- Posidonia: Baltic Exchange Risk Forum
The Baltic Exchange chose the idyllic setting of the Yacht Club of Greece to stage its Risk Forum on the opening day of Posidonia 2018.
The programme included discussions around managing risk, the role of FFA’s, democratising investment in shipping and a panel discussion addressing the commercial implications of the 2020 Sulphur Cap.
Speakers included: Mark Jackson, CEO, Baltic Exchange, Duncan Dunn, Director, SSY, Marc Pauchet, Senior Research Manager, Maersk Broker, John Kartsonas, Managing Partner, Breakwave Advisors, in addition to Theofanis Anastasiadis Projects Manager Starbulk, Brian Nixon, Managing Director, Lavinia Bulk Ltd. and Angelica Kemene, Head of Market Analysis & Intelligence, Optima Shipbrokers.
Pictures of the event are now live via the Baltic Exchange Flickr account and can be viewed here.
- Posidonia: The Baltic Exchange reception at the British Ambassador’s residence
Baltic Exchange chairman, Duncan Dunn welcomed esteemed guests and fellow Baltic members to the Baltic Exchange reception at the British Ambassador’s residence on 5 June.
The Baltic chairman spoke of the developments at the Baltic Exchange while paying special attention to the strong relationship the Baltic holds with Greece, stating:
“The relationship between the Baltic Exchange and Greece is one based on traditions and long-standing ties. Greek shipowners, based in London and Athens, have long been the backbone of the Baltic Exchange. Posidonia for us is very much a celebration of those ties, and I am delighted that so many members of the shipowning community are with us here tonight.”
Pictures are now available via the Baltic Flickr account and can be viewed here
- Posidonia Cup: Baltic Exchange crew take to Faliro Bay
The Baltic Exchange took part in the bi-annual Posidonia Cup on Friday 1 June.
Competing in the Classic Boat division, the crew finished second with a finish time of 17:24:18
Well done to all our Baltic Exchange crew on the Larne!
Alexandros C. Kedros (yacht owner)
Philip Bacon (skipper)
To see pictures of the race, click here.
- Greek wine tasting photos
Photos from the recent Baltic Exchange Greek wine tasting event are now live via the Baltic Exchange Flickr account and can be viewed here.
- Fehr Tennis Cup
On 27 June the Baltic Exchange will be holding the annual Fehr Cup at Surbiton Racket & Fitness Club.
Tennis, Pimms, summer lunch with strawberries and cream, this fantastic networking opportunity for tennis players of all levels is a must in the shipping social calendar. Taking place on the grass courts of Surbiton and including lunch and tea in the clubhouse, the tournament is split into two parts after an initial stage which gives, more social players an afternoon of relaxed open competition in the American Tournament, while the pros peel off to dual for the big ‘Fehr Cup’ prize.
Entry, including lunch and refreshments, is £70 per pair.
For more details, please email:
Catharine Bacon – firstname.lastname@example.org
Perry Perera – email@example.com
- Driving up freight rates
Grab every opportunity to drive up dry bulk freight rates, an audience were told at this week’s Baltic Exchange-sponsored TradeWinds Shipowners Forum at Posidonia 2018. The Forum saw a range of key players in the dry cargo shipowning sector discuss swingeing issues for the industry, drawing the conclusion that there are opportunities on the horizon if owners are able to capture them. The panel, which included BIMCO president and its Board of Directors’ chairperson Anastasios Papagiannopoulos, American Bureau of Shipping chairman, president and chief executive Christopher Wiernicki and Star Bulk commercial director Milena Pappas, discussed the sluggish arrival of a long-awaited robust recovery for the dry bulk industry, questioning what has caused the delay and the seriousness of the prolonged trough. The high-profile panel also considered whether fundamentals are as secure as many anticipated them to be and how owners are adapting their strategies, as well as exploring how, in difficult markets, businesses can best adapt to survive regulations, social demands and technology.
As moderator, TradeWinds editor-in-chief Julian Bray set the scene, explaining that although there were signals of positivity for the dry bulk industry, the legacy of the 2008 financial crash and the events of the past decade continues to “[hang] heavily over this business”. He identified three big issues currently framing the general picture for shipping. Firstly, the seismic change in the entire world, in different forms, in the last 10 years shows “no signs of slowing”. According to Mr Bray, old certainties have disappeared and more black swans have emerged, and although the old world order is breaking down, it is not really clear what will replace it.
Secondly, many of the post-crash financial sector reforms have “meant profound changes to the supply of capital in every level”. This has led to tighter standards for shareholders, lenders and consequently shipowners. Shareholders in public companies are increasingly rebelling over corporate governance standards and interest rates and inflation are going up. The final issue was the drive towards the low carbon economy, with Mr Bray saying that the push for a sustainable economic growth model “will have profound implications in the longer term”.
“So, there’s this changed political landscape, the changed financial and capital landscape and changes to the operating model,” he said. “And of course, layered into all of this is the rolling revolution, the rolling thunder, of digitalisation, which is already upheaving every element of our personal lives and is nibbling at the edges of shipping.”
There’s this changed political landscape, the changed financial and capital landscape and changes to the operating model
Megatrends and uncertainty
During the Forum, Mr Wiernicki was of the opinion that world growth; oil price stability; a societal norm focused on minimising environmental impact and maximising safety; and technology were megatrends for the shipping industry. With those in mind, the ABS chief executive believed that, aside from the supply/demand imbalance, shipowners need to be ready for optimisation of performance and fleet as well as cybersecurity, digitisation and air emissions constraints.
A theme of discussion about uncertainty for the dry bulk sector also emerged. Mr Papagiannopoulos felt that visibility was very bad, with the BIMCO president saying that it is very hard to make a prediction even for the next few months.
“The fundamentals are very good [in the dry cargo sector], but the other conditions which affect the market are a bit uncertain at the moment,” he said.
Alexander Saverys, chief executive at Hunter Maritime and Compagnie Maritime Belge, was questioned about the US president’s trade policies by Mr Bray. In response, he said: “On Donald Trump, it’s been said every tweet creates uncertainty. Uncertainty is not good for our business. In the long run, all these trade barriers could create opportunities, but in the very short term, it’s not good.” On the other hand, he talked up the benefits of China’s Belt and Road initiative, describing it as positive for dry bulk.
“I’m very happy as a shipowner, as a European shipowner, that China is now taking the lead,” he said. “If the US doesn’t want to follow that’s too bad for them, because the next decade is going to be led by China.”
Still, there were those who believed that uncertainty can be capitalised on.
“It’s not ‘coping’ and [instead] just ‘following’ the uncertainties, because you have to be in the market, you have to be monitoring what is going on,” said Ismini Panayiotides, founder and chief executive of Pavimar Shipping. “We are a small owner but we entered the market in what I think was rock bottom about a year and a half ago, so we are opportunistic. We’re there to take advantage of what traditional shipowners have been doing for years: take advantage of the upturn — which we have already been enjoying. So while these uncertainties are creating a bit of nervousness in the market, they are also points of opportunity that we could all take advantage of. If you are there for cost monitoring, and keeping your cost bases low, you could sustain it and come out of it as a winner.”
Cargill president Jan Dieleman spoke of excess volatility in the dry bulk market that was at a level that was higher than anticipated. “Read the news: the stock market is up, down, and [the] capesize market is doing similar things,” he said. “I do think we’re getting into an environment which is more normalised, with stronger demand. So in that sense I think volatility will remain, and to be honest, a company like ours actually likes volatility.”
Peter Weernink, SwissMarine Corporation (of Bermuda) director, also saw opportunity in the current market: “Despite all the forces majeures which we’ve had the first half of this year … the market has actually held up quite well, and that sets the pace for something much healthier going forward.”
Ms Pappas agreed that the trend is upward generally for dry bulk, albeit surrounded by volatility within the year. She pointed to environmental regulations coming into play as drivers of change for shipping, bringing with it the anticipation of increased scrapping. Citing the 2% net fleet growth anticipated from the current dry bulk orderbook, she added that the fundamentals are “more or less very positive”.
John Michael Radziwill, chairman and chief executive of Goodbulk and C Transport Maritime, pointed up an emerging coal trade “which no one really saw coming” and an iron ore trade which is “going to grow a lot quicker than it did in the first half of this year”. While he hoped for an increase in capesize rates he said it was up to owners to make it happen: “Now is the time, for lack of a better word, to be greedy every time you fix a ship — grab the last cent out of it — because it’s been ten years, guys,” he said, that final remark being met by a wave of knowing laughter from the dry cargo forum audience.
- Photos from the YBA London event
Photos from the recent Young Baltic Association (YBA) event at Flight Club Darts are now available via the Baltic Exchange Flickr account and can be viewed here.
- Photos from the YBA Singapore event
Photos from the recent Young Baltic Association (YBA) Singapore event at the Exchange Bar are now available via the Baltic Exchange Flickr account and can be viewed here.
- Baltic Exchange Training Courses – June 2018
The Baltic Exchange is now taking bookings for its training courses in London and Singapore during June.
The courses offer high-level training to shipping, financial and commodity professionals. Courses taking place in June include:
Freight Derivatives & Shipping Risk Management (25-26 June, Singapore)
Delivered over two days by experts in the areas of shipping and commodity risk management, the Shipping Risk Management course aims to raise market awareness of risks involved in shipping businesses and how various physical and derivatives instruments can be used to control such risks efficiently and effectively. Participants will learn how to analyse and measure the impact of financial risks involved in shipping investment and operations, and how to select and execute effective strategies to minimise or eliminate such risks, stabilise their cash flow and maximise the return on investment more efficiently.
Advanced Freight Modelling and Training (27-28 June, Singapore)
This advanced two day module focuses on modelling freight rate dynamics and pricing options on freight. It discusses issues which are relevant to shipping market practitioners such as constructing forward curves on freight, modelling freight rate volatility as well as hedging and trading strategies using freight options. The course aims to provide delegates with both a theoretical foundation as well as practical hands-on experience.
Shipping Economics & Investment (18-19 June, London)
The course aims to provide delegates with both a theoretical foundation as well as practical hands-on experience on modern shipping economics and investment. It provides delegates with the essential knowledge of shipping economics, operations and investment management. The programme covers the microeconomic structure of the shipping markets including freight, second-hand, newbuilding and scrap markets and presents how these shipping markets interact.
For more information or to book onto one of these courses, click here.
- Member update
The following individuals have applied for Membership of an existing member company:
Company Individual Clarksons Platou Mr J Newcombe Cass Business School Miss A Kontou Mr A Abou Merhi Mr I Gulbransen Mr E A Hanevik Mr H Lee Mr J Elsahli Mr O M Kritikos Mr I Moulatsiotis Ms A Mourmouri Miss E Drakopoulou Mr G Papageorgiou Mr P Sevcovs Mr G Pyrinis Mr M Schroder Miss M E Sotirchaina Mr B Taejun Miss J Tang Miss S Wang Miss Ying Lu Mr J Zhao
Any comments should be passed to Karen Karanicholas by 13 June 2018.