- Baltic Exchange and TradeWinds International Shipbroking Forum
On 11 September the Baltic Exchange, in partnership with TradeWinds, will be presenting the International Shipbroking Forum, London, at the Doubletree By Hilton, Tower of London Hotel. The event, which takes place during London International Shipping Week, will incorporate three sessions. These sessions are as follows:
Panel One 2-3pm
Relevant, reliable and tradable: Indices for today’s shipping markets
Panel members include Emanuel (Manu) Ravano, CEO, Ifchor; John Banaszkiewicz, Managing Director, FIS, Chris Reilly, Managing Director, BRS Futures and Ben Gibson, Head of LNG Derivatives, Affinity Shipping. Mark Jackson, CEO, Baltic Exchange, will moderate the discussion.
Panel Two 3.10-4.10pm
Shipbroking and Digitalisation – Disruption, Diversification and Differentiation
Julian Bray, Editor-in-Chief, TradeWinds, is joined by Mark O’Neil, President, Columbia Shipmanagement Ltd; Ami Daniel, CEO, Windward; Martin Hjelle, Head of Technology, Western Bulk; Viral Shah, Head of Freight Trading, RWE Supply and Trading; Nico Borkmann, Director and Executive Board Member, Braemar ACM Shipbroking.
Panel Three 4.30-5.30pm
Regulation & Shipping – what’s come/coming over the horizon?
Stefan Albertijn, Chairman, Baltic Index Council will be joined by Duncan Dunn, Senior Director, SSY Futures Ltd; Brian Nixon, Managing Director, Lavinia Bulk Ltd and Jonathan Herbst, Global Head of Financial Services Regulation, Norton Rose Fullbright LLP.
Registration for the event commences from 1pm, with opening remarks taking place at 1.30pm. Short breaks will be held between sessions, with a networking drinks reception on the Savage Garden rooftop immediately following the forum.
For more information and for registration enquiries, click here.
- Changing perceptions: The Suez Canal at 150
A new image
Four years have passed since the new, expanded, Suez Canal was opened. The US$8.6 billion project, funded entirely by public subscription, widened and deepened the existing waterway and created a parallel 34-kilometre channel to allow two-way transit along part of the route from kilometre 51 to 122 of the 161-kilometre waterway. The Canal Authority says the expansion has reduced navigation times from 18 to 11 hours and aimed to increase the number of ships transiting the Canal by the year 2023 to 97 per day.
Historically, some of the realities of moving through the Canal have been questioned. Providing ‘gifts’ to local Pilots to ensure safe passage being one such example that splits the opinion of operators, with reports of those Masters unwilling to do so subsequently facing challenges in persuading Pilots to navigate them through the Canal. However, the Port Authority makes clear that it is working hard to ensure such instances are not a part of its future, assuring those in attendance that should there be misunderstandings moving forward that the Master of any ship transiting the Canal should feel comfortable contacting the Authority directly to ensure this, or any other type of situation, is swiftly resolved.
Tolls and pricing advantages
The Canal Authority makes clear that the expansion in 2015 has not impacted the calculating of its tolls. Fees for transiting the Canal are based on Suez Canal Net Tonnage (SCNT), which take into account vessel particulars, trade route, economies of scale, market conditions and the cost of moving cargo via Suez compared to alternative routes.
The SCA has adopted what it calls flexible marketing policies to encourage vessels to use the Suez Canal route. These policies include rebate systems including the longstanding policy in place for long haul vessels, which looks to ensure tolls don’t exceed the value of using the Canal. Another rebate structure is in place for LNG vessels with 5%, 7% and 10% rebates offered on vessels carrying 1-3, 3-10, and 10+ million tonnes of cargo respectively.
In addition to these, permanent toll reductions of 25% for LNG carriers and 50% for cruise vessels calling at ports in Egypt, the Red Sea or the Mediterranean are in place, with a full exemption for ships transiting the Suez Canal for repair or maintenance in SCA shipyards or its affiliated companies. Temporary toll reductions are also in place for dry bulk, tanker, container and LNG vessels through a system of circulars, more details of which can be found on the SCA website.
In terms of tolls for passing through the Canal, officials were keen to make clear that technically vessels of all sizes can pass through Suez, albeit with the very largest carriers needing to be partially laden. The SCA at this stage highlighted the Sumed pipeline, stating that supertankers can pass through the Canal should they choose to lighter part of their cargo through this pipeline. Tolls of US$0.63 are levied on each metric tonne of crude oil cargo via this option, with the toll for the remaining crude oil cargo carried by the tanker calculated by deducting the volume discharged at Sumed from the total cargo indicated in the cargo manifest and the bill of lading.
Focus on safety
Throughout the presentation, the importance placed on safe passage was a consistent theme. Officials from the Port Authority were keen to present the range of measures they have in place to ensure this.
The Suez Canal Maritime Training and Simulator Centre aims to educate Suez Canal Pilots on the safe handling of vessels during different navigational scenarios. Ships are further monitored during their passage through the Canal via an advanced radar network, with 16 pilotage stations (approximately one every 10 kilometres) along the waterway. The traffic system has two convoys, one from the North and one from the South. While navigational aids such as tugs, pilotage stations and buoys, for which there are 650 along the waterway of the Canal, help further support the passage of ships during transit.
According to the Suez Canal Authority, it is the implementation of these measures that ensures accidents in the Canal are uncommon and if they do occur, the interruption to navigation is now minimal.
Baltic Exchange Chairman, Denis Petropoulos, joined those in attendance. Catching up with him after the presentation his final assessment was simple, “Suez represents an essential seaway for the global movement of trade, where time is money and safety is paramount.” Through the developments at the Canal, the SCA is aiming to ensure these essential aspects of the movement of trade continue to be achieved with the highest levels of efficiency and safety, while ensuring that those passing through Suez know that should either of these aspects not be satisfactorily achieved, the communications channels are open and available to ensure this is corrected.
For more information, visit www.suezcanal.gov.eg
- Baltic LNG Index update
The second of the Baltic Exchange’s LNG assessments goes live on 13 August following a successful trial and approval by the Baltic Exchange Index Council. BLNG3 (Sabine/Tokyo round voyage with routing via Panama) is now available to members and subscribers at www.balticexchange.com.
BLNG2 (Sabine/Isle of Grain round voyage) moves to Public Trial.
The Baltic LNG Index is published on Tuesdays and Fridays at 1100 (London).
For a free trial of Baltic Exchange data, visit www.balticexchange.com/join/free-trial.shtml
- Member update: 14 August
The following company has applied for Corporate Membership:
Company Individual Braskem Netherlands BV
Mr D Figueiredo Ms J Bulegon
The following individuals have applied for membership of an existing member company:
Company Individual BHP Billiton Freight Singapore Pte Ltd
Mr J Ly Engelhart CTP (Switzerland) SA Mr R Segond Japan Shipping Services Co Ltd
Mr M Aoyama Ms M Eto Mr Y Furukawa Ms N Kozono Mr Y Miyamoto Ms Y Saito Miss N Yamada Mr S Yoshida RWE Supply & Trading GmbH Ltd Miss C Atherton
Any comments should be passed to Karen Karanicholas by 21 August 2019.
- TradeWinds Shipowners Forum Greater China 2019
The Baltic Exchange is supporting the annual TradeWinds Shipowners Forum Greater China 2019 in Shanghai.
The event takes place on 5 September and all Baltic members who would like to attend are entitled to a discounted rate.
To obtain this discounted rate, please email firstname.lastname@example.org and state that you are working for a Baltic member company.
For more information, click here.
- Hope on the horizon
Petter Haugen, equity research analyst for Kepler Cheuvreux and Swedbank, is looking forward to 2020. In a speech delivered at Marine Money Week, Mr Haugen unreservedly expressed his enthusiasm for the upcoming year: “In my experience — 12 years in shipping — I’ve never been that excited for the next year as I am now,” he said at the event in New York.
Why is Mr Haugen so eagerly anticipating 2020? In his opinion, next year will be the first year since 2007 when all areas of commodity shipping reach a simultaneous cyclical high. According to him, “the case is building for a prolonged super-cycle”. There are two drivers for this, he said. The first is that significantly lower ordering in 2016-2018 will yield lower fleet growth for 2018-2020 and orderbooks are now below most historical comparisons. The second driver relates to “the US shale revolution”.
Next year is a big year for maritime. As soon as the clock strikes midnight at the end of the 2010s, vessels operating outside designated emission control areas will have to ensure that they keep the level of sulphur in their fuel oil at no more than 0.5% mass by mass (IMO 2020). Coupled with production cuts by the Organization of the Petroleum Exporting Countries (OPEC), this imminent limit is responsible for the positive consequences of greater oil prices, in Mr Haugen’s view.
He predicts that elevated bunker prices are set to slow up vessel speed to decrease consumption. This is set to lower effective supply, a freight rate tailwind. Additionally, Mr Haugen said that greater commodity pricing generates more headroom for shippers to pay extra for transport — whether it be for LNG, crude oil, refined products or liquefied petroleum gas. According to him, a bigger oil price boosts the preparedness to pay for transport services. As for reductions by OPEC, Mr Haugen claimed that decreased exports from the Middle East to Asia are set to be supplanted by US exports, which travel further and use more vessels.
Next year is a big year for maritime
“OPEC cuts are simply subsidising US shale and moving incremental production two to three times further apart from consumption,” he argued, venturing that together, all these elements could next year lead to a super-cycle scenario for shipping and its equities.
Mr Haugen is not alone in his optimism. Other shipping analysts are also anticipating that next year, freight rates will rise steeply. Curtailed fleet growth combined with IMO 2020 will mean less ships on offer for charter. Randy Giveans, analyst for investment banking company Jefferies, says that though the first half of 2019 “was bad pretty much across the board for shipping rates”, next year appears a lot healthier.
“2020 is looking much better due to slowing supply growth and the positive impacts of IMO 2020,” he said.
Meanwhile, Jo Ringheim, analyst at Norwegian investment bank Arctic Securities, hints that regardless of trade issues, the company’s forecast for shipping of commodities is upbeat.
“With orderbooks close to historical lows in commodities shipping, we are constructive on the outlook despite the trade tensions,” he notes. “We also remain upbeat for oil tankers due to increased long-haul Atlantic [Ocean] exports, a manageable orderbook and the anticipated IMO 2020 impact on oil-demand and vessel-supply.”
Returning to Mr Haugen’s presentation, there are three catalysts for the simultaneous cyclical high of next year. The first relates to the idea of the trade war being rationally resolved by more US exports. The second is linked to the concept of OPEC reductions, with a greater oil price, supporting shipping through different avenues, and the third is connected to IMO 2020 decreasing supply by making the global fleet sail slower.
However, he added two caveats to his upbeat prognosis: firstly, shipping is among the planet’s most volatile businesses, and secondly, “consensus will always lack imagination”. The shipping industry could well be its own worst enemy when it comes to supporting a sustained recovery.
The Baltic Exchange will hold its next Advanced Freight Modelling & Trading course on 9 and 10 October in UK capital London. More information can be found here.
- An evening with Paralympic sailor Hannah Stodel
Co-hosted with HFW at their London office, BESA is delighted to invite its members and the wider Baltic Exchange community to a special presentation on Wednesday 9 October given by British Paralympic World Champion, Hannah Stodel. Hannah will share the inspiring story of her success and discuss the next challenge she has set herself: to become the first disabled sailor ever to take on the Vendée Globe. Racing 24,000 miles around the world – nonstop and without any assistance – Hannah plans to set three major records along the way.
Registration for the event begins at 5.15pm, presentation at 5.45pm and networking over drinks and canapés at 6.30pm.
About our speaker
Three times World Champion and four times Paralympian, Hannah Stodel was born missing her lower right arm but she is a force unto herself and it has not stopped her from competing in able-bodied competition. Besides her three World Championship titles and scores of other results and awards, she’s been the global leader for reinstating disabled sailing into the Paralympic games and is an ambassador for Ditch the Label (anti-bullying) charity in London. With a fierce determination, Hannah is now undertaking the greatest challenge yet, her personal “Everest of the Seas” by competing in the Vendée Globe. We very much hope you can join us for what should be an interesting and inspiring event.
Please RSVP if you wish to attend (including your intended number of guests) to Philip Bacon (email@example.com). Alternatively please contact Amanda Hastings, BESA Social Secretary, (firstname.lastname@example.org) or Camilla Robertson at HFW (email@example.com).
- Finn Trophy – 21 Sept, Isle of Wight
This annual event traditionally brings together two or three flotillas of ocean-going boats that compete as teams in name of The Baltic Exchange, Lloyd’s of London, and sometimes The London Stock Exchange. This year, we have agreed with several other City-based sailing clubs to mutually open our summer / post-summer events, so we might have other teams competing, e.g. John Lewis or The Portcullis Club.
On Friday 20th September evening, crews gather in Cowes for dinner and light refreshment, in concentration for the athletic feats of the following day. Early on the 21st, a starting gun will see the flotillas race off neck to neck round a dedicated course within the Solent, which will be shorter than last years’ Nab Tower race. After the racing and the traditional ‘apres’ social on Marina and nearby watering holes, Saturday evening the motley crews regenerate themselves into a glamorous gathering for Dinner at the Royal Yacht Squadron and perhaps prize giving, if the winners can be decided.
Companies or groups may enter boats and crews in the Racer or Cruiser categories for Team Baltic; if you are not part of one, please get in touch as we will be seeking to accommodate individuals on Team Baltic boats in need of crew. There will be Special Provisions for Young Baltic Association members.
If you have never sailed, don’t be daunted – this is a perfect chance to try it out!
Please contact Philip Bacon for further information and entry forms.