- Baltic & ICS Lecture Series 3: Greece – The 2020 IMO Sulphur Regulations
The next Baltic Exchange/Institute of Chartered Shipbrokers lecture will be taking place on Tuesday 3 December 18:15 – 20:30, ICS Greek Branch, 1 Platonos str., 18535, Piraeus Greece.
The lecture led by Mr. Evangelos Catsampas, Partner, Watson Farley & Williams LLP will focus on the 2020 IMO Sulphur Regulations. Mr. Catsampas has 20 years of experience in shipping litigation/dispute resolution (charterparty, bill of lading, shipbuilding contract and MOA disputes), maritime casualties, general commercial litigation/dispute resolution and (non-contentious) contract drafting. He has a diverse practice, working for shipowners, charterers, cargo traders, bunker traders, P&I Clubs and Hull & Machinery insurers.
The popular lecture series is aimed at building wider industry knowledge amongst younger chartering and operations staff and is free to Baltic and ICS Members, €100 for non-members.
Drinks & Finger food are included.
Please email firstname.lastname@example.org to reserve your place.
- Baltic supports The Mission to Seafarers with ‘Tap for Change’ this Christmas
To support their mission during this Christmas period, the Baltic Exchange will be displaying a contactless donation box in reception for donations to the charity from 2 – 9 December 2019.
All donations are gratefully welcomed.
If you are unable to visit the Baltic offices during this time period however, you can donate The Mission to Seafarers online here.
- Iron ore workshop
Fastmarkets MB and SGX are holding an iron ore workshop and networking drinks event at the Baltic Exchange on 4 December. With China dominating headlines in business and politics, iron ore has grown in importance due to is position as a key element in the Chinese economy. Iron ore trading volumes have grown year-on-year and is set to surpass 2 billion tonnes for the first time in 2019. This event is a workshop followed by a networking reception which will be your opportunity network with a wide range of industry participants.
Date: 4 December 2019
Venue: The Baltic Exchange, 38 St. Mary Axe, London
Time: 2pm to 4pm: Workshop Presentation
4pm to 6pm: Networking Reception
The workshop will feature topics including:
- Fundamentals of the of the iron ore market
- The role iron ore plays in the Chinese economy
- 65% iron ore – the ‘greener ore’
- Hedging strategies
- Iron ore as an investment product
Cheong Jin Yu, Director of Commodities, SGX
Peter Hannah, Index Manager, Fastmarkets MB
If you cannot join for the workshop, please feel free to attend the networking reception.
Please click here to register for the workshop and/or networking reception.
- Baltic Exchange App
The Baltic Exchange has launched a new mobile App for Members and subscribers to its data.
Designed for Android and iOS operating systems, the app provides instant access to a wide range of Baltic information including rates, fixtures, Member contacts, news and much more.
Key features include:
- Live market data, including all historical Baltic indices & assessments and charts
- Live and historical FFA data, including forward assessments and volumes
- Push notifications for all Baltic spot data upon publication
- Member search facility. All company and individual contact details easily accessible
- Market intelligence including daily & historical fixtures, market reports, circulars and news
- Listings of all Baltic Exchange meetings, social and educational activities
Users can customise data notifications to receive the information they need as it’s published.
To sign up, you will need to register using your existing Baltic account here. Fill in the details using your personal corporate business email address.
The App is available only to members and subscribers to balticexchange.com – access is available to individuals who are registered with the Baltic Exchange as part of their corporate membership. If you have any questions, please do not hesitate to contact email@example.com
- New Baltic training courses: IMO 2020 bunker hedging and FFAs for LNG
The Baltic Exchange is launching two new half-day training courses in Singapore this February as part of its Baltic Academy programme. Bunker Hedging Post IMO 2020 (4 Feb) and Managing LNG Freight Risk (5 Feb) will be led by risk management specialist Mikal Boe.
Bunker Hedging Post IMO 2020 is for bunker buyers, traders and suppliers wishing to understand how IMO 2020 may affect the hedging of bunker fuel prices as the ‘old’ contracts disappear and ‘new’ ones emerge. Attendees will learn best practices in bunker fuel price risk management, using new low sulphur fuel oil contracts and gasoil contracts as well as basis risk between ports and how to manage regional discrepancies.
Bunker risk management essentials
– The economics of a bunker hedge in a COA and for bunkers on redelivery
– Classic signs of when to hedge and when to float on the spot market
– Tried and tested hedging strategies – practical examples
– How IMO 2020 changes bunker hedging,and why
Hedging bunker price exposure with new contracts
– Term structure and oil market dynamics
– The new low sulphur fuel oil contracts, market mechanics post 2020
– Low sulphur marine gasoil contracts
– Basis risk and regional price differentials, best practice hedging
– New hedging strategies – practical examples
– Execution, clearing, collateral and cash management
Cost: USD 600/SGD 800
Managing LNG Freight Risk Using Futures teaches participants how to trade and use FFAs effectively to manage pricing risk from volatility in LNG freight rates. This half day course is designed to help build confidence in using new indices from the Baltic Exchange in managing risk for shipping and is suitable for both LNG and shipping company executives.
The Baltic BLNG Index
– Comprehensive understanding of the BLNG Baltic Index and Index methodology
– The role of panels and integrity of the market
– Pricing of the Index on time charter and voyage charter
– Calculating ‘Basis Risk’ between the LNG Index and main LNG trading routes
– Index Settlement mechanisms and correlations
– Term structure of the LNG forward curve
– Contango, backwardation, inversions and seasonality
Putting it all together with FFAs
– Composition, construction and use of an LNG FFA derivatives contract
– Practical application of LNG FFAs to freight contracts and time charters
– Calculating pricing risk, calendar risk and cash flow
– Settlement mechanisms
– Leverage and Margining and mark-to-market
– Stress testing
– Examples and practical uses of an LNG FFA contract
Cost: USD 600/SGD 800
For further details and booking, please contact Bill Lines. Email: firstname.lastname@example.org or call +44 (0)20 3326 8450
- Member update: 27 November
The following company has applied for corporate membership:
Company Individual BG Shipping Co Limited
Mr Z He Mr Z Lu Entropia Capital SA Mr C Zheng United Chartering Ltd Mr P Smith OCP SA
Mrs W El Ansari
The following individuals have applied for membership of an existing member company:
Company Individual BHP Billiton Freight Singapore Pte Ltd Mr D Hook The Air Charter Association Ltd Mr T Farthing Mr I Morrow Mr L Papantoniou Anglo American Marketing Ltd Mr A Clark BHP Billiton Freight Singapore Pte Ltd Mrs J Brusset Chinsay AB Mr A Faneco NYK Line
Mrs M Kawamoto Mr E Matsuoko The Air Charter Association Ltd Mr A Naran
The following individual has applied for retired membership:
Mr P F Miller
Any comments should be passed to Karen Karanicholas by 4 December 2019.
Please note last week’s applicants are also included in the above list and will be circulated in this week’s Baltic Briefing.
- Trade outlook deterioration continues ‘unabated’
When words like ‘deterioration’, ‘uncertainty’ and ‘weak’ are used in connection with trade and investment flows by a body as eminent as the OECD, it’s a cause of great concern for shipping.
In his analysis of the organisation’s latest Economic Outlook, chief economist Laurence Boone used all three words within her opening thoughts, proving the depth of the trade quagmire that the global economy is stuck in.
The OECD now puts global GDP growth prospects at 2.9% for 2019 and project them to remain around 3% for 2020-21, down from the 3.5% rate projected a year ago and the weakest since the global financial crisis. Global trade volume growth of goods and services is estimated to have slowed to 1% this year – its lowest rate since 2009.
Short-term country prospects do, however, vary with the importance of trade for each economy. For example, GDP growth in the US is expected to slow to 2% by 2021, while growth in Japan and the euro area is expected to be around 0.7 and 1.2% respectively. China’s growth will continue to creep down, to around 5.5% by 2021. Other emerging market economies are expected to recover only modestly, amid imbalances in many of them. “Overall,” points out Ms Boone, “growth rates are below potential.”
This is partly blamed on an unbalanced mix of monetary and fiscal policies; however Ms Boone’s biggest concern is that the deterioration of the outlook “continues unabated”, reflecting unaddressed structural changes more than any cyclical shock.
Two ongoing structural changes are singled out by the OECD: climate change and digitalisation. Add to this, trade and geopolitics that are moving away from multilateralism. “It would be a policy mistake to consider these shifts as temporary factors that can be addressed with monetary or fiscal policy: they are structural,” says Ms Boone. “In the absence of clear policy directions on these four topics, uncertainty will continue to loom high, damaging growth prospects.”
The OECD also raises concern that growth could be weaker still if downside risks materialise or interact. These risks include further escalation of trade and cross-border investment policy restrictions, continued uncertainty about Brexit, a failure of policy stimulus to prevent a sharper slowdown in China, financial vulnerabilities from the tensions between slowing growth, high corporate debt and deteriorating credit quality, and a persistent upward spike in oil prices. There is more than a passing concern that the cyclical downturn is “becoming entrenched”.
The current stabilisation at low levels of economic growth, inflation and interest rates does not warrant policy complacency,” it said. “The situation remains inherently fragile, and structural challenges – digitalisation, trade, climate change, persistent inequalities – are daunting.
AP Moller-Maersk’s third quarter outlook mirrors the negativity. Last week, it cut its forecast for global container demand to 1%-2% in 2019 from 1%-3% after a relatively weak third quarter. What makes this all the more significant is that the third quarter is usually the busiest of the year due to restocking for the Christmas season.
Speaking to the Financial Times about its latest report, chief executive Soren Skou said: “What has happened now is that the trade tensions have really started to impact business sentiment. Business leaders across the world are worried, they’re less confident about the future. Either the consumer wins and things will be better, or the businesses will be right and we’re heading for low growth or even a recession in the next few years.”
The OECD also blames trade policy tensions for some of the sluggishness and agrees with Mr Skou that the greatest problems are the affects those trade tensions are having on confidence and investment. The OECD also notes that reallocation of activities across countries and adjustment to supply chains as a result of persisting trade tensions is both “a drag on demand and a source of weaker medium-term growth by reducing productivity and incentives to invest”.
The organisation advises that strengthening international co-operation is crucial, particularly to find agreement on transparent and fair international taxation and trade rules. For its part, the OECD is also looking at how dedicated public investment funds can be geared to help meet long-term objectives such as ensuring society benefits fully from advances in digital technology or facilitating transition to a low carbon future.
The fact that trade and investment are structurally changing with digitalisation, the rise of services and geopolitical risks, could also be seen as an opportunity rather than a challenge.
The OECD advises a “clear policy direction for transitioning towards sustainable growth amidst digitalisation and climate challenges”, with governments focusing on long-term gains. For example, the creation of national investment funds, focused on investing in the future, “could help governments design investment plans to address market failures and take account of positive externalities for society as a whole”.
In a second recommendation, the OECD advises that greater trade policy predictability and transparency could go a long way towards reducing uncertainty and reviving growth.
Thirdly, fiscal and monetary policies can be “better activated” through co-ordinated efforts.
Speaking in Beijing where he was meeting Chinese Premier Li Keqiang and other heads of international organisations, OECD secretary-general Angel Gurría neatly summed up the current sentiment when he said:
The alarm bells are ringing loud and clear.
He continued: “Unless governments take decisive action to help boost investment, adapt their economies to the challenges of our time and build an open, fair and rules-based trading system, we are heading for a long-term future of low growth and declining living standards.”
- Christmas in Athens
Members are invited by the Chairman of the Baltic Exchange, Denis Petropoulos, to join him at the Baltic’s annual Athens Christmas Reception at the Hilton Galaxy Rooftop Bar from 6 pm on 5 December.
We look forward to welcoming members and invited guests from across the Greek market for cocktails and canapés to celebrate the start of the Christmas Season.
Those interested in attending are invited to register on our event page here.
- Baltic Carol Service
The Baltic Exchange is delighted to invite members to join us at the Baltic Exchange on 17 December for the annual Baltic Christmas Carol Service. Mince pies and mulled wine will be served from 3.30pm with carols from the City Singers Aldgate starting at 4pm.
- Michael Brownlie
Members will learn with regret that Michael Brownlie passed away recently. He was first elected a member of the Baltic Exchange in 1969. He was a Principal for Eastern Chartering between 1977-91 and in 1991 was elected a member for Tillships.
His funeral will be held on Thursday 12 December 2019 at 1130 at The City of London Crematorium, Aldersbrook Road, Manor Park, London E12 5DQ.
Anyone wishing to attend please could they contact either Ben or Dominic Brownlie on +44 20 8989 1921.
The family requests no flowers, but donations would be much appreciated to Macmillan or Marie Curie.