- Baltic Carol Service
Members and friends were welcomed at the Baltic on 17 December for the Baltic Exchange and Aldgate Ward Club Carol Service.
The service was led by Reverend Nick Mottershead, with the City Singers Choir providing attendees with vocals support for the carols. Readings were made by Current Baltic Chairman, Denis Petropoulos, and former Chairman, Duncan Dunn, as well as Alderman Sue Langley, Patron, Aldgate Ward Club and Baltic CEO, Mark Jackson.
Following the service, attendees came together in the Baltic Bar for mulled wine and mince pies.
Pictures from the service can be viewed on the Baltic Exchange Flickr account.
- Baltic in Athens this Christmas
The Baltic Exchange was in Athens on 5 December for its annual Christmas Reception.
Taking place at the Hilton Galaxy Rooftop Bar, Baltic Chairman, Denis Petropoulos, was in attendance to meet with Members and invited guests from across the greek market over cocktails and canapés to celebrate the start of the Christmas festivities.
Pictures from the event are available on the Baltic Exchange Flickr account.
- Baltic publishing dates during the Christmas period
Baltic Exchange Indices, BFA & BOA Forward Curves and Volume Publication during Christmas and New Year period are as follows:
24 December 2019 Final publishing day for all spot Indices. Rollover for forward curves (current month will be January) 25 December 2019 No Indices or curves published 26 December 2019 No Indices or curves published 27 December 2019 Only BOA, BFA (dry & wet) published 30 December 2019 Only BOA, BFA (dry & wet) published 31 December 2019 Only BOA, BFA (dry & wet) published 1 January 2020 No Indices or curves published 2 January 2020 All Indices and forward curves published, including volumes and weekly assessments. All Tanker spot Indices and TCE’s will be assessed basis 2020 Worldscale flat rates.
Any questions or comments should be directed to firstname.lastname@example.org
- Overview of Baltic’s shipping emissions initiative
Details of the Baltic Exchange’s and data platform Geospock’s shipping emissions project were discussed at an open forum at the Baltic last week. Attended by a range of owners, charterers and brokers, the forum was an opportunity to share views on the initiative.
Opening the session Baltic Exchange Chief Executive Mark Jackson said:
“Our vision is to combine the unique strengths of the Baltic and Geospock to deliver a single source of truth for the shipping industry. We are seeking to create a accredited source of data that business can use to enhance their own data projects. We want to build the foundations of a platform which allows maritime business to base their own projects on a common data set. By the enabling the industry to start from and agreed accredited base layer of data it will enable then to make intelligence-led decisions quicker and demonstrate their unique selling point. We believe that the Baltic Exchange can add credibility to this platform through our pedigree of verifying data which competing parties can trust. Our governance model, our history, our people and experience can be brought to bear to enable this project to become a resource for the industry, driving efficiencies and reducing our impact on the environment.”
Click here to download an overview of the Geospock system.
- FFABA Tanker Freight Risk Forum
In a year where markets were resolutely focused on the long-anticipated IMO 2020 regulation, 2019 turned out to be one of the most volatile years on record for tanker freight. The extraordinary run of major incidents and vacillating geopolitical relations sent shock waves through the market causing the Baltic’s flagship TD3C route to peak at an unprecedented $300,000 per day in Q3.
Alongside increased safety risks and decision complexity for owners trading through the Gulf, freight risk exposure became an increasingly significant concern for commodity markets as traders ploughed volume into freight derivatives in a bid to mitigate risk and capitalise on rate volatility.
The Tanker Freight Risk Forum, hosted by the Baltic Exchange, supported by the FFA Brokers Association, is the annual market gathering for freight and oil traders globally. Taking place during IP week, attendees will hear from leading commentators including John Kemp from Reuters and Tim Smith from MSI as they share insights on tanker demand, supply and the outlook for both markets in 2020.
Alongside an update from the Baltic, traders and brokers will openly discuss market benchmark development alongside evolving trade patterns and other major industry issues impacting trade in both physical and FFA markets.
13:00 – Lunch Registration
14:00 – Market Developments and the Baltic Exchange: Mark Jackson, Chief Executive Officer, The Baltic Exchange
14:20 – Oil Markets: Fundamentals and outlook by John Kemp, Senior Market Analyst, Commodities and Energy, Reuters News
15:00 – Tanker Market Keynote: Tim Smith, Senior Analyst, Maritime -Maritime Strategies International
15:35 – Coffee break
15:50 – Market Issues Panel Session
- Chair: Adrian Wooldridge;Chair – Baltic Exchange Advisory Council – Wet
- Tom Stockton; Chair – FFA Brokers Association and Clarkson Platou Futures
- Vivek Srivastava; Shipping Industry Economist & Strategist
- Tim Smith, Senior Analyst; Maritime Strategies International
- Mark Jackson; CEO – Baltic Exchange
- James Pendered; Senior Freight Market Reporter – Baltic Exchange
16:30 – Drinks reception at The Clarence, Dover Street
Registration and further details here.
- Trading places for 2020
In the sea of 2020 predictions, Saxo Bank’s Outrageous Predictions sail their own very unique course. For nearly 20 years the Danish investment bank has had its experts take a hard look at the coming year to “create the very conversation which is difficult because today’s world has become too partisan and intolerant”, according to the bank’s chief investment officer, Steen Jakobsen.
For 2020, the overriding theme from its experts is disruption. “The year could represent one big pendulum swing to opposites in politics, monetary and fiscal policy and, not least, the environment,” says Mr Jakobsen.
Saxo describes the current paradigm as “simply at the end of the road”, because extending the last decade’s trend into the future would mean “a society at war with itself, markets replaced by government only, monopolies as the only business model and an utterly partisan and atomised public forum for news and information — where lies, deceit and spin mean there is no ability to agree on basic truths and best practices”.
Of its ten outrageous predictions for 2020, three stand out for their relevance to world trade, commodities and shipping. Head of equity strategy, Peter Garnry opens his prediction with the bold assertion that in energy, green is not the new black.
He notes that the traditional fossil fuel industry peaked in 2014 and has since been transformed by two “powerful forces”. The first was the combination of the rapid arrival of US shale gas, globalised LNG supply chains and the advent of US shale oil, which saw the US become the world’s largest oil and petroleum liquids producer.
The second has been the climate change movement and a concomitant surge in demand for renewable energy. These factors have led to lower equity valuations for ‘black energy’ companies, putting them at a 23% discount to clean energy companies.
“In 2020, we see the tables turning for the investment outlook as OPEC extends production cuts, unprofitable US shale outfits slow output growth and demand rises from Asia once again,” predicts Mr Garnry. The surprising winner of this will be the oil and gas industry, while the clean energy industry will suffer a “wake-up call”.
America First Tax
John Hardy’s outrageous prediction lands a punch on President Trump and his trade policies. Serving as the head of FX strategy at Saxo, Mr Hardy forecasts the enforcement of an ‘America First Tax’ to reduce the US’ trade deficit.
While 2020 might start with reasonable stability on the trade policy front – China and the Trump administration have already reached a temporary agreement on tariffs – this is unlikely to last long in Mr Hardy’s eyes. He sees the US economy struggling for air early in 2020 as US trade deficits with China stagnate and Chinese purchases of agricultural products are maxed out.
“Eyeing polls showing a resounding defeat in the 2020 US Presidential election, Trump quickly grows restive and his administration drums up a new approach in a last-ditch effort to steal back the protectionist narrative: the America First Tax,” foresees Mr Hardy.
The fictious tax sees a complete reconstruction of the US corporate tax schedule to favour US-based production under the claimed principles of ‘fair and free trade’. All existing tariffs will be cancelled to be replaced by a flat value-added tax of 25% on all gross revenues in the US market that are sourced from foreign production.
“This brings stinging protests from trading partners for what is really just old tariffs in new clothes, but the administration counters that foreign companies are welcome to shift their production to the US to avoid the tax,” says Mr Hardy. “Furthermore, the administration claims that the ‘fair and free’ portion of the new America First Tax is that the 20% rate is indexed to the size of the US trade deficit as a % of GDP and would fall to 5% in the event the US moves into a trade surplus.” An immediate consequence of the new tax would be a sudden scramble to re-site production to the US – and a direct hit on global trade with the US.
Demise of the dollar
Singapore-based Kay Van-Petersen, Saxo’s global macro strategist, used his prediction to focus on Asia’s desire to shift away from US dollar dependence. He foresees the launch of a new reserve currency in Asia in the form of an AIIB-backed digital reserve currency that takes the US dollar index down by 20%.
He explains that the US dollar’s rank as the world’s chief reserve currency has long been a double-edged sword, both for the US, and for the rising star of China. It’s now outliving its usefulness as a reserve currency for the region.
“To confront a deepening trade rivalry and vulnerabilities from rising US threats to weaponise the US dollar and its control of global finances, the Asian Infrastructure Investment Bank creates a new reserve asset called the Asian Drawing Right, or ADR, with 1 ADR equivalent to 2 US dollars, making the ADR the world’s largest currency unit,” Mr Van-Petersen predicts.
The new currency will be powered by blockchain technology, with regional central bank reserves injected with the reserve currency. It wouldn’t be a publicly tradable currency, but instead represents a basket of currencies and gold, with the Chinese renminbi heavily prominent in the mix and the US dollar weighted at below 20%.
“The move is clearly aimed at de-dollarising regional trade,” says Mr Van-Petersen. The upshot of the arrival of the new currency is that local economies multilaterally agree to begin conducting all trade in the region in ADRs only, with major oil exporters Russia and the OPEC nations happy to sign up due to their growing reliance on the Asian market. “Export revenues received in ADR can be converted back into local currencies by central banks and a deepening market of ADR-based bonds and other financial instruments, also secured on the blockchain, deepens the liquidity and trust in ADRs as a reliable asset,” he adds.
This scenario has a grave impact on the US dollar, which weakens by 20% against the ADR within months in 2020, and hits the dollar-dominated shipping industry hard.
- Member update: 18 December
The following company has applied for corporate membership:
Company Individual Anglo-Eastern Ship Management Ltd
Captain H Chopra Mr G Haysom Captain A Hazari
Captain D Swarup Columbia Shipmanagement Limited
Mr J Brack Mr D Chrysostomou
Mr L Drumm Mr A Dutton Mr A Hadjipetrou Mr X Kyriacou Mr R Oggel Mr N Papados Mr C Sommerhage FFM Shipping Services SAGL
Mr G Borgia Mr F Farolfi Morelli
Fleet Management Limited
Mr S Chandra Captain V R Grewal Captain V S Gusain
The following individuals have applied for membership of an existing member company:
Company Individual Chinsay AB
Ms L Cirkova Ms R Westberg Glencore International AG Mr I Moore Howe Robinson & Co Ltd Mr J A d’Ancona MJLF & Associates Mr J Stichter Pan Ocean Co Ltd
Mr S J Jang Mrs A Park Petroineos Trading Limited
Mr R J March Mr C Ward The Air Charter Association Ltd Mr B Davis Thurlestone Shipping Ltd
Mr E Hoe Mr A I Loftesnes
The following individual has applied Retired Membership:
Mr J A Duggin
Any comments should be passed to Karen Karanicholas by 25 December 2019.
- Baltic Academy: Shipping Economics & Investment
Understand the micro-economic structure of the shipping markets by attending the Baltic Exchange’s Shipping Economics & Investment course (London, 13-14 January). The two-day programme looks at the fundamentals of shipping investment including cash flow projection and analysis, capital budgeting techniques, capital structure and cost of capital in shipping projects, investment management of shipping projects, asset allocation and shipping investment strategies.
The course is led by Professor Michael Tamvakis and Professor Amir Alizadeh, both of Cass Business School, City University London.
Click here for full details.
About Baltic Exchange Training
The Baltic Exchange runs a series of professional training courses through its Academy. These take place in key shipping centres and are designed to help shipping, finance and commodity executives build on their knowledge of the maritime markets. The courses are led by experts and deliver a high-level education, combining theory with real-life practical examples. By attending these courses, participants will learn skills which they can use in their day to day business.
Launched in 2005, each course involves a mixture of classroom teaching, practical exercises, group discussion and case study analysis. Comprehensive study notes are provided, together with a certificate of attendance.
- Through stormy seas
Each day seafarers arrive in ports along London’s River Thames. They are far from home, rarely have English as a first language and really appreciate a chance to spend time away from their ships.
The Queen Victoria Seamen’s Rest (QVSR) provides a welcoming environment where seafarers can catch up with family and friends through free internet, relax in comfort with music, games tables, and TV entertainment, buy refreshments and souvenirs, and socialise with other crew members. Open 24 hours a day 7 days a week, QVSR also has en-suite accommodation available for active and retired seafarers.
The 176-year-old Rest, which works in partnership with the church and maritime charities Mission to Seafarers, the German Seaman’s Mission, and the Sailors Society, is looking to the future with optimism, but not too long ago, that future looked to be in question.
Alex Campbell, joined QVSR in 2003 with the brief to knock down the Rest and build a new one. What became clear quite quickly to Alex was that the ambition of the task was, as he puts it, “more fantasy than fiction”:
“I soon discovered that the outline plans for the new Rest had not been agreed with the local authority, the plans did not have the support of the local authority and they had not even been shown to the planning department, never mind agreed.”
There was no immediate prospect of a new building and the current one was becoming more outdated. Accommodation had changed little since the 1970s with up to 20 men still sharing bathroom facilities. There was a need for drastic change, and it needed to happen quickly.
Multiple challenges presented themselves. Alex and the Board needed to address what QVSR was in the 21st century, who it served and who it should be serving, which led to questions as to whether the Rest should move further East.
There was also external challenges. The local and national government didn’t identify the single male audience QVSR served as a demographic which further accommodation needed to be developed for. This was all as the Rest’s maritime partners were either reducing funding of withdrawing financial support altogether.
After much discussion, it was decided that QVSR would stay in Poplar. It was at this stage that Alex went to the Board with a radical proposal, that they would hand back the grants which limited the control they had over their destiny and would look to raise the £5 million needed to renovate the Rest.
“It was my conviction that we should ‘step out in faith’, believing that if we have a role to play in the present age, we would be successful in our ambitions.”
Alex’s leap of faith would be named the ‘Queen Vic Refit’. Through careful planning, and the kind contributions of donors, phase one of the refit commenced in early 2009 with the first 16 en-suite rooms finished and officially opened by the Rest’s patron, HRH Princess Alexandra, in December of the same year.
“The QVSR staff and fundraisers told the story of the Rest and the vision for what new facilities would bring extremely well which supported further donation and subsequent development.”
Alongside the development, Alex and the board sought to reaffirm the Rest’s commitment to the maritime community.
“The opportunity arose to take over the responsibility of managing the seafarers’ centres on the River Thames at Tilbury and DP World London Gateway. I invited the board to grasp the opportunity, diversifying and widening the scope of the charity’s work, while staying firmly with the charitable aims and objectives.”
The Board agreed to Alex’s proposal giving QVSR an even more meaningful part to play in the maritime world providing accommodation and services to active, oversees and retired seafarers’ centres on the River Thames.
With major expansion plans at both Tilbury and DP World the Thames is becoming an increasingly busy waterway. QVSR is very much part of this, as it strives to continue to meet the needs of seafarers visiting London every day.
“From being a maritime charity that many viewed as ‘being of the past’ we are now seen as an important part of the future and a key component of the maritime welfare sector here in the UK.”
The full 175-year story of the Queen Victoria Seamen’s Rest has been chronicled in the limited edition book ‘Saving Jack: The Story of the Seamen’s Mission of the Methodist Church, The Queen Victoria Seamen’s Rest’. To find out more about QVSR and how you can support its mission, visit: www.qvsr.org.uk