- Environmental and climate related issues top decision-makers’ agenda
Global Maritime Forum, an international not-for-profit foundation dedicated to unleashing the potential of the global maritime industry, has published a report looking at the high impact issues anticipated over the next ten years and asks how well the industry is prepared to respond to them.
The report, based on the views of global maritime leaders, says that:
- Environmental and climate related issues jump to the top of decision-makers’ agenda
- ‘Global economic crisis’ ranked to have potentially the greatest impact on the maritime industry over a ten-year horizon
- ‘New environmental regulation’, ‘geopolitical tension’ and ‘cyber-attacks and data theft’ perceived as most likely to occur in the next 10 years
- Industry deemed least prepared for global issues considered to have the biggest impact – although more confident in some financial areas
Baltic Chief Executive Mark Jackson is today in Singapore attending the Global Maritime Forum, discussing how the Baltic Exchange can play a role in helping the shipping industry decarbonise by providing credible benchmarks for the environmental impact of shipping.
Click here to download a copy of the Global Maritime Issues Monitor 2019.
Click here to download a copy of the Baltic Exchange/Geospock paper, The future of data in the maritime sector: driving change through geospatial data
- Places available on Ship Finance Executive programme
There are still a limited number of places available on the Baltic Exchange’s Ship Finance Executive course (London 11-12 November). Led by Professor Nikos Nomikos and Dr Nikos Papapostolou from the Centre for Shipping, Trade & Finance at Cass Business School, the two day programme looks at the banking and equity markets, IPO case studies, bond markets and shipping company valuations.
For further details, see www.balticexchange.com/other-services/training-2/ship-finance-executive
- FFA basics: Baltic/ICS Lunchtime Lecture, Singapore
Kenneth Ng, Director of Digital Services at the Singapore Exchange (SGX), will look at the basics of FFAs and how they can be used to manage shipping market volatility and risk in the Baltic/Institute of Chartered Shipbrokers Lunchtime Lecture, Singapore, 27 November.
Kenneth has held various portfolios in commodities and derivatives units covering product development, management and sales.
12:15 – 13:00 Light food and drinks, networking and mingling
13:00 – 14:00 Kenneth will cover the basics of FFA, followed by short Q&A
This event is complimentary for all Baltic and ICS members to attend on a first-come, first-serve basis. All others will need to pay a fee of SGD 100 to attend.
Please send the RSVPs via: https://forms.gle/ucLi22aWLhEsh6cNA
- Baltic/ICS lunchtime lecture: Ship Finance
The next Baltic Exchange/Institute of Chartered Shipbrokers lecture in London (13 November at the Baltic Exchange) will focus on ship finance and will be delivered by Tony Foster, CIO of Marine Capital. The lunchtime lecture will focus on how asset owners and others with exposure to freight rates raise capital today; how does it affect an owner’s chartering decisions as well as related streams; why are we seeing an increasing number of charterer- owner JVs and what the motivations are for these sort of tie ups?
The popular lecture series is aimed at building wider industry knowledge amongst younger chartering and operations staff.
Tony has over 35 years’ experience in the shipping industry (including 13 years spent in Asia) spanning ownership, commercial management, broking and fund management. Together with partners, Tony has successfully bought, developed, led and sold numerous shipping businesses including ship owning, technical management, consultancy and shipbroking. One such business was merged into a pre-IPO entity which became Pacific Basin on listing, following which, Tony took up a management role in Pacific Basin and became a shareholder. After the float of Pacific Basin (which is listed in Hong Kong), he founded Marine Capital in November 2003. Throughout his career, Tony has bought, sold and chartered hundreds of ships across many sectors and since forming Marine Capital, he has led and executed a number of shipping transactions both on behalf of an in partnership with external investors. Tony graduated from Oxford in 1976 with an honours degree in jurisprudence.
Registration or any questions to firstname.lastname@example.org
- Next Baltic/ICS Shanghai lecture focuses on FFAs
The next Shanghai Baltic Exchange/Institute of Chartered Shipbrokers lecture takes place on 13 November with a focus on freight derivatives. The lunchtime lecture will be delivered by Steven Jia, Executive Director at Augustus Maritime. He will discuss how to manage freight rate risk and using Baltic indices to benchmark physical exposure and how to avoid basis risk when transferring exposure between physical and FFA markets.
Steven Jia has an MBA from HKUST Business School and a bachelors degree in Shipping Mangement from Singapore Management University. He has worked at Augustus Maritime since 2011 where he heads up shipping business. He has 18 years of shipping industry experience and five years of trading FFAs and fuel futures.
For further details, please contact Ying Sun. email@example.com
- Baltic Exchange Remembrance Service 2019
Members and friends are invited to attend the Baltic Exchange on 8 November for the annual Remembrance Day service. This year we shall be joined by musicians from the City of London Brass Band. Those interested are invited to join us from 10.45.
The Service takes place at the War Memorial in the lobby area. Coffee and biscuits will be available in the Baltic Exchange bar from 10.30.
Royal British Legion poppies will be available in the Foyer and in the Bar.
Supporting the Royal Legion Poppy Appeal
All Baltic Exchange staff/members are authorised by Nick Pentreath to issue poppies and receive donations in the streets around St Mary Axe from Tuesday 29 October. Nick will be at the Baltic Exchange that day with a supply of poppy trays and tins and would be pleased to receive some assistance from the membership. For more details, contact Nick on the details given below.
Corporate donations to The Poppy Appeal most welcome.
Nick Pentreath, Capricorn Shipbroking
Tel. 020 7283 7975
- Retired Members Lunch
There was a big turnout for last week’s Baltic Retired Members Lunch at Merchant Taylors Hall in the City of London. Around 150 retired members were welcomed by Baltic Chairman Denis Petropoulos. The lunch is always an enjoyable way to catch up and renew old Baltic friendships.
- St Andrew’s Day lunch
The Baltic Caledonia Society would like to invite members and guests to its St Andrew’s Day (29 November) lunch at the London Scottish Regiment HQ.
Starting at 12.15pm, the lunch will run all afternoon with guest speaker Will Allen in attendance in addition to the customary piper.
Tickets are £95 per person which includes one bottle of wine and large quantities of smoked salmon, haggis, neeps and tatties as well as a selection of Scottish cheeses.
A charity draw will take place before proceedings come to a close at around 6pm.
For more information and to book, contact Mike Robson.
- Celebration of Tony Hopkins
There will be a celebration of the life of former Baltic Member, Tony Hopkins, on Friday 15 November at St Peter’s Church, Tandridge, RH8 9NJ.
The event commences from 2.30 pm and will be followed by a reception at Tandridge Golf Club.
- Member update: 30 October
The following company has applied for Corporate Membership:
Company Individual Kraken Pte Ltd Captain R Shrivastava
The following individuals have applied for membership of an existing member company:
Company Individual The Air Charter Association Ltd Mr A Hodgson Maersk Broker (UK) Ltd Mr S Foulkes-Arnold Clarksons Platou Mr M Benenson Citadel Enterprise Americas LLC Mr S Carter CITIC Commodities Pte Ltd Mr C Tan Arrow Group of Companies, The Miss O Liu Exxon Mobil Corporation Mr C Zweber Clarksons Platou Mrs M Liashchenko
Any comments should be passed to Karen Karanicholas by 6 November 2019.
- Steel production dip
Global crude steel production posted its first drop in more than three years in September, reflecting a global economic slowdown.
The World Steel Association counted 151.5m tonnes of production for the 64 countries that report to it last month, a 0.3% decrease compared with September 2018.
Those trading on steel fortunes now need to wait another month to see whether this is a blip or truly the start of a wider downturn.
So far, 2019 has been a strong year for global steel with production at 1.391bn tonnes in the first nine months of the year, up by 3.9% compared with the same period in 2018. Asia has accounted for the lion’s share in 2019, producing 1.000bn tonnes of crude steel, an increase of 6.3% over the first nine months of 2018. The European Union produced 122.5m tonnes of crude steel in the first nine months of 2019, down 2.8% compared with the same period of 2018 and North America’s crude steel production was 90.6m tonnes, an increase of 0.3% compared with the same period of 2018.
Tensions running high
The figures come at a time of political tension in the steel world. An international forum aimed at reducing excess production may have had its day after China called last week for the Global Forum on Steel Excess Capacity to be dissolved.
The Forum was a non-binding initiative launched by the G20 and other industrialised countries to control the world’s steel output. With China accounting for production of 82.8m tonnes of steel in September 2019 – an increase of 2.2% compared with September 2018, according to World Steel Association figures – the real target of the Forum was clear: reduce China’s output. For comparison, India produced 9.0m tonnes of crude steel in September 2019, while Japan produced 8.0m tonnes.
Members of the Forum have openly complained that China has not adhered with reduction targets, despite promising to reduce capacity. China claims otherwise.
Its Ministry of Commerce said in a statement that it had made “the greatest and most outstanding” contribution to global efforts to reduce excessive steel capacity as it was the only country that had imposed a mandatory target upon itself.
“China has slashed total steel production capacity by more than 150m tonnes since 2016, or 114% of the global steel capacity cut,” the Ministry said. “China has redeployed 280,000 steel workers, which is more than the combined deployed number of steel workers in the US, the EU and Japan.” It also laid the global excess steel capacity issue at the door of all producers, stating that the excess was caused by a demand slump following the financial crisis of 2008 and therefore a combined effort to address it is needed by all countries, not just China.
It also pointed to World Trade Organisation rules, stating that its steel industrial policies were in line those and therefore “did not distort the market to cause excessive capacity”.
“While China’s steel capacity and output accounted for half of the world’s total, China’s domestic steel consumption accounted for nearly half of the world’s total as well – 93% of China’s steel output is used at home with only 7% being exported, and China is not disrupting global markets,” the Ministry said.
While China “regretted that the ministerial meeting failed to reach consensus”, the failure to come to agreement was “sufficient basis and reasons” to dissolve the Forum, said the Ministry.
The US had already questioned the usefulness of the Forum back in September 2018, saying that what they have seen to date “leaves us questioning whether the Forum is capable of delivering on these objectives”. In a pointed salvo at China, it continued: “We do not see an equal commitment to the process from all Forum members. More importantly, we have yet to see any concrete progress toward true market-based reform in the economies that have contributed most to the crisis of excess capacity in the steel sector.”
It is worth noting that in just over three years since its establishment the Forum has had a positive impact. The gap between global steelmaking capacity and demand fell from 700m tonnes in 2015 to 400m tonnes in 2018, largely down to China’s efforts in reducing capacity, coupled with rising demand.
China has a programme in place to shutter outdated, more polluting steel capacity. But there are claims that plants that have been closed for many years have not been pulled down so that they offset construction of newer and more efficient steel plants.
In September-October 2019, China approved eight steel capacity replacement projects, adding 17.18m tonnes per year of pig iron and 13.56m tonnes per year of crude steel capacity over the next three to four years. And then there is concern that actual output from new facilities is greater than stated, sometimes as much as 20% more.
There’s also not a great deal of incentive for China to reduce its production.
Official data from the Ministry of Industry and Information Technology reports business revenue growth from the country’s iron and steel industry of 8.9% year-on-year in the first eight months of the year. Business revenue reached 5.58tr yuan ($788.7bn) in that period, according to a statement from that Ministry.
However, there are still workings behind the scenes to get China back on side, if not from the US then at least from Japan. Japan’s Ministry of Economy, Trade and Industry has said that it will push for high level talks with China about the excess steel capacity.
While China will leave the Forum in December, Japan is looking to broker high-level bilateral trade talks to keep the conversation on excess steel capacity open with the world’s largest producing nation.
With its steel producing dominance undisputed, the remaining Forum members will have a hard time addressing global steel excesses without China.
- To all those tickled by trout!
The Baltic Exchange is taking a table at this year’s Lloyd’s Flyfishing Society’s (LFS) Annual Dinner on Thursday 7 November.
Held at the Honourable Artillery Company in the City, this will be a great opportunity to meet fellow anglers and for Baltic members to apply to join the LFS. Benefits of membership include discounts at some of the UK’s best known fishing stores, but also more importantly access to deeply discounted fly fishing days on some of the best chalk streams in Southern England, including the Test, Itchen, Kennet and Avon.
LFS annual membership is reasonably priced and for a keen fly fisherman will bring significant savings on their extremely desirable water.
Tickets for the dinner are usually £125 a head, but for the first ten lucky applicants there is no cost. Entertainment on the night includes speaker Luke Jennings, author of “Killing Eve” as well as “Blood Knots” a literary masterpiece on the noble art.
The Baltic Exchange is delighted to offer this exciting member opportunity, but only true Piscators need apply.