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News AbstractsDry Bulk Terminals Group – January 2017 – Issue 164

For your personal interest and information. These News Abstracts are compiled by the DBTG Secretariat from direct sources. Publications including Fairplay (FP),and various international agencies, as well as the research division of Clarkson and Fearnleys. They cover a wide range of issues of direct and indirect relevance to dry bulk terminal operators as well as the aims and activities of the DBTG.

Welcome to the selection of news extracts for January 2017. The first month of the New Year has flown by and that means there are only 11 left to go before Christmas hits us all again!

I hope by now you are all aware of the dates for the Spring meeting. It will be held in Gijon 28th to 30th March with an option to take part in extra terminal tours on the 27th in Santander. I sent details and a website link to the programme and registration form to you all on the 20th January.

We have already received some registrations and look forward to receiving yours in due course. However, I would urge all of you to book the Gijon hotel as soon as you can as they will only hold the rooms for us until the end of next week. To avoid disappointment your rooms should be booked soonest.

This month I am planning a visit to Holland. I am in the process of contacting Dutch Members and hope to see as many of them and their terminals as I can. It is a long time since I was in Holland and I’m very much looking forward to returning.

As I have previously mentioned, interest in the Ballast Water Management Convention continues to gather pace. This area is on the programme at the

Spring meeting and I continue to seek interesting speakers who can offer a diverse selection of views on the subject.

Finally, as always, if there is anything contained in this Newsletter that you would like to discuss further, please don’t hesitate to contact me.

Nic Ingle - Executive [email protected]

DIARY DATES North American dredging Summit - 8th/9th

February, Houston Philippine Ports and Shipping – 23rd/24th

February, Manila European Shipping week – 27th February,

Brussels

IN THIS ISSUE

Shipping Matters Economy/Finance/Trade Commodities Terminals/Ports Ballast Water Management Freight Market

SHIPPING MATTERS

Euroseas sends elderly bulk carrier for scrap – SMN Jan 2nd

Athens-based Euroseas has sold a 72,119-dwt dry bulk

carrier for scrap, and took delivery of a secondhand

1,645-teu feeder boxship.

The 1997-built bulker Eleni P is the oldest dry bulk vessel

in the company’s fleet and is expected to be delivered to

the scrapyard in the beginning of January 2017.

The purchase of the 1998-built feeder container vessel

RT Dagr was made via funds raised from the issuing of

900,000 shares of the company’s common stock.

1www.drybulkterminals.org

mailto:[email protected]

News AbstractsDry Bulk Terminals Group – January 2017 – Issue 164Aristides Pittas, chairman and ceo of Euroseas,

commented: “This transaction is an overall positive

development for Euroseas and showcases our ability to

take advantage of market opportunities to renew our

fleet.

“For a nominal incremental investment, the Eleni P will

be replaced by a larger and younger vessel, the Capetan

Tassos, a 75,100-dwt 2000-built dry bulk vessel, whose

acquisition we announced on 23 November 2016. We

will continue positioning our fleet for a potential market

recovery and exploiting investment opportunities in the

present market environment.”

After the sale of Eleni P, the delivery of RT Dagr, and the

previously announced acquisitions of Alexandros P and

Capetan Tassos, to be delivered to Euroseas in January

2017, the company's fleet will consist of 14 vessels,

including one kamsarmax, three panamax, one ultramax

and one handymax bulker, and eight feeder

containerships.

Global bunker prices doubled in 2016 – SMN Jan 3rd

Global bunker fuel prices have approximately doubled

over the course of 2016, rising from below $200 per

metric tonne (pmt) to well over $300 pmt.

Marine fuel prices across the globe’s four major

bunkering ports – Singapore, Rotterdam, Fujairah and

Houston – climbed steadily and doubled over the past

12 months, according to data from Ship & Bunker.

Singapore, the world’s largest bunkering port by sales

volume, saw key grade 380 cst bunker prices rose to

$346 pmt on 30 December 2016, representing an

increase of 85.6% from $186.50 pmt recorded on 4

January 2016, Ship & Bunker data showed. The last time

that Singapore 380 cst price dipped below $200 pmt was

on 31 December 2008 when it was indicated at $198

pmt, according to data obtained by Seatrade Maritime

News.

During the same 12-month period, Rotterdam 380 cst

bunker fuel prices more than doubled to $310.50 pmt

from $142 pmt. Houston 380 cst prices also surged by

112.9% to $313.50 pmt at the close of the year from

$147.50 pmt at the beginning.

Fujairah port in the Middle East posted a 99.4% jump in

380 cst prices to $337.50 pmt from $169.50 pmt over

the same period.

Sales volume for 380 cst bunker fuel across the four

main bunkering ports account for around 25% of global

volumes.

Crude oil prices, meanwhile, made more humble gains

compared to bunker fuel, but nonetheless considerable

spike, as they rose 56% over 2016, having ended at

$56.82 per barrel on 30 December 2016 compared to

$36.42 per barrel on 5 January 2016.

The oil supply landscape has pointed to firmer prices

after oil cartel Opec agreed to cut production output by

1.2m barrels per day starting 2017 in order to lift oil

prices, while non-Opec producers also agreed to reduce

output by 558,000 barrels per day to help deflate the

supply glut.

Dry bulk market: Let the good times roll – SMN Jan 6th


News AbstractsDry Bulk Terminals Group – January 2017 – Issue 164The new year has begun in great optimism and rolling on

the positive mood of the previous year. The larger vessel

classes are expected to lead the charge as the freight

market heads towards recovery- with players hoping this

is a new beginning rather than another false dawn.

Recent polls taken by the Singapore Exchange (SGX)

suggest that over half of the participants questioned

believe that 2017 will be a year of “moderate”

improvement for the dry bulk freight supply/demand

fundamentals. However, around 28% of the participants

polled believed that the freight market will remain

relatively unchanged in 2017 compared to 2016, thus

demonstrating the market’s mixed outlook.

Industry participants are most hopeful for recovery in

the Capesize freight market, with 39.4% expecting this

vessel class to have strongest performance in 2017,

followed by 34.4% for Panamax, another 16.4% for

Supramax and 9.85% for Handysize.

Clearly this positivity has drawn support from the

improvement in the Baltic Dry Index (BDI) which rose by

16 points day-on-day to 969 points on Wednesday. The

increase has also been reinforced by other vessel classes

– but especially the larger ones.

“Capesizes extended their bullish open to the year with

both physical and paper seeing gains,” said a FIS FFA

broker. He credited the gains partly to potential cyclone

disruption in Australia, weather delays in China and the

lack of prompt tonnage in the Atlantic for the big push

on both the paper and physical markets.

By midweek, the spot Capesize time charter average

rate had reached $11,346, up 11% as compared to the

rates at the beginning of the week. But smaller vessels

like the Supramax and Handysize found their rates

slipping slowly since the start of the week.

For instance, freight rates for Supramax ended

Wednesday at $8,572, down 2.71% day-on-day, while

Handysize rates settled at 7,688 on 4 January 2016,

down 3% day-on-day.

The majority view is likely to be that many industry

participants view 2017 as a turning point with some

improvement giving way to consolidated gains in future

years. The SGX poll result clearly reflects this sustainable

improvement in freight rates, with 12% voting that the

freight market will be better in 2017, 28.7% choosing

2018 but most voting for 2019 as the year with best

prospects.

Whether 2017 offers a stepping stone to better days

remains anyone’s guess, but FFA traders will continue to

look for opportunities whether in an up or down market,

as the law of nature dictates that those most responsive

to change – not necessarily the smartest - will evolve

and survive. Until then, let the good times roll.

Dryships set for expansion into VLGC sector – SMN Jan 6th

Dryships is set to enter the gas carrier market with an

option agreement to buy four VLGC newbuildings from

its chairman and CEO George Economou.

The agreement comprises four separate options to buy

the VLGCs under construction at Hyundai Heavy

Industries for $83.5m per vessel. The zero cost options

are valid until 4 April 2017.

Newbuildings due for delivery between June and

December this year and all have time charters of five or

10 years attached. If Dryships takes up the options the

vessels by another Economou controlled company TMS

Cardiff Gas.



CEO George Economou

As CEO and chairman of Dryships, Economou

commented: “We believe in the long-term prospects of

the gas carrier market. Having the option to acquire a

fleet of four sister ships of very high specifications, ready

for delivery in the near term and chartered to major

industry players, provides us with a unique opportunity

to enter this new segment in a solid footing that can be

a stepping stone for further expansion.”

Wisdom Marine records lower earnings for 2016 – SMN Jan 9th

Taiwan’s Wisdom Marine has registered lower earnings

for 2016 due mainly to the low freight rates on the back

of a weak dry bulk shipping market.

The Taipei-listed dry bulk shipowner posted a net profit

before tax of $47.69m for 2016, a plunge of 32.7%

compared to the 2015 financial year.

Revenue also dropped by 4.6% year-on-year to $331m,

Wisdom Marine announced.

The shipowner said its earnings were impacted by some

early termination of vessel charter contracts in view of

weak demand, and strengthening Japanese yen leading

to heftier loans.

Wisdom Marine operates a fleet of 114 ships, mainly

handysizes, and has 21 newbuildings scheduled for

deliveries up until April 2020, according to its website.

Courage Marine eyes $12m from placement of new shares – SMN Jan 9th

Dry bulk shipowner Courage Marine has announced a plan to raise up to HKD97.03m ($12.51m) from the placing of 25.4m new shares.

The new shares will be priced at HKD3.82 apiece and the

net proceeds are intended to be used as general

working capital and funding of suitable business or

investment opportunities.

Get Nice Securities Limited, the placing agent, will place

the new shares to no less than six independent placees.

The placing shares represent approximately 19.99% of

Courage Marine’s existing issued share capital and

approximately 16.66% of the company’s issued share

capital as enlarged by the allotment and issue of the

shares.

“The board is of the view that the placing will enlarge

the shareholder base and the capital base of the

company,” Hong Kong-listed Courage Marine stated.


News AbstractsDry Bulk Terminals Group – January 2017 – Issue 164“In addition, the net proceeds of the placing will

strengthen the group’s financial position for future

development of the group,” it said.

The shipowner added that it has not conducted any

other equity fund raising exercises in the past 12 months

immediately before the announcement of this exercise.

Greek fleet grows by over 10% in 2016 – SMN Jan 11th

With a growth of 6.5% in vessel numbers and 10.26% in

carrying capacity Greek shipping continued to power

forward in 2016, an impressive feat, given the

challenging market conditions limited cash flows and

restricted bank lending.

However, while the fleet has grown, market conditions

have squeezed the number of Greek companies, reveals

a two-part annual survey on the state of Greek shipping,

by Athens-based Petrofin Research.

The first part of the survey places the Greek fleet at

5,230 vessels up from 4,909 and tonnage in dwt terms at

361.93m a 7.25% increase on a year ago.

Ted Petropoulos, head of Petrofin Research, pointed out

this “significant increase has occurred despite record

scrapping by the Greeks in 2016”.

At the same time, “large Greek owners are becoming

larger and younger as they are better able to take

advantage of poor markets and low asset prices”, said

Petropoulos, adding, “indeed, the very young fleets also

continue to rise, a sign of commitment from Greek

owners towards modern ships”.

“Greek owners have performed well compared to their

rivals as Japan, China and Germany saw their annual rate

of growth decline in 2016,” noted Petropoulos.

Average age of the fleet stands at 12.19, compared to

14.7 years in 2012. Using a 20,000 dwt cut-off, the

average age of the fleet has fallen to 8.39 years, from

9.83 in 2013.

The dry bulk fleet of vessels over 20,000 dwt has gained

111 vessels, its age is down to 8.13 years, its tonnage is

up by 7.2m dwt and is run by the same number of

companies.

The large container fleet of vessels over 20,000 dwt has

become marginally younger, 9.34 years old from 9.38

years in 2015, despite the fact that this sector

traditionally shows a slow rate of renewal. In 2016 it has

grown substantially and has gained a further 7.7m dwt

to 25.3m dwt and the number

of vessels is up from 274 in 2015 to 381 in 2016. The

companies that run these vessels are up one to 32.

The tanker fleet of vessels over 20,000 dwt shows a

marked increase in dwt terms of 14.6m in the past 12

months to 131.6m dwt compared to the 2015 increase

of just 220,751 dwt. The number of vessels is also

significantly up by 43 to 851. This sector’s companies are

down by three and age wise there

was a marginal drop to 9.35 years average from 9.49

years in 2015.

The most striking expansion is seen the LPG sector with

this fleet almost doubling in size and its age dropping

from 11.5 to 4.2 years. Petrofin comments: “This

amazing development becomes even more marked

when we observe the over 20,000 dwt LPG statistics:

Vessels are up from 26 to 66, tonnage is up by 150% and

the age is down from 13.69 years of age to 4.33.

“Further, the LNG fleet is showing an internal reshuffle,

where the same number of vessels are now 12.5%

bigger.”

The survey points out the investment in upgrading and

expansion has been “massive” investment has not paid

off, as most sectors remain fundamentally weak.

However, it is too early to opine as to the overall future

investment performance of Greek shipping and whether

Greek owners shall be able to maintain the current


News AbstractsDry Bulk Terminals Group – January 2017 – Issue 164growth momentum. Nevertheless, their track record has

shown that Greek owners timed purchases and disposals

well and remain true intuitive entrepreneurs,

Petropoulos concluded.

Uni-Asia bulk carrier collides with fishing boat, two dead – SMN Jan 11th

Uni-Asia Holdings has informed that one of its bulk

carriers had collided with a fishing boat in South Korean

waters on 11 January, leading to the capsize of the

fishing boat and death of the two boat crew.

The incident happened near port of Pohang, South

Korea when the 37,706-dwt bulk carrier MV Inspiration

Lake was en route to Nakhodka, Russia.

“The incident resulted in the capsize of the fishing boat

and sadly two of her crew have lost their lives,”

Singapore-listed Uni-Asia said.

“One crew member has been rescued whilst a search for

the remaining four crew members of the fishing boat is

currently ongoing,” Uni-Asia stated.

The vessel Inspiration Lake is owned by Regina Bulkship,

a 51% subsidiary held through Uni-Asia Shipping, wholly-

owned by Uni-Asia.

Uni-Asia is currently investigating the cause of the

collision and has confirmed that there was no oil leakage

arising from the incident.

The Korean navy and Korean coast guard have arrived

on site to coordinate the rescue operation.

A shaky start for the dry freight market – SMN Jan 13th

After an optimistic start during the first week of 2017,

the freight rates seem to slip into its old self again

recording a string of losses this week. Suddenly, the

feeling of uncertainly began to creep into the market,

raising doubts if the rate corrections are going to be a

norm or just another part of the seasonal lull?

Capesize rates in particular are suffering from the lower

iron ore exports volumes from Brazil as well as from

lower bunker prices. Currently, more ship-owners prefer

to fix shorter voyage route from Western Australia-

Qingdao iron ore route as compared to the longer

shipments from Brazil.

Moreover, the seasonal lull or the slow-down of

construction activities in China has more or less “froze”

iron ore demand as harsh winter descended upon the

country. Thus, the average spot charter rates had

reclined to $9,468 on Wednesday, down almost 12%

since the start of the week at $10,732.

In the meantime, the iron ore inventory in Chinese ports

has also increased considerably this week to a two-

month high of 112.95m tonnes. The surge in stockpiles

was due to the clearing of smog in ports which gave

much better visibility for vessels to unload cargoes at

terminals. However, it was heard that there is still a

backlog of vessels waiting to be unloaded at the Chinese

ports coming mainly from the Australian miners.

Panamaxes in contrast, haave become the darlings of

the market after the downfall of capesizes. The freight

rates of Panamax has inched upward steadily from

$7,400 before ending at $8,148 or up 10% on 11 January

2017.

Despite the good run, one FIS FFA broker remarked that

“the tone remains cautiously optimistic” as the market

lacks of clear direction. Perhaps this cautious attitude

had shrugged off from the decline of the Baltic dry index

(BDI) during the week.



On Wednesday, the BDI had toppled from the 900 mark

and stumbled to 894 points after a day-on-day drop of

32 points. With the fragile BDI, one wondered if the

index will repeat history again with a sharp drop to all-

time low of 290 points on 10 February 2016, just after

Lunar New Year day.

However, the sharp fall in rates is deemed unlikely for

2017 as the Lunar New Year started ten days earlier

from the previous year at 28 January 2017. Besides, the

freight market is often mirrored a marathon; slow start

at the beginning before picking up paces later.

With a better stronger footing as compared to 2016,

let’s hope that the freight market will finish the

“marathon” in a triumphant style and head toward an

overall recovery.

Port of Dunkirk reveals hub ambitions – SMN Jan 19th

Dunkirk, France’s third busiest port, has released strong

traffic results for 2016, confirming its ambition to

become a multi-traffic hub for northern France and

beyond.

Total traffic totalled 46.7m tonnes, a 0.3% year-on-year

rise – more impressive than it might seem because the

2015 figure had been inflated by a large amount of ro-ro

traffic displaced from neighbouring Calais owing to

industrial action and migrant unrest at that port.

Broken down by separate traffics, containers rose 7% to

341,000 teu, coal by 6% to 5.4m tonnes, other solid

bulks by 9% to 2.4m tonnes, and liquid bulk by 2% to

4.3m tonnes. Grains were down 8% to 2.8m tonnes -

because of France’s very poor harvests last year - while

ro-ro dropped even greater in volume by 2% to 16m

tonnes, described by the port as "a rebalancing to

normal after the extraordinary result in 2015 but still

very satisfactory."

Announcing the results at a press conference in Lille,

Grand Port Maritime de Dunkerque (GPMD) ceo Stéfane

Raison said the port did not merely wish to “defend

existing markets but also target new ones.” In particular,

Raison pointed to the start-up of LNG shipments into the

port, as well as expansion of the existing container

terminal plus launch of a public consultation on the

building of a new one.

The port’s chief commercial officer Daniel Deschodt

detailed to Seatrade Maritime News how the existing

Flanders Terminal, is operated by an eponymous

company controlled by Terminal (owned 51% by CMA

CGM Group and 49% China Merchants Holdings

International) with quay length of 1.2 km and water

depth up to 16.5 m.

The expansion project, to be ready by end-2018, will add

another berth of 400 m adjacent to the existing one,

allowing the simultaneous berthing of two Ultra Large

Container Ships rather than only one at present, and

raising capacity from 650,000 teu to 900,000 teu.

After that a public debate will be launched in

September, he continued, into the digging of a new

basin inland of the existing Flanders Terminal. A new

terminal located there could be gradually phased in over

the period 2020-2040, growing port capacity to an

eventual 3.5m teu.


News AbstractsDry Bulk Terminals Group – January 2017 – Issue 164Container traffic is certainly on the increase, Deschodt

said it is expected to reach 400,000 teu this year, which

would represent highly impressive 17% growth.

Cooperation with French rail operator SNCF was also on

the increase, he added, fuelling Dunkirk’s ambitions to

become an important multimodal hub for the

surrounding Hauts-de-France region – also including the

ports of Calais and Boulogne, specialising in passenger

ferry traffic and fish processing respectively – and

beyond.

Dry bulk freight market: Play up, play up and play the game – SMN Jan 19th

After a rocky start, the freight market has set off for a

campaign of recovering lost ground in 2017, in the

process regaining some of the glory seen in the latter

half of 2016.

Along the way, market optimism pushed aside waves of

doubts as the ‘main engine’ of freight rates roared into

life. And let’s hope there are no speed bumps to stop

the freight rate charge towards a promising year.

During the week, the Baltic Dry Index (BDI) snapped

back to 952 points from the sub-900 level last week,

partly influenced by a rally pre-Lunar New Year of

restocking.

Meanwhile, the iron ore market being true to its

daredevil status, had once again baffled market

expectation and went passed $80 per mt mark. The

commodity had traded in the range of $81-83 per mt for

days in defiance to many banks’ prediction of lower

asset prices.

But iron ore was not alone in the rally, its steel-making

partner, coking coal has also garnered much Chinese

buying interest after prices for seaborne cargoes

dropped lower than domestic alternatives.

The low price attracted the attention of many China-

based mills to import seaborne coking coal cargoes

either for replenish inventory or for speculating trading,

boosting tonne-miles in return.

“Right from the start there was a positive feel around

the market as the larger sizes got off to a flying start,”

commented an FIS FFA broker. He also observed that

this positivity had extended to the stability of freight

rates in smaller vessel sizes in the supramax market.

“Supramax physical seems to be steady now, finding

balance in the Atlantic and possibly seeing signs of

better demand.”

As such, capesize rates enjoyed a good run of

incremental gains during the week before peaking at

$12,512 on Wednesday, up 14% as compared to the

start of week rates at $11,002. supramax rates however

traded at $6,446 by Wednesday, relatively similar to its

starting position of $6,550 on Monday.

So it seems that freight rates are doing well in the game

of catch-up if not making great strides yet. There is some

way to go to achieve its former zenith of 11,793 points

but at least there is a steady crawl toward last year’s

peak – so until then, the freight markets will play up,

play up and play the game.

Russian ice breaker and bulker duo forced to stay for winter in the Arctic – SMN Jan 25th

An ice breaker and two bulk carriers are being forced to

wait out the winter off Russia’s Arctic coast after the ice

became to thick for safe navigation.



The ice breaker Kapitan Dranitsyn and two bulk carriers,

Sinegorsk and Iogann Makhmasta, are being forced to

stay for the winter Chukotka anchorage outside the port

of Pevek, according to Russian news site PortNews.

The port which is on the North Sea Route that connects

Europe to Asia during in the summer months, normally

closes in November for the winter, however, it had

remained open for the supply of materials for building

the floating nuclear power plant Akademik Lomonosov.

A convoy comprising ice breakers Kapitan Dranitsyn and

the two bulkers arrived in Pevek on 7 January and left

the port on 13 January but faced a barrier of heavy ice at

the exit from the Chaunskaya Guba bay.

FSUE Rosmorport said the two ice breakers could have

broken through the four – five mile ice barrier there was

risk of damage to the two Arc 5 ice class bulkers.

“It is not an emergency situation. Winter anchorage is a

positive practice to prevent incidents associated with

severe ice conditions,” a statement from FSUE

Rosmorport said.

The vessels are set for a lengthy stay with the summer

navigation period not expected to start until late May –

early June.

US infrastructure: Duelling lists of projects, and an uncertain future for cargo flows – SMN Jan 27th

Infrastructure was the talk of the day, one week into the

Trump Administration, with shares of Aecom a

construction and engineering company that frequently

sponsors American Association of Port Authorities

(AAPA) events, among the week’s best performers as

equity markets roared to new heights.

Its shares have now topped price levels seen in the

Trump Bump immediately after the election in

November 2016. Like all else with President Trump,

everything is “nuanced”, a polite way of hinting at the

need to look at multiple points of view in order to

determine what’s happening, and why.

During 2016, both the Republican Trump and his

Democratic opponent, Hillary Clinton had both made

“infrastructure” a campaign issue, though it got

drowned out by cyber things like emails and data hacks.

So, in the week after the crowd-filled Inauguration, the

Democrats came out loudly trumpeting their alternative

$1trn plan, which includes circa $65 -$70bn for seaports,

inland waterways and airports over a 10 year timeframe.

Simultaneously, the Republicans were sending around a

list of prioritized projects, which included port work at

Savannah, Port Newark and inland waterway work on

the Illinois, Ohio and Monongahela Rivers, besides work

done on the Mississippi River near the Port of New

Orleans. The Democrats would seek to fund their

programme, with specific projects not yet announced,

by tightening up existing tax loop-holes- but with the

Government spending the money; the Republican

approach would see tax credits to private developers

(further increasing the deficit).

But what if they built all the new port infrastructure, and

less cargo than forecast came? Even though sea ports

would clearly gain funding, the impacts of Trump trade-

related policies on actual shipping tonnages at

deepwater ports are anybody’s guess. In New York’s

main container ports, at Port Elizabeth and Port Newark

both on the New Jersey side of the harbour, channel


News AbstractsDry Bulk Terminals Group – January 2017 – Issue 164dredging to 50 feet finished last year and the raised

Bayonne Bridge will eliminate air draft restrictions in late

2017.

But businesses headquartered in New Jersey, bolstered

by anti-Trump rhetoric from local academics, have

expressed concern about the impact of tariffs on

containerised import cargo that has been projected to

arrive on containerships from China. Consider another

aspect of the muddied trade picture.

President Trump’s fresh endorsement of the Keystone

Pipeline, tabled by his predecessor, comes with the

requirement that the pipeline’s steel must be US

produced. Yet also look at the just opened dry bulk

terminal at Paulsboro, New Jersey near Philadelphia at

the site of a one-time BP tank farm, where a handymax

is expected to bring in the first inbound cargo- a

boatload of steel produced by the Russian steelmaker

NMLK, which has leased space at the new terminal.

Planning for the terminal, run by the Holt family,

dynastic in Philadelphia region’s stevedoring, began well

before the election. But, like other parts of the business,

long lived assets don’t always match up with shorter

term realities.

One third of vessels calling Gothenburg in 2016 got a green discount – SMN Jan 18th

One third of vessels that called at the Port of

Gothenburg last year received an environmental

discount.

Some 75 vessels calling at the Swedish port received a

10% environmental discount on port dues last year

compared to 41 in 2015, an increase of 83%.

“The growing number of vessels classified as green is

highly encouraging. They are also vessels that call at the

port on a regular basis,” said Edvard Molitor,

environmental manager at the Port of Gothenburg.

For vessels running on LNG there are further discounts

of up to 30%.

The LNG powered vessels Ternsund and Fure West,

owned by Donsö-based shipping companies Tärntank

Ship Management and Furetank both received 30%

discounts last year when they called Gothenburg port.

The discount is based on two separate environmental

indexes, Environmental Ship Index (ESI) and Clean

Shipping Index (CSI). Vessels that have a score of at least

30 according to ESI, or which are classified as green

according to CSI, receive a 10% discount on the port

charges.

Wartsila sees marine business remaining soft, order intake down 20% in 2016 – SMN Jan 27th

Engine maker and marine equipment supplier Wartsila

forecasts a soft demand outlook for its marine solutions

business following a 20% drop in order intake in 2016.

Wartsila said the order intake for its marine business by

20% to EUR1.29bn compared to EUR1.6bn a year earlier.

However, it saw a sharper decline in new orders in the

fourth quarter of 2016 down 45% at EUR258m

compared to EUR465m in the corresponding period a

year earlier.

“The weak growth in seaborne trade, low oil and gas

prices, as well as customers’ financial constraints

burdened the marine industry throughout the year,

which resulted in exceptionally low contracting activity,”

commented Jaakko Eskola CEO of Wartsila.

The Finnish company was able to largely retain its

market share with a 51% share in the medium-speed

engine market in the fourth quarter compared to 50% in

the previous quarter, while its share in auxillary engines


News AbstractsDry Bulk Terminals Group – January 2017 – Issue 164was 18% in the fourth quarter compared to 16% in the

preceding quarter.

CEO Jaakko Eskola

Overall its marine solutions business orderbook declined

by 21% year-on-year to EUR2.02bn.

Wartsila is cutting 550 jobs mainly related to engines

and R&D in Finland, a process it said was proceeding as

planned.

“Wartsila’s aim is to continuously pursue more cost

efficient ways of operating and align its operation to

market conditions. In this context, local actions in the

marine solutions business are expected to result in

additional savings of approximately EUR45m,” it said.

Looking ahead the company expects the marine

business to remain soft in 2017. “Although the outlook

for the cruise and ferry segment is positive, the

merchant, gas carrier, and offshore segments continue

to suffer from overcapacity, slow trade growth and

customers’ financial constraints,” it said.

IMO launches World Maritime Day 2017 theme – SMN Jan 19th

IMO secretary-general Kitack Lim launched the theme

for World Maritime Day 2017, “Connecting ships, ports

and people” at the Port of Felixstowe on Wednesday.

The theme is designed to highlight coherent and

connected efforts across the industry.

“Throughout the year, we will highlight the importance

of ‘joined-up’ maritime development across all sectors,

both from a policy and a practical perspective. The

benefits of a free and efficient flow of goods and trade

extend far beyond the ships and ports themselves,” Lim

said.

“As a UN agency, IMO has a strong commitment to

helping achieve the aims of the Sustainable

Development Goals. Shipping and ports can play a

significant role in helping to create conditions for

increased employment, prosperity and stability through

promoting maritime trade,” he added.

The theme was launched by Lim during a visit to Britian's

busiest container port Felixstowe.

“We are delighted to welcome Mr Lim and to support

the IMO in the important work it does to maintain and

improve standards across the international shipping

industries,” said Clemence Cheng ceo of the Port of

Felixstowe and md of Hutchison Ports Europe.

During the tour of the port Lim witnessed its operations

first hand and spoke to the crew of the Munkebo

Maersk.

Lim is no stranger to the port industry having been the

head of Busan Port Authority prior to taking up the role

of secretary-general of the IMO.

IMO sec-gen takes Europe to task on uniltateral emissions regulation plan – SMN Jan 10th

IMO secretary-general Kitack Lim has written to top

officials in Europe warning that the decision to include

shipping in the European Union’s Emission Trading

System (EU-ETS) could “seriously impact” the UN body’s

work to reduce greenhouse gas (GHG) emissions by the

industry globally.



Kitack Lim

In the letter addressed to - Martin Schulz, President of

the European Parliament, Jean-Claude Juncker,

President of the European Commission, and Donald Tusk

President of the European Council – Lim cautioned

against including ships in the EU-ETS.

“I am concerned that a final decision to extend the EU-

ETS to shipping emissions would not only be premature

but would seriously impact on the work of IMO to

address GHG emissions from international shipping.

Inclusion of emissions from ships in the EU-ETS

significantly risks undermining efforts on a global level,"

Lim said in the letter.

In December the European Parliament Environment

Committee voted to include shipping in the EU-ETS by

2023 if there is no global agreement under IMO for

operation by 2021.

In October last year the IMO adopted mandatory, global

system, for collecting data on ships’ fuel-oil

consumption part of a three step approach to decide if

further measures were necessary to reduce GHG

emissions. It also has a “roadmap” for developing a

comprehensive strategy on reduction of GHG emissions

from ships, with a view to being adopted in 2018.

Lim noted these measures had been agreed by member

states of the IMO, including EU member states, and said

they demonstrated both the UN body’s leadership and

role and also the only body that can achieve the

necessary political cooperation of all governments.

“Such political cooperation is important to ensure that

all countries act together to ensure that no one is left

behind,” he said in the letter.

The IMO has long campaigned against unilateral

regulation by individual states or regional groupings.

Lim said that, in his view, unilateral or regional action

that conflicts with or undermines actions that have been

carefully considered and deliberated by the global

community at IMO threatens world-wide confidence in

the consistent, uniform system of regulation developed

by IMO.

Shipowner representative bodies such as the European

Community Shipowners Association (ESCA), the

International Chamber of Shipping (ICS), and the Danish

Shipowners Association (DSA) have all warned against

the inclusion of shipping in the EU-ETS.

But not all parts of the industry are in agreement and

the Port of Rotterdam described the IMO’s plans on

GHG as “not challenging enough” and called on the

European Parliament to put pressure on the IMO.

Kidnappings at sea hit 10-year high in 2016 despite fall in piracy: IMB – SMN Jan 10th

Kidnappings at sea hit a 10-year high in 2016 despite

piracy attacks as whole falling to their lowest level since

1998, according watchdog the International Maritime

Bureau (IMB).

Last year saw a tripling in the number of seafarers

kidnapped for ransom by pirates with a surge in such

attacks in the Sulu Sea between East Malaysia and the

Southern Philippines.

According to the IMB pirates kidnapped 62 seafarers in

2016 in 15 separate incidents. West Africa remained a

hotspot for kidnappings with 34 of the 62 kidnappings

taking place in the Gulf of Guinea, but it is the sharp rise

in such attacks off Malaysia and Philippines that has

drawn particular concern.

There were12 crew members kidnapped from three

vessels in the Sulu Sea in the last quarter of the year.

“The kidnappings in the Sulu Seas between eastern

Malaysia and the Philippines are a particular concern,”

said Potengal Mukudan, director of the IMB’s Piracy

Reporting Centre.



IMB said it advises charterers and owners to consider

avoiding the Sulu Sea by routing vessels West of

Kalimantan. Mukundan said shipowners should avoid

high risk area.

“Shipmasters should follow the latest best management

practices and where possible take early action to avoid

being boarded. They should inform the IMB PRC or

regional counter piracy centres for help and advice,” he

said.

There was also an increased use of guns in attacks with

48 reports of the use of guns in 2016 compared to 33 in

the previous year.

Overall though the number of piracy attacks globally

dropped to an 18 year low with 191 attacks compared to

246 in 2015.

“The continued fall in piracy is good news, but certain

shipping routes remain dangerous, and the escalation of

crew kidnapping is a worrying trend in some emerging

areas,” commented Mukundan.

'Very serious concern' over kidnapping of seafarers in Southern Philippines: ReCAAP – SMN Jan 13th

ReCAAP Information Sharing Centre has very serious

concern over kidnap for ransom attacks in the Southern

Philippines, despite a 58% drop in piracy and armed

robbery attacks in Asia as a whole in 2016.

The terrorist group Abu Sayaaf started attacking

commercial vessels in the Sulu-Celebes sea area in

March last year and successfully kidnapping crew from

10 vessels, with a further six unsuccessful attacks.

Masafumi Kuroki, executive director, told a media

briefing on Friday: “We have a very serious concern over

abduction of crew which started in March and

continues.”

Prior to the first kidnapping incident in March there had

Kuroki said there had been no similar attacks reported in

the area in the 10 years that ReCAAP has been in

operation.

In total some 48 seafarers were taken hostage in the

area last year and 33 have since been released. Kuroki

was unable to say if shipping companies had paid

ransoms for the release of the kidnapped crew, although

this would seem the likely scenario.

In a worrying trend for international commercial

shipping the kidnappers have moved away from

targeting small, slow moving vessels such as tugs and

barges and fishing boats to all types of ships.

Of the 10 successful attacks, five were against tugboats,

three against fishing vessels, one on a bulker and one

general cargoship.

The six attempted attacks were against five bulkers and

one product tanker. Six attacks in November alone were

all against large sized, oceangoing commercial vessels,

prompting ReCAAP to send out a warning to

international shipping.

Kuroki believes the shift was possibly due to warnings to

small shipowners in East Malaysia, which resulted in

them making their vessels more secure.

The attacks take place in daylight and the perpetrators

are usually had firearms.

ReCAAP advises shipowners and managers to re-route

their vessels to avoid the Sulu-Celebes sea area, which

many bulkers heading from Australia to North Asia

normally transit.

Kuroki was unable to say if owners were heeding the

warning steer clear of the area, which would result in

longer transits and higher costs.


News AbstractsDry Bulk Terminals Group – January 2017 – Issue 164But it was not all bad news in 2016. The number of

vessels to steel oil cargoes dropped to three last year in

Asia compared to 12 in 2015. There was also an

extremely sharp drop in the number of attacks in the

Straits of Malacca and Singapore from 104 in 2015 to

just two last year. ReCAAP credits this sharp drop to the

arrest of perpetrators and coordinated patrols by the

littoral states.

Bimco warns on slower dry bulk scrapping in H2 2016 – SMN Jan 3rd

Dry bulk shipowners need to accelerate the scrapping of

older tonnage from the second half of 2016 to see

continued recovery in the sector.

In review of the market Bimco analyst Peter Sand said

that for 2017 it was “vitally important that shipowners

handle the supply side of the market with great care”.

The dry bulk market recovered in the latter part of 2016

from an all time low of the Baltic Dry Index (BDI) of 290

points on 10 February to a high of 1,261 points by mid-

November. While this recovery was largely driven by

demand for capsize ships from China Bimco flagged

concern over the slowing in scapping volumes by owners

in the second half of 2016 and the negative impact this

could have on the market if it continues into 2017.

“A continuance of the alarmingly low level of demolition

activity in the second half of 2016 simply will not deliver

the needed zero fleet growth,” said Sand.

With a “significant number” of new ships on order for

delivery in 2017 and 2018 some 30m dwt of scrapping

annually was required for zero fleet growth.

“This is not a tall order in theory, but the slowdown in

scrapping seen since June 2016 causes alarm bells to

ring,” he warned.

Bimco expects the supply-side to grow 1.6% in 2017

compared to an estimated 2.2% in 2016.

Predicting the unpredictable – Moore Stephens on shipping in 2017 – SMN Jan 5th

Moore Stephen’s partner Richard Greiner predicts that

oil prices will continue to rise, there will be more calls to

scrap ships, and the costs of meeting regulatory

requirements will become clearer in 2017.

Looking to 2017 Greiner noted that making predictions

about shipping was about as volatile as the industry

itself. “Who, for example, predicted that the Baltic

Exchange would be sold to Singapore?”

“Predicting shipping’s fortunes in 2017 is as precise a

science as foretelling the English weather. But some

things are at least more likely to happen than not,” he

said.

“Oil prices should continue on an upward trend on the

strength of the recent OPEC production cuts.

“Calls for higher levels of ship demolition will increase

significantly, although not ship demolition itself.

“The cost of meeting regulatory requirements will

become clearer as the industry and its financiers grapple

with the financial consequences of having to burn lower-

sulphur bunker fuel whilst ensuring that their ballast

water management systems are fit-for-purpose” Greiner

forecast.



Richard Greiner

He also said that more newbuildings would be ordered

or some shipyards would go bankrupt, freight rates

would struggle to reach levels that allow commercial

viability, and consolidation would remain key for

container shipping. Cyber-security would also move

higher up the agenda.

As to what will not happen Greiner stated: “Things that

will not happen in 2017 include another major fall in oil

prices, and a big increase in hull insurance rates.

Leicester City will not win the Premier League.”

Santa Marta tops BIMCO port performance report – PS Jan 11th

Port performance: The BIMCO Dry Bulk Terminals

Vetting Report 2016 wants to improve standards and

give guidance to shipowners

BIMCO has published its first report on global dry bulk

terminal performance which puts Santa Marta in

Colombia at the top of the table when it comes to

feedback from shipowners.

The BIMCO Dry Bulk Terminals Vetting Report 2016 aims

to drive the improvement of standards for ships at dry

bulk terminals across the world and give port call

guidance to shipowners.

Aron Sørensen, head of maritime technology and

regulation at BIMCO, said: “The dry bulk vetting scheme

makes it possible for companies to compare terminal

performances by using actual experiences provided by

the crew of the bulk carrier.”

The BIMCO dry bulk terminal data was collected in the

period from 19 January 2015 to 1 December 2016 with

94 ships providing 443 reports from 231 different

terminals around the world.

The 15 terminals with more than five ratings were

ranked in order of their performance putting Santa

Marta at the top of the table, with Bilbao in Spain and

Port Alfred in Canada coming in second and third place.

Although the report is an interesting perspective from

shipowners, BIMCO said that to date there is insufficient

data to draw solid statistical conclusions and make

substantiated statements on dry bulk terminals and

their performance. Nor can it express anything definite

with regards to trends and details.

The report does indicate a general high standard of dry

bulk terminals though with a good or excellent overall

performance especially with regards to performing

loading and unloading and the quality of the terminals

and equipment. Communication between ship and

terminal, as well as the exchange of information, was

also found to be satisfactory.

There were a few areas with room for improvement.

BIMCO said that some terminals should improve the

language skills of the terminal personnel communicating

with the ship’s crew. Terminals should also consider the

cost of services such as garbage removal and fresh water

supplies as in several cases they were found to be

excessive. The most severe observation in the survey

was that some terminals did not provide Emergency

Procedure Notices for ships berthed.

BIMCO is now calling for more shipowners to submit

feedback in order to improve the service and form more

robust analysis for next year’s report.

The report is free of charge and available for download

from BIMCO



Konecranes acquisition of Terex MHPS complete – PS Jan 5th

Konecranes can now offer a much wider product and

service range Konecranes has completed the acquisition

of Terex Material Handling and Port Solutions (MHPS).

Together the two companies will build on becoming

more technology-focused, the combined company will

have more R&D resources, introduce new products and

engineering solutions as well as further enhance its

service offering.

A Konecranes statement following the announcement

read: “Automation technology is one of our key focus

areas. Here our offering covers automated stacking

cranes (ARMGs and ARTGs), automated straddle

carriers, automated guided vehicles (AGVs) and lift AGVs

for automated container handling.”“Our software and

process knowledge is the widest and deepest in the

industry, bringing the best out of the customer’s

terminal and integrating the container handling fleet,

manual or automated, seamlessly in the terminal’s

operations.”Combined the company’s global presence

will reach of 50 countries with over 18,000 employees.

Konecranes now has three business areas; service,

industrial equipment and port solutions. With the port

solutions business being headed by Mika Mahlberg,

executive vice president.Konecranes’ expanded product

portfolio for port now includes Konecranes Gottwald

mobile harbour cranes, Konecranes Noell STS and RTG

cranes, horizontal transport for container terminals, and

Konecranes liftace lift trucks. The statement concluded:

“Technology is also a strong focus in our lift truck and

mobile harbour crane product lines. We recently

introduced eco-efficient, hybrid reach stackers and

connectivity that makes our Lift Trucks smarter, giving

customers real-time information for improving

operations.”“We have introduced new mobile harbour

crane variants to meet changing customer needs, and

we continue to fit them with the latest three-phase

drive technology for higher productivity and easier

maintenance.”

PRESS RELEASE

CARGOTEC CORPORATION, TRADE PRESS RELEASE, 24 JANUARY 2017, 11 AM (EET)

Siwertell, part of Cargotec, has secured an order from

Beijing-based Shenhua Logistics Group Corporation Ltd

for two rail-mounted ST 790-D screw-type unloaders.

The unloaders are destined for use by Suizhong Power

Generation Co Ltd and will support the company's

power plant expansion plans in Qiansuo, Suizhong

County, China. The order has been booked into

Cargotec's 2016 third quarter order intake and the

delivery is scheduled for March 2018.

"The customer chose Siwertell's totally-enclosed screw-

type technology because it needed to provide a clean,

efficient operation with minimal environmental impact,"

said Ola Jeppsson, Siwertell Sales Manager.

The Suizhong power plant currently receives most of its

coal by rail, sourced from Shenhua's own coal mines.

The expansion plans include building a new jetty to

increase coal deliveries arriving by sea. The unloaders

will discharge coal from vessels of up to 50,000 dwt at a

rated capacity of 1,500t/h for each unloader.

"Having identified the technology it wanted, Suizhong

turned to Siwertell because we are the leading supplier

of this type of unloader. We have an excellent

reputation throughout the dry-bulk handling industry for

reliability, high efficiency, impressive through-ship

capacity and very clean, safe operations.



"The light weight of our machines minimises the loads

on the jetty; in consequence our customer will benefit

from significant savings in jetty construction costs,"

added Mr Jeppsson.

The unloaders will be fully assembled at Siwertell's sub-

contractor's premises in Nantong, China. The units will

then be shipped by specialist vessel to the Suizhong

power plant, where they will be unloaded onto rail

tracks installed on the new jetty.

The unloaders will be handed over to their owners

following performance tests and final commissioning.

Clarkson commentaries – DBTO (Volume 23, No 1 – January 2017)Dry Bulk Supply & Demand Highlights

2016 was very challenging for bulkcarrier owners, with

earnings dropping below $4,000/day and the BDI

reaching a record low of 291 points early in the year.

While the demand picture improved in 2H 2016, full

year bulker earnings still averaged only $6,218/day,

which was the lowest level since 1999. Earnings in

December were also relatively muted, averaging

$8,901/day.

Bulker owners responded to depressed market

conditions in 2016 with supply-side measures, including

firm demolition and a sharp drop in newbuilding

interest. The bulkcarrier fleet expanded by 2.3% in dwt,

the slowest pace of growth since 1999, while the

bulkcarrier orderbook shrank to a 10-year low of 86m

dwt by the end of the year. However, fleet expansion

still marginally outpaced dry bulk trade growth in 2016,

thereby contributing further to oversupply pressures.

Global seaborne dry bulk trade grew 1.2% to around

4,880mt in 2016, compared to an average growth rate of

5% pa. in the preceding five years. While Chinese dry

bulk imports increased at an unexpectedly firm rate of

6% in 2016, driven by a record 1bn tonnes of iron ore

imports, global seaborne dry bulk trade growth was

hampered by a decline in import demand in other key

markets. Indeed, a 20% drop in European coal imports

spearheaded a second consecutive annual decline in

global seaborne coal trade to 1.1bn tonnes in 2016.

Firm Chinese import demand is currently expected to

continue into 2017, supporting projected dry bulk trade

growth of around 2.1%. Meanwhile, continued firm

demolition levels could help to limit bulkcarrier fleet

growth to below 2%. However, while this could help to

start to absorb some excess capacity, any subsequent

improvements in market conditions appear likely to be

limited, given the scale of existing overcapacity in the

sector in the still relatively subdued pace of demand

growth. Overall, a shift in fundamentals, with a

sustained period of conservative fleet expansion and

healthy trade growth still looks to be required to

support a better dry bulk market balance.

Seaborne Iron Ore Trade

Commentary

Global seaborne iron ore trade is estimated to have

grown 4% to around 1,418mt in 2016, driven by a 7%

rise in Chinese seaborne iron ore imports to a record

1bn tonnes. Firm Chinese import activity is estimated to

have offset a drop in iron ore shipments into most other

major importers. EU seaborne iron ore imports are

estimated to have dropped 2% to around 107mt in full

year 2016, partly reflecting the impact of depressed

steel prices and firm competition from imported Chinese

steel products on steel manufacturers in the region,

especially in 1H 2016. Elsewhere, while Japanese iron


News AbstractsDry Bulk Terminals Group – January 2017 – Issue 164ore imports are estimated to have remained static in

2016, total Asian seaborne iron ore imports (excluding

China) are estimated to have declined 3% to around

242mt, driven by a drop in shipments into South Korea

and Taiwan. Looking ahead, global seaborne iron ore

trade is projected to grow 4% to around 1,471mt in

2017, reflecting expectations of the increasing

availability of competitively priced iron ore supply,

especially from Brazil and Australia.

Iron Ore News

Chinese iron ore imports stood at 89mt in December

2016, down 3% m-o-m. Nevertheless, the volumes

imported in December still contributed to a 7% rise in

total Chinese iron ore imports to a record 1,025mt in full

year 2016, while the country’s seaborne iron ore

imports reached 1,008mt. For a detailed analysis of

China’s record breaking performance in 2016, see this

month’s Commodity Countdown (back page).

Continued firm Chinese iron ore import demand saw the

benchmark 62% FE CFR Qingdao iron ore spot price hit a

27-month high of $84/tonne in mid- January, which was

up 50% from late September 2016. Higher iron ore price

levels are expected to provide short-term financial

support to even the

higher cost, small iron ore miners, few of which have a

reported break-even point exceeding $50/tonne.

Brazilian seaborne iron ore exports rose 2% to 370mt in

2016. This was driven by shipments to China, which rose

16% to 215mt, accounting for 58% of Brazil’s total iron

ore exports in the year. The rise was also supported by

Vale’s programme of increasing output, which is set to

continue in 2017. The company shipped the maiden iron

ore cargoes from its S11D project in January 2017 and

output at the mine is expected to increase towards a

rate of 90mtpa in the coming years. This, combined with

the potential resumption of Samarco’s output, is

expected to support an 8% rise in Brazilian iron ore

exports to 400mt in 2017.

Australian iron ore exports are estimated to have risen

5% to around 804mt in 2016. This was supported a

ramp-up in production among the major iron ore

miners, as well as the addition of Roy Hill output. Roy

Hill is expected to achieve a production rate of around

55mtpa in early 2017 and contribute to a 3% rise in

Australian iron ore exports to total around 829mt in

2017.

Seaborne Coking Coal Trade

Commentary

Global seaborne coking coal trade is estimated to have

dropped 1% to a four year low of 246mt in 2016. This

was largely driven by a relatively sharp decline in

European coking coal imports, with shipments into the

EU down 9% to around 34mt, largely due to the impact

of pressure on steel manufacturers from low steel prices

and the region’s firm steel products imports in 1H 2016.

Meanwhile, steel producers in India and South Korea

also came under pressure in 2016, contributing to a 2%

and 3% decline in seaborne coking coal imports into the

respective countries. However, an increase in Japanese

and Chinese seaborne coking coal imports saw total

coking coal shipments into Asia increase 1% to 180mt in

the period. Looking forward, global seaborne coking coal

trade is currently projected to increase 1% to around

248mt in 2017. This reflects expectations of a slower

decline in European import demand, with current

projections indicating a marginal drop to around 34mt.

Meanwhile, coking coal shipments into Asia are forecast

to increase 2% to around 183mt in 2017, with continued

support from growth in Chinese and Japanese imports.

Coking Coal News

Chinese seaborne coking coal imports grew 1% y-o-y to

33mt in January-November 2016. This was

supported by a 1.5% rise in the country’s steel

production, combined with Chinese coal output cuts.

Chinese domestic coking coal output is estimated to

have dropped 11% y-o-y to 0.4bn tonnes in the first

eleven months of 2016. Looking forward, Chinese

seaborne coking coal import growth is highly


News AbstractsDry Bulk Terminals Group – January 2017 – Issue 164dependent on government policy regarding domestic

coal output. For the time being, the country’s coking

coal imports are expected to be supported by continued

firm levels in the country’s steel output. Furthermore, in

January 2017 Beijing revised the country’s metal

processing guidelines, prohibiting the sale of scrap to

induction furnace-based steel producers. This is

expected to support the country’s raw steel output and

coking coal import demand. Overall, current projections

indicate a 3% rise in Chinese coking coal imports to 38mt

in 2017.

Coking coal spot prices were boosted by Chinese

imports in 2H 2016, with the FOB Australian hard

coking coal spot price averaging $258/t in December

2016, up more than threefold from January 2016. As

profit margins rose, a number of higher cost Australian

coal miners which had suspended operations in 2015,

began to restart output in Q4 2016. Similarly, several US

coking coal miners have reportedly resumed activity in

order to take advantage of high prices in recent months.

There is still an estimated 30mt of coking coal capacity

offline in the US, which could enter the market and

support global seaborne coking coal trade in Q1 2017.

However, softening coking coal prices in the coming

months may resume financial pressure on many higher

cost US and Australian miners. Indeed, by late January

2017 the FOB Australian hard coking coal spot price had

already eased around $50/t from the start of the month.

Seaborne Thermal Coal Trade

Commentary

Global seaborne steam coal trade is estimated to have

been relatively static at 883mt in 2016. This broadly

reflects a decline in European seaborne steam coal

imports, balanced out by rising shipments into Asia.

Seaborne steam coal shipments into the EU are

estimated to have dropped 23% to 99mt in 2016. This

was spearheaded by a 74% drop in UK steam coal

imports to a 27 year low of 4.5mt, due to the impact of

the country’s carbon price support mechanism and the

shuttering of several coal-fired power plants.

Meanwhile, steam coal shipments into Asia increased

4% to 698mt in 2016. This was driven by a 27% rise in

Chinese seaborne imports, as well as firm shipments

into a number of developing Asian countries. On the

other hand, steam coal shipments into India, Japan and

South Korea, all declined in 2016. Looking forward,

global seaborne steam coal trade is projected to once

again remain fairly static at around 885mt in 2017,

reflecting expectations of a slowdown in the pace of

decline in shipments into Europe, coinciding with a slight

drop in Chinese seaborne steam coal imports.

Steam Coal News

Total Chinese coal imports stood at 26.8mt in December

2016, which was up 52% y-o-y and contributed to a 25%

rise in the country’s total coal imports to 255.6mt in the

full year. This was largely driven by Chinese seaborne

steam coal imports, which increased 25% y-o-y to

147.2mt in the first 11 months of the year. In March

2016, the Chinese government reinforced its crack-down

on surplus domestic coal output, introducing a 276

working day limit on coal mines. This contributed to an

estimated 9% decline in the country’s steam coal

output, to around 2.5bn tonnes in January-November

2016. Coal fired power generation also increased by an

estimated 4% in the period, highlighting the continued

demand for steam coal among Chinese buyers. As such,

Chinese coal mining cuts inflated global coal prices and

significantly boosted the country’s steam coal import

demand, eventually resulting in a policy reversal on

working day limits at coal mines in October. However,

since then Chinese steam coal imports have remained

firm, supported by a particularly cold start to the winter

and a slower than estimated ramp-up in domestic

output. Overall, Chinese steam coal imports are

expected to have increased 27% to around 162.3mt in

full year 2016. Looking ahead, current projections

indicate a 1% drop in the country’s seaborne steam coal


News AbstractsDry Bulk Terminals Group – January 2017 – Issue 164imports in 2017, largely reflecting expectations for a rise

in the country’s domestic output.

South Korean steam coal imports are estimated to have

dropped 3% to 98.1mt in 2016. This largely reflected the

country’s easing reliance on coal fired power generation.

Indeed, South Korean coal fired power output fell 6% y-

o-y in the first nine months of 2016, accounting for less

than 28% of the country’s total energy output in the

period, compared to a 30% share in January-September

2015. South Korean steam coal imports are expected to

remain relatively static in 2017, despite the scheduled

introduction of a number of new coal fired power

stations in Q1 2017. This partly reflects the expected

impact of a coal import tax, especially on lower-quality

coal imports.

Grain Imports

Grain Trade News

Global wheat and coarse grain trade is projected to drop

2% to around 338mt in the 2016/17 crop year. This

largely reflects expectations of a decline in import

demand in several key regions. Firstly, total grain

shipments into Asia are projected to drop 6% to a three

year low of 110mt in 2016/17, driven by a sharp

decline in import demand in China and Indonesia.

Meanwhile, an increase in domestic supply is expected

to see Iranian grain imports drop 11% to a five year low

of 9mt in 2016/17, while current projections indicate a

5% drop in grain imports into Saudi Arabia in the period.

This is expected to contribute to a 2% drop in total grain

imports into the Middle East, to around 53mt in

2016/17. On the other hand, total grain imports into the

Americas are projected to increase 2% to around 67mt

in 2016/17, supported by a rise in corn import demand

in Brazil and Mexico.

Grain Imports

Grain Trade News

Turkish grain imports are projected to grow 14% to 7mt

in the 2016/17 crop year. This is expected to be

supported by an 11% increase in Turkish wheat imports

to 5mt, given recent disruptions to the

country’s domestic output. Dry weather conditions in

central and south eastern Turkey, combined with poor

irrigation infrastructure, severely disrupted wheat

harvests early in the 2016/17 crop year. Current

projections indicate a 9% drop in the country’s wheat

output to 34mt in 2016/17. The Turkish government

recently announced the introduction of a National

Agriculture Project, allocating $4bn towards boosting

the output and stockpiling of 19 key crops, including

wheat, corn and barley. The move is considered to be

part of a programme towards controlling potential grain

price fluctuations, but is unlikely to have an impact on

the country’s domestic production until 2017/18.

Grain Exports

Grain Export News

Argentinian grain exports are projected to increase 14%

to 35mt in the 2016/17 crop year. This would be in line

with the country’s record grain exports in 2012/13 and

would account for over a tenth of global grain exports in

2016/17. The firm growth is expected to be largely

driven by Argentina’s corn exports, which are projected

to increase 28% to a record 24mt in 2016/17. This

reflects a number of factors, including expectations of a

7% increase in the country’s corn harvest to around

43mt in 2016/17, supported by suitable soil moisture for

favourable planting of early-seed crops, despite a firm

increase in rainfall in recent months. Argentinian corn

exports are also expected to be boosted by increasing

licences awarded to farmers and a relatively sharp

decline in corn exports from Brazil, given the latter

country’s limited domestic availability.

Minor Bulk Trades

Commentary


News AbstractsDry Bulk Terminals Group – January 2017 – Issue 164Indonesia has relaxed its unprocessed mineral export

ban, first introduced in early 2014. The revision is

expected to allow for Indonesian exports of nickel ore,

bauxite and copper concentrate, with certain conditions.

These include miners’ commitments to investing in

domestic smelters, converting from long-term contracts

to a mining licensing system and allocating proportions

of output for domestic consumption. For the time being,

the full details of the revision remain unclear. Jakarta

has insisted that it does not intend to disrupt the global

market, with the country’s Mining Minister projecting

only around 5mt of Indonesian nickel ore exports in

2017. However, given Indonesia’s prior position as a

world leader in nickel ore and bauxite exports, having

shipped a combined 120mt in 2013, the country’s

reintroduction into the market may eventually have a

significant impact on seaborne mineral trade flows.

Bulkcarrier Fleet

Commentary

Capesize newbuild deliveries totalled 104 units of a

combined 20.0m dwt in full year 2016. This represented

a 23% and 18% increase in terms of vessel numbers and

tonnage respectively. Newcastlemax vessels, which have

a dwt range of around 200-210,000 dwt, accounted for

almost a third of total Capesize deliveries in 2016, in

terms of tonnage. In total, 30 Newcastlemaxes of a

combined 6.3m dwt entered the fleet in the period.

Vessels in this size range also accounted for around 30%

of the Capesize orderbook at the start of January 2017,

in terms of dwt, with 58 Newcastlemax units of a

combined 12.1m dwt currently on order.

Fleet Watch – Full Year 2016

Capesize vessels:

104 delivered

78 scrapped

33 ordered

Commentary

At the start of January 2017, the Panamax fleet

consisted of 2,449 units of a combined 196.4m dwt. This

was up 0.6% since the start of 2016, in terms of tonnage,

while there was no change in terms of vessel numbers.

This compared to an 8% average annual Panamax fleet

growth rate in the preceding five years. The sluggish

growth in 2016 was largely due to lower levels of

deliveries and firm demolition activity in the sector. In

total, 114 Panamaxes of a combined 8.2m dwt were

removed from the fleet in full year 2016. This

represented a 21% y-o-y increase and a four year high in

terms of tonnage. Meanwhile, Panamax deliveries

totalled 115 units of a combined 9.5m dwt in 2016.


Panamax vessels:

115 delivered

114 scrapped

2 ordered

CommentaryNewbuild contracting activity in the Handysize sector

dropped to the lowest level in over two decades in full

year 2016, with only 6 units of a combined 142,800 dwt

reported ordered. This was equivalent to 3% of the

Handysize volumes ordered in 2015. Contracting activity

in the sector has been declining consistently for the past

four years, which has seen the size of the Handysize

orderbook shrink considerably. Indeed, at the start of

January 2017, there were only 277 units of a combined

9.9m dwt on order, compared to 429 vessels of a

combined 15.2m dwt at the start of 2016. At the start of

2017, the Handysize orderbook was at its smallest size

for over a decade, in terms of both unit numbers and

tonnage.


Handymaxes:

217 delivered

93 scrapped

7 ordered


News AbstractsDry Bulk Terminals Group – January 2017 – Issue 164Handysizes:

128 delivered

116 scrapped

6 ordered

Commodity Countdown

China Surprises With Record Iron Ore Imports

At the start of 2016 the outlook for Chinese iron ore

import growth appeared challenging, given slower

import growth in 2015, expectations of continued

Chinese steel capacity cuts and China’s ongoing gradual

transition towards a more diversified, mature economy.

However, Chinese seaborne iron ore imports went on to

significantly outperform expectations in 2016 and break

the 1bn tonne mark along the way.

A Surprising Response

Against a backdrop of moderating growth in China’s

steel consumption and Beijing’s measures to reduce the

country’s surplus steel capacity, Chinese iron ore import

growth performed at a level far higher than many had

expected last year. In early 2016, expectations were

shaped by both a 2% drop in the country’s steel output

and a five year low in Chinese iron ore import growth in

2015, as well as plans for continued cuts to steel

capacity.

However, Chinese seaborne iron ore imports

outperformed expectations in 2016, increasing 7% to a

record 1,008mt. This was the key driving force in total

dry bulk trade growth in 2016 and was largely

stimulated by three key factors.

Steel Output On The Up

The first key driver of record Chinese iron ore imports in

2016 was a stabilisation in the country’s steel output,

following a 2% drop to 804mt in 2015. The country’s

steel output continued to decline in 1H 2016, given

limited domestic demand. While Chinese steel mills

increased steel products shipments to foreign markets

by 9% y-o-y in 1H 2016, the 57mt shipped in the period

was insufficient to support overall Chinese steel output

growth. Chinese steel products exports also dropped

14% y-o-y to 51mt in 2H 2016, following the

introduction of tariffs by several importers, but also due

to firming Chinese steel demand. Indeed, a government

stimulus package launched in 1H 2016 boosted steel use

and saw steel prices rise sharply. This supported Chinese

steel mills and stimulated an overall 1% increase in the

country’s steel output to 815mt in full year 2016.

Domestic Iron Ore Mining Cuts

A further driver of Chinese iron ore import growth in

2016 was the drop in the country’s domestic iron ore

output. Financial pressure on Chinese miners from

depressed iron ore prices throughout much of the year

contributed to a 6% y-o-y decline in the country’s

domestic iron ore output, to a six year low of 1.3bn

tonnes in full year 2016, according to NBS data.

Swelling Ore Inventories

Finally, Chinese iron ore stockpiling increased sharply in

2016, partly reflecting improved expectations for steel

output at Chinese mills as the year progressed. By the

start of January 2017, iron ore inventories at 41 Chinese

ports reached 114mt, up 19% from the start of 2016 and

the highest level in over two years. So, far from

expectations of a difficult 2016 given China’s wider

economic developments and measures to reduce

surplus

steel capacity, Chinese seaborne iron ore imports

recorded firm growth to hit a record 1bn tonnes last

year. While the sustainability of this stronger growth

may be questioned, in 2016 at least, China performed

above expectations and overall was the bright spot for

seaborne dry bulk trade once again.


News AbstractsDry Bulk Terminals Group – January 2017 – Issue 164And Finally.......

This final section is starting to gain traction of sorts as three of you responded this month. One had the correct answers for both questions, the others got one right each, well done!

December Answers

*****

I asked:

The maths:

A woman has 7 daughters and they each have a brother, how many children does she have?

Answer: 8, because the 7 daughters all have the same brother.

*****

And a logic puzzle:

When you have me, you feel like sharing me. But, if you do share me, you can't keep me. What am I?

Answer: A Secret!

*****

The maths question this month:

If you take 3 apples from a bag containing 5, how many do you have?

*****

And a logic puzzle this month:

What can run but never walks, has a mouth but never talks, has a head but never weeps, has a bed but never sleeps?

*****

That is it for January. Answers to [email protected] please and I will reveal the answers in the February issue.

Further Information:

Clarkson Research: www.crsl.comFairplay: www.fairplay.co.ukFearnleys: www.fearnresearch.com

==================FUTURE ABSTRACTS

DBTG members are active world-wide so please contribute any interesting items from your own daily reading for inclusion in future issues of News Abstracts.Please send by e-mail to the Secretariat address below=================DBTG SecretariatTel: +44 1273 933817 Fax: + 44 1273 933715E-mail: info@dry bulkterminals. org


http://www.fearnresearch.com/

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

http://www.crsl.com/

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