- 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
- 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.
Contact email@example.com to book your place.
- 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. firstname.lastname@example.org
- Baltic Member Update
The following companies have applied for Corporate Membership:
Company Individual CargoMetrics Technologies LLC Mr J Scully
Mr S Borgerson
Mr R Hoogerwerf
Ms K Bohling
EP Resources AG Mr M J L Brock
Mr A Sass
Seaway Consult Ltd Mr R H Goodall
The following individuals have applied for membership of an existing member company:
Mr R Mumford The Air Charter Association Ltd Mr L Needham The Air Charter Association Ltd Mr A Baker The Air Charter Association Ltd Mr T Yeung The Air Charter Association Ltd Ms P Lim The Air Charter Association Ltd Mr S J Thompson Affinity (Shipping) LLP Mr Z Z Wong JERA Global Markets Pte Ltd Mr A Lim McQuilling Partners Inc Mr M Lin Tradewinds Mr U Parikh Avra International Pte Ltd Mr T Chiu U-Ming Marine Transport Corporation
Any comments should be passed to Karen Karanicholas by 23 October 2019.
- YBA Hong Kong
The Hong Kong Maritime Museum was the setting for the Young Baltic Association (YBA) gathering in Hong Kong in October. Attended by shipping professionals aged 35 and under, the event was co-hosted by Seamaster and the Hong Kong Shipowner Association, and supported the Young Professionals in Shipping Network .
The YBA is just one of many Baltic Exchange societies and clubs which bring Baltic Exchange members together in shipping hubs around the world.
- Short term strength for Oz commodities
Volatility in the global commodity markets is not expected to unduly rattle Australia’s commodity outlook through 2020, but the 2021 picture is less rosy, according to government research.
A recent report from Australia’s Department of Industry, Innovation and Science maintains a confident outlook for the coming year. Resources and Energy Quarterly, published at the end of September, anticipates that Australian resource exports will hold up in 2019-20, projecting A$282 billion in exports over the forecast period.
But with a less stable world industrial production outlook, the demand forecast for 2021 is not as clear-cut for commodity-dependent countries like Australia. According to the report, export earnings for 2020–21 may only reach $258 billion with the decline reflecting the impact of the steady return of Brazilian iron ore production to normal, following the fallout from the Brumadinho mine tailings dam collapse.
David Turvey, acting division head of the Department, noted that global cutbacks in manufacturing production are already flowing through into commodity markets and that the importance of China’s burgeoning middle class means that any further decline in Chinese economic growth could have even more significant effects on global supply chains for a range of technology and other products.
“Thus far, problems within the global economy remain somewhat quarantined,” he said. “The usual catalysts for global downturns — miscalculations with interest rates, financial freeze-ups, abrupt collapses in investment — have not yet materialised.”
“But uncertainty is growing. Central banks and governments still have firepower to deploy to prevent a major slowdown, though perhaps less ammunition than was available 10 years ago.”
That said, Mr Turvey noted that more established commodities, such as steel and aluminium, could actually benefit from some carefully chosen Chinese stimulus measures.
Encouragingly, data for the report suggests that mining investment in Australia has turned a corner. “For the first time in six years, mining companies are planning to increase their annual spend on building new mines/wells and on expanding and replacing their fleet of plant, machinery and equipment,” said the report.
Provisional indications support the likelihood that the first quarter of 2019 could well have marked the low point of the mining investment cycle. Expectations for capital expenditure suggest a rise of around 14% in 2019-20, to just over $38 billion. The report sees investment stemming from the recent rebound in bulk commodity prices and new prospects for lithium and other critical minerals.
While Australia’s iron ore export volumes slipped 0.2% year-on-year in the second quarter 2019 to 219 million tonnes – hit by the disruption caused by Cyclone Veronica – production recovered in the third quarter as ports in the Pilbara region returned to regular operation.
Iron ore export volumes are forecast to increase by an annual average of 2.9% from 2018-19 to 2020-21, rising from 820 million tonnes to 869 million tonnes. “Higher volumes should be underpinned by Fortescue’s Iron Bridge project, and also by development of three large iron ore projects in the Pilbara region,” said the report. These large projects are Fortescue’s Eliwana, expected to commence in December 2020 and produce 30 million tonnes per year; Rio Tinto’s Koodaideri, expected to start in late 2021 and produce 43 million tonnes per year; and BHP’s South Flank, set to produce 80 million tonnes annually and replace existing production from the Yandi operations from 2021.
Australia’s coal export volumes are forecast to grow from 210 million tonnes in 2018-19 to 214 million tonnes in 2020-21, thanks to modest production growth from new capacity and expansions, a recovery from recent disruptions, and productivity improvements.
Meanwhile, the aluminium forecast is expected to remain stable at 1.6 million tonnes for 2020-21. This builds on a strong year in 2018-19, driven largely by increased exports to the US – up 326% to 281,000 tonnes – due to the tariff-exempt status that was granted to Australia.
2018-19 bauxite volumes that were supported by environmental priorities in China led to a 12%, or near 33 million tonne, increase in exports to China. However, Guinea threatens to dilute this strength. In June 2019, Guinea accounted for 52% of China’s total bauxite imports whereas Australia only accounted for 32% of China’s total bauxite imports. The report notes it is “likely” that the Malaysian Government will relax its ban on bauxite mining in Pahang next year, an area that accounts for 70% of Malaysia’s bauxite production. “The decision is expected to add pressure to Australian bauxite exporters, as another major bauxite supplier enters the Chinese bauxite market,” said the report.
Rare earth focus
While Australia’s rare earth metal volumes are a far cry from its heavy iron ore dominance, it’s a mining and export area that it is looking to develop in the coming years. Australia is looking to challenge China’s leading edge and is advancing separate talks with the US, Japan and South Korea over the development of local rare earths mining projects outside of China.
Rare earths are a group of 17 elements needed in components for missile systems to consumer electronics and have been highlighted as a potential weapon in the US-China trade tensions.
According to the US Geological Survey, China mined 180,000 tonnes in 2018, compared with Australia’s 20,000 tonnes.
Australian Trade and Investment Commission has highlighted the potential for Australia to increase exports of this group of minerals, as well as critical minerals such as cobalt, magnesium and lithium.
Minerals Council of Australia chief executive Tania Constable commented that world advances in computing, manufacturing, energy and transport are being made possible by critical minerals found in Australia.
“With critical minerals essential to global economic development but geographically concentrated, Australia is well placed to extract and produce these high performance minerals,” she said. “Critical minerals are already a multi-billion dollar industry in Australia, with many new projects at advanced stages of development that will soon be ready to support the world’s growing needs.”
The next Baltic Exchange Advanced Freight Modelling & Trading course will take place 11-12 March 2020 in London. Click here for more information.
- Baltic table tennis tournament
The Baltic Exchange held its very first table tennis tournament at the Baltic Exchange bar on 3 October. 16 contestants from Berge Bulk, Clarksons, Hartland, Mavega, SGX, SSY, Ultrabulk and the Baltic Exchange played in four groups.
Nils Ole Andersen and Luca Carruba from Ultrabulk flew in from Copenhagen for this tournament and made it through to the top four. Nils, well-known for his table tennis skills, edged out Julius Klutmann from Clarksons London office in a thrilling final and won the gold medal. Carl Fitsell from SSY’s London office was awarded the Baltic wooden spoon.
The Baltic Exchange hopes to organise more tournaments in the future.
Please contact Yanjie Shi at email@example.com for further details.