fix out tonnage defensively” and

suggested that SALT has “no real desire to fix ships out

for longer terms”.

He offered a view that “vessel values have lagged

charter rates” which provides an opportunity right now.

“More buyers will emerge in the coming months,” he

opined, causing prices of vessels to move upward.

In spite of all the optimism among shipping people,

equity investors are still skittish. In an effort to “test the

waters”, SALT announced that it would be raising fresh

equity through the sale of 10m shares, only to withdraw

its offering 12 hours later “due to the unsatisfactory

price offered to the company.”

In the absence of a distress situation, share issuers will

aim for a price point above the net asset value (NAV) per

share. For SALT this curious share sale was always

unlikely. It might have worked if the shares had popped

up following the investor call since analysts estimate

SALT’s NAV to be somewhere around $10 per share. At

its recent pricing around $8.50 per share, which is below

NAV, the lines were not meant to cross . Still in place,

however, is an authorization to buy back up to $50m of

shares, which SALT might exercise were share prices to

dip precipitously.

*********Clarkson commentaries – DBTO (Volume 23, No 10 – October 2017)

Dry Bulk Supply & Demand Highlights


News AbstractsDry Bulk Terminals Group – October 2017 – Issue 173Earnings in the bulkcarrier market improved further in

September 2017, with average bulker earnings

increasing by 17% m-o-m to $12,868/day, the highest

monthly average since late 2013. Capesize earnings

averaged $21,361/day in September, representing the

first monthly average over $20,000/day since late 2014.

Earnings in the smaller bulkcarrier sectors have also

increased to the highest level for several years.

The improvement in the market this year from

historically depressed levels in early 2016 has largely

reflected more positive demand trends, with growth in

seaborne dry bulk trade projected to accelerate to 4.2%

in full year 2017, compared to an average of c.0.5% p.a.

in 2015-16. This has reflected robust growth in Chinese

iron ore imports this year, as well as a return to growth

in global seaborne coal and minor bulk trade. Initial

projections for 2018 suggest that growth in seaborne

dry bulk trade could slow slightly, but remain fairly firm

at around 3% (and 4% in terms of tonne-miles),

supported by increased Chinese demand for high-quality

iron ore and faster growth in minor bulk trade.

However, growth in coal and grain trade is projected to

slow somewhat.

On the supply side, growth in bulker fleet capacity is

expected to remain relatively moderate in full year 2017

at 3.5%, although growth has picked up compared to

last year as a result of a slower pace of recycling.

However, limited contracting in recent years has led to a

significant decline in the orderbook, to the equivalent to

just 7.9% of fleet capacity at the start of October. In

2018, fleet

growth is expected to be limited to around 1%, with

deliveries projected to slow by 45% to 23m dwt, and

recycling projected to ease further to 13m dwt.

Overall, expectations for very limited supply side growth

in the coming years suggest that the bulkcarrier market

balance could continue to gradually improve, even if

trade growth moderates slightly. While some of the

current market strength reflects seasonal trends, and

while risks to the outlook clearly remain, sentiment in

the bulkcarrier sector has become much more positive.

Seaborne Iron Ore Trade - CommentaryGlobal seaborne iron ore trade is currently projected to

grow by 5% to around 1,483mt in full year 2017,

supported largely by firm Chinese demand. Meanwhile,

iron ore imports into other Asian countries and Europe

are expected to remain relatively steady overall in 2017,

following a decline last year, reflecting an improvement

in global steel market conditions. Looking further

forward, increased Chinese demand for higher quality

imported ore is expected to drive a further 4% increase

in the country’s seaborne iron ore imports to 1,114mt in

full year 2018. Meanwhile, expansion in mine output is

expected to drive growth in exports from Brazil and

Australia in 2018, with current projections indicating a

5% increase in Brazilian iron ore shipments and a 2%

increase in Australian iron ore exports in 2018. Indian

iron ore exports are not currently projected to grow as

rapidly in 2018 as in 2017, although a further increase in

volumes is expected. Overall, global seaborne iron ore

trade is currently projected to grow by 3% to around

1,528mt in 2018.

Iron Ore NewsBrazilian iron ore exports contracted 10% y-o-y to 32mt

in September. This brought the year to date total to

281mt, up by only 1% y-o-y. However, continued ramp-

up of output at Vale’s S11D mine is expected to provide

further support to exports towards the end of the year,

with current projections suggesting that Brazil’s total

seaborne iron ore exports will increase by 4% to around

387mt in full year 2017. A continued increase in

production by Vale is expected to provide further

support to Brazilian exports next year, with shipments

projected to increase 5% to around 407mt in full year

2018.

Meanwhile, Australian iron ore exports were steady y-o-

y at 71mt in August, with shipments in the first eight

months of the year up 2.4% y-o-y at 539mt. Additional

volumes from the Roy Hill mine are expected to drive a

3% rise in Australian iron ore exports to around 833mt in

full year 2017. Looking further forward, the pace of

Australian iron ore export growth is expected to ease in


News AbstractsDry Bulk Terminals Group – October 2017 – Issue 1732018, reflecting Roy Hill reaching capacity in 2H 2017

and expectations of limited production increases by

other miners. The country’s iron ore exports are

currently projected to grow by 2% to around 849mt in

full year 2018.

Chinese iron ore imports rose 11% y-o-y to a record

103mt in September, with iron ore imports to

the country rising 7% y-o-y to 817mt in the year to

September 2017. Chinese seaborne iron ore imports are

currently projected to increase 7% to 1,075mt in full

year 2017. Looking further forward, the ongoing shift

from low-grade domestically produced iron ore to

higher quality imported ore alongside government

measures to reduce pollution and cut inefficient steel

capacity is expected to continue into 2018. Despite

current expectations of relatively steady steel demand in

the country next year, Chinese seaborne iron ore

imports are still projected to increase by a further 4% to

around 1,114mt in full year 2018.

Seaborne Coking Coal Trade - CommentaryGlobal seaborne coking coal trade is projected to grow

by 3% in 2017 to total 258mt, which would

represent the highest volume since 2014. Growth is

expected to be supported by a projected 16% increase in

Chinese seaborne coking coal imports to around 42mt,

after imports dropped in 2014-15, and remained steady

y-o-y in 2016. European coking coal imports are also

expected to grow in 2017 after 5 consecutive years of

decline, with current projections indicating a 4%

increase in European seaborne coking coal imports to

around 46mt in full year 2017. Looking ahead, the pace

of growth in global seaborne coking coal trade is

expected to remain relatively firm in 2018, with imports

into Europe and developing Asian countries including

India and Pakistan projected to expand further. On the

supply side, Australian exports are projected to recover

in 2018, with current projections indicating growth of

5% to around 160mt after a decline in export volumes in

2017 as a result of Cyclone Debbie. Overall, global

seaborne coking coal trade is currently projected to

increase 4% to around 267mt in 2018.

Coking Coal NewsChinese coking coal imports have increased firmly so far

in 2017, with seaborne imports rising 18% y-o-y to total

33mt in the first nine months of the year. Import

demand has been supported by increased steel

production in the year to date, as well as continued

tightness in the domestic coal market, partly reflecting

the impact of environmental inspections at some mines

in recent months. In 2018, Chinese seaborne coking coal

imports are currently projected to remain relatively

steady, with volumes expected to be supported to some

extent by continued imports of high-quality coal amidst

efforts to limit air pollution. However, Chinese coking

coal imports have been volatile over recent years, and

there remains uncertainty over the outlook given the

sensitivity of seaborne imports to government policies

and trends in domestic coal production.

Combined coking coal imports into India and Pakistan

are currently projected to increase 10% to around 56mt

in 2018, accounting for more than half of the total

expected growth in global seaborne coking coal trade

next year. Steel demand and production in both

countries is expected to continue to grow firmly,

supported by firm economic growth and continued

investment in infrastructure and manufacturing.

Japanese coking coal imports are projected to decline

marginally in 2017, reflecting the slight decrease in steel

production in the country so far in 2017. Imports are

projected to increase slowly by around 1% in 2018, in

line with expected trends in Japanese steel use.

Reported Australian coking coal exports fell 10% y-o-y in

the first eight months of 2017, reflecting the

severe disruption caused by Cyclone Debbie in Q2 2017.

However, exports have since bounced back, and are

projected to recover to 160mt in 2018.

Seaborne Thermal Coal Trade - CommentaryGlobal seaborne steam coal trade has grown firmly in

the year to date, with volumes now projected to

increase by 6% in full year 2017 to reach a three-year

high of 941mt. European imports are expected to


News AbstractsDry Bulk Terminals Group – October 2017 – Issue 173increase in 2017 for the first time in three years, partly

reflecting firmer imports into France as a result of

disruptions to nuclear power generation, as well as

steadier imports into the UK after imports into the

country declined by around 90% between 2013 and

2016. Steam coal imports into Asia are also projected to

increase firmly this year, especially into South Korea,

where increased coal-fired power generation capacity

has supported robust growth in steam coal imports in

the year to date. In 2018, the pace of growth in global

seaborne steam coal trade is currently projected to

moderate to 1%, reflecting a continued move towards

cleaner energy sources in some regions (such as

Europe), and a further decline in Indian imports as

domestic coal production continues to increase.

However, there remains uncertainty over the outlook

for Chinese and Indian coal imports in particular.

Steam Coal NewsIndian steam coal imports fell by 20% y-o-y in June, and

by 9% y-o-y in 1H 2017, reflecting increased domestic

coal production. Imports are projected to fall to 134mt

in full year 2017, down by over 20% compared to

imports in 2014, and while domestic coal production

may not meet the ambitious targets set by India’s

government, further expansion in production is

expected to continue to undermine Indian steam coal

imports into 2018, although there remains potential for

a significant acceleration in growth in coal consumption

to provide some support to imports in the short-term.

Chinese seaborne steam coal imports increased firmly in

the first nine months of 2017, rising 14% y-o-y to

130mt. Growth in seaborne imports is expected to slow

slightly in the rest of the year, partly reflecting the high

base in late 2016, but there remains uncertainty over

the outlook going forwards. Environmental inspections

at mines in some regions have reportedly contributed to

continued tightness in the domestic coal market in

recent months, supporting import demand despite the

recent introduction of a ban on coal imports into some

ports. Chinese seaborne steam coal imports are

currently projected to remain relatively steady in 2018,

although are expected to remain highly sensitive to

trends in the domestic coal market and government

policies.

Steam coal imports into a number of smaller developing

Asian countries have grown firmly in the year

to date, supported by an increase in coal-fired power

generation capacity. Combined imports into Vietnam,

the Philippines, Malaysia, Pakistan and Bangladesh are

projected to grow 12% in 2018 to 88mt, as further

coalfired power plants start up.

European steam coal imports are currently projected to

decline marginally in 2018 to 127mt, following a slight

increase in 2017. French imports are projected to ease

as nuclear power generation improves, whilst other

countries in the region are expected to continue to

gradually move towards cleaner power sources to meet

climate commitments.

Grain Imports - Grain Trade NewsGlobal wheat and coarse grain trade is currently

projected to grow by 2% to around 358mt in the

2017/18 crop year. Japan is expected to remain the

world’s largest grain importer in the 2017/18 crop year,

with current projections indicating that the country’s

grain imports will remain steady at around 23mt.

Meanwhile, China is expected to see a further decline of

25% in wheat and coarse grain imports to around

14.8mt in the 2017/18 crop year, after an estimated 14%

decline in 2016/17. The country was previously the

world’s largest grain importer in the 2014/15 and

2015/16 crop years. Overall, Asian imports are

projected to decline 2% to 118mt in the 2017/18 crop

year. Meanwhile, Middle Eastern grain imports are

expected to grow 9% to 60mt in 2017/18, reflecting firm

growth in Saudi Arabian imports following the end of its

domestic wheat production programme, as well as

expectations of firm Iranian imports.

Grain Imports - Grain Trade NewsMexico’s grain imports are expected to grow 7% to

around 21mt in the 2017/18 crop year, supporting a

projected 7% increase in imports to the North/Central


News AbstractsDry Bulk Terminals Group – October 2017 – Issue 173America region to around 40mt in 2017/18. Meanwhile,

African grain imports are expected to remain relatively

steady at around 76mt in 2017/18. Decreases in South

African and Zimbabwean grain imports as a result of

high stockpiles following the recent strong harvest, are

expected to be offset by growth in imports to Egypt,

Morocco and Algeria. The region is expected to remain

the world’s second largest wheat and coarse grain

importing region, behind Asia. Meanwhile, South

American wheat and coarse grain imports are expected

to ease by around 4% to 30mt in 2017/18, reflecting the

return of Brazilian imports to more typical levels

following the unusually firm level of imports seen in the

2016/17 crop year.

Grain Exports - Grain Export NewsTotal US wheat and coarse grain exports are projected

to contract 19% to around 79mt in the 2017/18 crop

year, following strong export growth in 2016/17.

Meanwhile, Brazilian coarse grain exports are projected

to more than double in 2017/18 to around 33mt,

reflecting expectations of a large surplus of production,

and following particularly weak export volumes in

2016/17. Argentinian total wheat and coarse grain

exports are currently projected to grow by 12% to a

record 43mt in the 2017/18 crop year, reflecting the

increased competitiveness of Argentinian grain on the

export market as a result of the weak Argentine Peso,

and firm growth in sowing levels of maize. Russian

exports are also currently projected to reach record

levels in 2017/18, reflecting good weather conditions

and firm production of wheat in the country in recent

months.

Minor Bulk Trades - CommentaryGlobal seaborne minor bulk trade is currently projected

to grow 2% to around 1,909mt in full year 2017. This

increase is expected to be driven by growth in a broad

range of commodity trades including bauxite, scrap

metal, fertilisers and agribulks, despite an expected

decline in trade in steel products and anthracite.

Anthracite trade is projected to fall to a 10- year low this

year, reflecting restrictions on North Korean exports.

Looking ahead, global seaborne minor bulk trade is

currently projected to expand 3% to around 1,969mt in

2018, the fastest pace of growth since 2013. Growth is

expected to be supported by a 10% increase in bauxite

trade in 2018 as Guinean exports continue to grow

strongly, as well as firm growth in trade in sugar,

fertilisers, and a range of other minor bulk commodities.

Steel products trade is also projected to return to

growth in 2018, after two consecutive years of decline.

Bulkcarrier Fleet

Commentary– Capesize Fleet TrendsAt the start of October 2017, the Capesize fleet stood at

1,691 vessels of a total 323.5m dwt, a 3% increase in

dwt terms compared to the start of the year. In

September, 12 Capesize vessels were ordered, totalling

3.6m dwt, the most ordered in a single month since April

2016. Ten of these vessels were 325,000 dwt VLOCs

ordered by Polaris Shipping against contracts of

affreightment from Vale. In the first nine months of the

year, a total of 38 Capesize vessels of a combined 9.1m

dwt were ordered. Meanwhile, 2017 has so far been a

slightly quieter year for Capesize demolition than 2015

and 2016, with 26 vessels reported sold for scrap in the

year to date, totalling 5m dwt.

Fleet Watch – To 1st September 2017Capesize vessels:

66 delivered 26 scrapped 38 ordered

Commentary – Panamax Fleet TrendsAt the start of October 2017, the Panamax fleet

consisted of 2,504 vessels of a combined 201.2m dwt, an

increase of 3% in dwt terms from the start of the year. In

the year to date, the Panamax orderbook appears to

have stabilised after its sharp decline in 2015-16, driven

by an increase in Kamsarmax contracting from the

historically low levels seen in 2016. The Panamax


News AbstractsDry Bulk Terminals Group – October 2017 – Issue 173orderbook stood at 15.5m dwt at the start of 2017,

having fallen by 45% in the previous year, but

now appears to have stabilised at around 13m dwt for

the last four months. Total ordering in the Panamax

sector totalled 6.2m dwt in the first nine months of

2017, versus just 0.2m dwt in full year 2016.

Fleet Watch – To 1st September 2017Panamax vessels:


Commentary – Handysize/Handymax Fleet TrendsAs of the start of October 2017, the Handymax fleet

consisted of 3,536 vessels of a combined 194.9m dwt, a

3% increase in dwt terms since the start of the year. In

the Handymax sector, 18 vessels totalling 1.1m dwt have

been contracted in the year to date, already more than

the 11 vessels of 0.6m dwt contracted in full year 2016,

but on course to be well below the average of 282

vessels per year ordered in the sector in 2010-15. The

Handymax orderbook has fallen by almost 50% in dwt

terms since the start of the year, with the orderbook

now representing just 5% of the Handymax fleet. In the

Handysize sector, 19 vessels of a combined 0.6m dwt

have been ordered in the year to date, an extremely

subdued level historically.

Fleet Watch – To 1st September 2017Handymaxes:


Handysizes:


*********

Commodity Countdown

The Bulkcarrier Orderbook: Tracking The Gradient

Following limited contracting in the bulkcarrier sector in

the last three years, the bulkcarrier orderbook has

declined significantly. By the start of October 2017, the

orderbook totalled 623 vessels of 64m dwt, equivalent

to 7.9% of fleet capacity, close to the lowest ratio on

record. With newbuilding interest starting to pick up,

could the bulker orderbook now have bottomed out?

Dramatic DipThree years ago, the bulker orderbook totalled 2,208

ships of 182m dwt, equivalent to 24% of fleet capacity.

While this was 45% lower than the peak orderbook of

332m dwt in late 2008, it nevertheless was sufficient to

drive continued firm deliveries in 2015-16. Amidst

difficult market conditions (with weighted average

bulker

earnings falling below $4,000/day in early 2016), and

limited access to finance for many owners, contracting

in recent years has been very subdued. Bulkcarrier

ordering fell from 64m dwt in 2014, to 24m dwt in 2015,

and just 14m dwt (across 55 ships, including 30

Valemaxes) in 2016. As a result of the historically low

levels of contracting, the orderbook shrank by 51%

between end 2014 and end 2016 in dwt terms, to total

941 vessels of 85m dwt. This equated to 11% of fleet

capacity, the lowest level in almost 15 years.

Change Of TerrainHowever, in 2017 so far, ordering has started to pick up,

with 17.1m dwt contracted. This volume is already 22%

higher than the full year 2016 level, largely reflecting

increased Kamsarmax ordering, even if overall

newbuilding interest has remained at subdued levels.

Nevertheless, the continued firm pace of deliveries (with

bulkcarrier deliveries projected to remain over 40m dwt

in full year 2017) has meant that the orderbook has

shrunk by a further 25% in the year to date. By the end

of September, the orderbook totalled 64m dwt,

equivalent to 7.9% of


News AbstractsDry Bulk Terminals Group – October 2017 – Issue 173fleet capacity, close to the historical low of 7.2%

recorded in April 2002 (although the volume of capacity

currently on order is around three times larger).

The Path Ahead?Looking ahead, is there scope for the orderbook as a

percentage of the fleet to decline further? Assuming

that deliveries and recycling reach current projections of

43m dwt and 15m dwt respectively in full year 2017,

continued ordering in Q4 2017 at the run-rate seen in

the last six months would lead to the orderbook to fleet

ratio declining marginally to 7.7% by the end of 2017.

However, based on current delivery and demolition

projections, ordering in Q4 2017 and full year 2018 at

the runrate seen in the last six months could see the

orderbook to fleet ratio increase to 9.5% by the end of

2018 (or 12.8% if ordering continued at the pace seen in

September). Indeed, ordering would have to slow to

below the year to date run-rate to prevent an increase

in the orderbook to fleet ratio by the end of 2018. So,

despite increased ordering so far in 2017, the bulkcarrier

orderbook has continued to shrink. While a further

decline in the orderbook to fleet ratio is possible in the

rest of 2017, there is clear potential for the higher

contracting levels seen recently to lead to an increase in

the ratio

next year for the first time since 2013, suggesting that

the most likely scenario is that the current orderbook

cycle is now in the process of bottoming out.

And Finally.......

There is no and finally this month as I still have 101 things to do before I travel to Uruguay. Also, contributions from Members is low this month and I do not have an amusing picture for you.

Therefore, that is it for October.

Pictures to [email protected] please!

Nic



Further Information:

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