Fortune Marine (I) Services - Shipping News As On 25.04.2017

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BDI falls to 1154, down 16 points
Shipping News Tuesday, 25/04/2017
Today, Tuesday, April 25 2017, the BDI decreased by 16 points, reaching 1154 points.
The index is based on a daily survey of agents all over the world. BDI hit a temporary peak on May 20, 2008, when the index hit
11,793. The lowest level ever reached was on Wednesday the 10th of February 2016, when the index dropped to 290 points.
Bunker index as on 25/04/2017, Tuesday:

Port IFO 380 IFO 180 MGO Date
Singapore 306.50 - 333.50 - 482.50 - 2017-04-25

1.50 6.50 1.50
Rotterdam 279.00 - 307.50 - 442.50 - 2017-04-25

3.50 2.00 6.00
Fujairah 302.50 - 370.00 550.00 - 2017-04-25

2.50 0.00 2.50
Busan 330.00 - 345.00 - 510.00 - 2017-04-25

9.00 12.00 17.50
VLCC ton-mile surges to record high during first quarter of 2017 says shipbroker
Tanker owners active on spot markets will have been among the most fortituous ones, as, according to shipbroker, VLCC spot ton-
miles surged to a record high during 1Q17 as rising Asian crude imports amid stable Middle East demand supported a greater
number of longer-haul voyages to Asia from West Africa and Latin America. The present VLCC rally -- which has seen earnings rise
into the mid-$30,000/day range -- is partly a function of the Q1 demand surge on slower reappearances of units on Middle East
position lists and partly a function of sustained demand for West African crude by Asian buyers sourcing VLCC tonnage as Middle
East cargoes compete more aggressively for units.
In its latest weekly report, shipbroker noted that this underscores our belief that the OPEC agreement to cut oil production during
1H17 offers a positive impact to VLCC demand trends and cushioning cyclical lows. Structurally, we retain our view that the bottom
of the cycle will occur during 2017 with a slow recovery materializing during 2018 before a healthier recovery prevails from 2019 as
deliveries of the current orderbook subside and phase-outs accelerate in response to the regulatory environment. We are
concerned, however, with the extent of recent newbuilding contracting and note that if low newbuilding prices continue to entice
ordering at the pace observed in recent weeks, we would likely see an observable recovery delayed at least into 2019.
Meanwhile, the shipbroker noted that Suezmax rates were cushioned during Q1 as strong demand trends in the USG/CBS and
Middle East markets and delay issues in the Caribbean and Turkish straits constrained overall tonnage availability. Nevertheless, with
delay issues having subsided, demand trends in West Africa are proving highly unfavourable to Suezmaxes (as more of the regions
supply is being serviced by VLCCs), and net fleet growth for the year projected at nearly 10%, we remain pessimistic on near- and
intermediate-term fundamentals. As with VLCCs, we expect that 2017 will represent a low in the present cycle and note that a
recovery could materialize by 2H18 as 2018 net fleet growth is projected at just 0.59% with the bulk of the years deliveries during
H1 and a likely surge in phase-outs expected during H2. Additionally, we note that investment appetite in the size class has been
warded off by the large orderbook (representing 17% of the current fleet), raising less of a threat for a longer-term recovery than
with VLCCs.
Finally, according to shipbroker, Aframaxes faced lower competition from Suezmaxes during Q1 than expected which together with
delay issues in the Caribbean and Turkish straits helped to keep rates relatively elevated. Volatile exports from Libya remain a
marked challenge and we expect that Suezmax competition will rise during the coming months as the larger class fleet expands well
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out of step with demand, applying negative pressure on rates and earnings. Limited fleet growth in the Aframax and Suezmax classes
during 2018 should help to support a recover during 2H18, the shipbroker concluded.
Meanwhile, in the clean tanker market segment, shipbroker noted that the USG MR market observed an accelerating of rate losses
this week as the reality of last weeks strong buildup of available tonnage bit. Though availability levels declined this week as a
resurgence of rates in the UKC market is drawing units freeing on the USAC and this weeks USG fixture tally rose, rates remained
disjointed from levels dictated by fundamentals. A total of 34 fixtures were reported this week, a 17% w/w gain. Of these, just three
were bound for points in Europe (-2, w/w), 19 were bound for points in Latin America or the Caribbean (-1, w/w) and the remainder
were yet to be determined or bound for alternative destinations. Rates on the USG-UKC route shed 50 points to conclude at a five-
week low of ws90 while the USG-CBS route shed $250k to conclude at $375k lump sum. Availability remains high at the close of the
week with 53 units populating positions through the coming two weeks; although this marks a 12% w/w decline, the volume remains
high against a recent low of 25 units and a 52-week average of 41 units. On this basis we expect that rates will continue to correct
during the start of the upcoming week before finding a floor around mid-week as demand prospects remain strong and isolated
arbitrage opportunities reemerged this week on the back of the declining freight component, which could help to enable trades
beneficial to fundamentals, the shipbroker concluded.
BIMCO: Tanker owners have their work cut out handling the supply side in 2017
Demand Oil tankers experienced a tough start to 2017 as freight rates for all crude oil and oil product tankers continued their
decline following the brief lift at year-end. For one, VLCCs may not yet have bottomed out. By 7 April 2017, average earnings stood
at USD 18,853 per day, down from USD 63,284 per day on 16 December 2016. The demand situation for both crude oil tankers and
oil product tankers in 2017 and 2018 is closely connected to the destiny of worldwide oil stocks. So far, we have seen supply cuts
from OPEC, from their highest supply level ever at 33.9 mb/d in October 2016.
However, we have also seen an increase of supply from the US. This has lifted US crude oil stocks to their highest level ever, and
global stocks have sidestepped. BIMCO believes that we must wait until the second half of 2017, when global oil demand picks up, to
see an eventual drop in global oil stocks (crude oil and oil products). Focusing on the oil product tankers only, the month of March
proved to be a relief. Handysize tanker earnings even surpassed that of all crude oil tankers, reaching USD 23,984 per day on 24
March. On that day, suezmax crude oil tankers reached only USD 22,700 per day.
Since the removal of
restrictions on US crude oil
exports in December 2015,
this has been a developing
story. It has also been an
interesting one, as shipping
has certainly benefited
strongly and quickly. Not so
much in sheer volumes, as
US crude oil exports went
from 465,000 barrels per day
(b/d) to 520,000 b/d
(+11.8%), but exports started
to find destinations globally
and not just cross-border
into Canada. In 2015, 92% of
US exports went north; in
2016 that share was just
61%. The other destinations
that we find in the top five
include the Netherlands, Italy
and China. South Korea,
Japan and the UK are also
amongst the importers all
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served by tankers. US crude oil imports have also grown, benefiting crude oil tankers even more.
Additionally, US oil product exports keep rising, going both short-haul to Mexico, Caribs and South America and long-haul to Japan,
China and India.
Supply
As discussed in our previous tanker shipping market overview and outlook, the total amount of demolished tanker capacity was very
low in 2016. Owners appeared more focused on taking delivery of new ships during this time. This has now changed at least to
some extent. In 2016, 2.6 million DWT was sold for demolition. By end-March 2017, 0.9 million had left the fleet for recycling at
shipbreaking facilities. Although slightly busier than 2016, it has been a slow start to what BIMCO expects will be a busy year for
tanker demolition. As we expect the freight market and asset values to have yet another year under pressure. Demolitions are
forecast to rise fourfold to a total level of 11.5 million DWT, out of which 9 million DWT is expected to be taken out of the crude oil
tanker fleet.
BIMCO forecasts crude oil tanker deliveries in 2017 to be on a par with 2016, which saw 23 million DWT of new shipping capacity.
This highlights the need to handle the supply side, as demand growth will not support the market to the extent it did in 2016. The
year to date has seen 9.8 million DWT being delivered with just 0.7 million DWT of crude oil tanker capacity being demolished
including one VLCC.
In terms of new orders, 2017 has seen 12 VLCCs and 8 LR2s amongst others. There have been 38 new orders in total for 5.7 million
DWT, including 16 product tankers with a total capacity of 1.3 million DWT. The 12 VLCCs and other orders resulted in a rise in the
crude oil tanker order book during the past two months. This is quite amazing considering the present challenges in the market. As
touched upon in a regular BIMCO news piece, a record 12 VLCCs were delivered in January. This inflow brought the VLCC fleet above
700 ships. For oil product tankers, 2016 was a six-year high for deliveries, with supply growing by 6.1%. 2017 has seen the fleet grow
by 1.3% already, as it aims for 3.2% for the full year. BIMCO expects demolition of oil product tanker tonnage to be 34 times higher
than 2016, at 3 million DWT.
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Outlook
As cargo volumes are not expected to grow that much in 2017, the increase in demand (if any) must come from longer sailing
distances, and changes to the volumes from one country to the next. China rules the crude oil tanker market, as in many other
shipping markets, having been solely responsible for the incremental crude oil tonne mile demand growth since 2010.
The country is set to do it again in 2017. What we have seen so far in terms of Chinese car sales, is supporting this. Though the
subsidy has been reduced in 2017, the numbers are holding up. The US could spoil the party, however. As discussed above, US
imports and domestic production have both contributed to rising crude oil stocks. A continuance of that could prove difficult to
uphold. 2016 was an abrupt break of trend that has seen US seaborne crude oil imports drop consistently since their peak in 2005.
2017 is proving to be a year of change for oil tankers, as was indicated during 2016 with freight rates coming down. After two years
of solid demand growth, 2017 is a year of tepid demand growth around 02%. As fleet expansion is also slowing down, though still at
a higher growth rate than demand, the shipowners have their work cut out. Managing the supply side is essential to ease the pain
and avoid a marked dip in the fundamental balance that would take years to overcome.
Fiona Pounds: Valid tender of Notice of Readiness

In the recent English High Court case of MV Arundel Castle1, the Judge ruled that a vessel, that could not immediately proceed to
berth due to congestion and that was directed to anchor outside port limits by the port authority, was held not to be an arrived ship
for the purposes of tendering Notice of Readiness (NOR).
Clause 15 of the fixture recap contained the following wording:
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[Notice of readiness] to be tendered at both ends even by cable/telex/telefax on vessels arrival at load/disch ports within port
limits. The [notice of readiness] not to be tendered before commencement of laydays.
In addition, the Gencon 94 standard form was incorporated into the charter as follows:
Otherwise Gencon 94 printed form charterparty with logical amendments on [basis] the terms as per fixture recap.
Clause 6(c) of Gencon 94 includes the following under the sub-heading Commencement of laytime (loading and discharging):
If the loading/discharging berth is not available on the Vessels arrival at or off the port of loading/discharging, the Vessel shall be
entitled to give notice of readiness within ordinary office hours on arrival there Laytime or time on demurrage shall then count as
if she were in berth and in all respects ready for loading/discharging provided that the Master warrants that she is in fact ready in all
respects. Time used in moving from the place of waiting to the loading/discharging berth shall not count as laytime
As explained, on arrival at the load port, a vessel was unable to proceed to berth due to congestion and anchored at a location
directed by the port authority. At this point the vessel tendered NOR. A dispute arose, in respect of the owners subsequent
demurrage claim, as to whether or not this NOR was valid and an arbitration was commenced.
The arbitrators held that the NOR was invalid as it had been tendered outside of port limits and therefore did not comply with the
requirements of Clause 15, as detailed above. Port limits were identified by reference to the relevant Admiralty chart presented to
the tribunal.
The owners disputed that port limits included any area where vessels are customarily asked to wait by the port authorities, where
vessels load or discharge cargo and crucially anywhere outside the delineated area in circumstances where the vessel is ordered to
wait by the port authorities.
The owners appeal was dismissed. Applying The Joanna Oldendorff principle, the Judge held that the arbitrators were entitled to
conclude that the vessel was not within port limits based on the Admiralty chart which had been presented to them. Places where
vessels are ordered to wait for their turn to load, which are included in the definition of port provided by the Laytime Definitions for
Charterparties 2013 (as submitted by Owners) as well as the Baltic Code 2014, can nevertheless fall to be outside port limits.
However, an additional argument submitted by the charterers that, for the sake of certainty, port limits should be conclusively
defined by the geographical limits as shown by an Admiralty chart, was also dismissed. In this case, the owners had failed to prove
that the vessel was within port limits where limited material had been provided to the arbitrators. The judgment left it open for a
different conclusion to be reached based upon further material, even with regards to the same port.
This case serves as a reminder of the importance of tendering NOR which complies with the requirements of the charter. It is open
to the parties to specifically provide for what they intend in terms of allocation of the risk of delay from congestion at the named
port, as they did so here by express wording in the fixture recap.
The vessel must have arrived at the relevant place for the tender of NOR to be valid. Whereas a NOR simply tendered prematurely
can subsequently become valid, i.e. where time restrictions apply, such as those providing for tender not before commencement of
laydays or between certain hours. A NOR tendered prior to the vessel becoming an arrived ship cannot be perfected and will not
become valid on arrival.
Owners therefore need to be mindful of the regime for tender of NOR provided for in the charter and if in doubt, seek advice on
valid tender to avoid disputes.
Australia: LNG shipping cheaper than gas pipeline

Plans to build a gas pipeline from Western Australia to the east coast, which Malcolm Turnbull has labelled an opportunity, are
unlikely to fly because it would be cheaper to ship it around the country as LNG, analysts say.
In a report to clients yesterday, Ord Minnett said a 3000km pipeline from Dampier to the Moomba gas hub in South Australia would
cost more than $5 billion and would deliver gas to Sydney at a cost of $13 a gigajoule, which is well in excess of current prices.
We believe an LNG import terminal, whether it gets gas from WA, the US, or on the Asian spot market, would make more economic
sense, Ord Minnett said.
The report lines up with comments from Woodside Petroleum chief Peter Coleman that it costs three times more to pipe gas from
Queensland to Victoria than it does to ship it as LNG from the Pilbara to Sydney (although his comments related to pipeline reform
being needed).
It also means AGLs study of building an LNG import terminal in Sydney, Melbourne or Adelaide looks a better option.
The pipeline idea was flagged in an interview with The Australian earlier this month by former WA premier Colin Barnett as a
potential solution to soaring east coast gas prices brought about by the construction of $80 billion LNG plants at Gladstone.
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Credit Suisse analyst Mark Samter agreed with the Ord Minnett analysis, saying a pipeline from the west would add about $4 per
gigajoule of pipeline costs, making it more expensive than LNG.
Building a new pipeline from WA is not the only way to get offshore West Australian gas into the domestic market.
When Jemenas planned Northern Gas Pipeline from Tenant Creek to Mt Isa is complete in 2018, it will hook up Darwin with east
coast markets.
Last year, Inpex said the pipeline it is building from the Browse Basin off WA to Darwin as part of its $US37bn Ichthys LNG project
would have spare capacity that could allow development of other fields and provide access to east coast markets if economics
supported it.
Atlantic Basin crude sails for Asia after STS transfers

More Atlantic Basin crude is on route to Asia-Pacific following several ship-to-ship transfer operations offshore Southwold, UK, as a
narrow Brent-Dubai spread continues to encourage crude volumes eastward.
And further shipments to the region are likely to go ahead over the coming sessions.
The 2mn bl Orthis has completed a ship-to-ship transfer operation with the 1mn bl Everbright, taking its second Ekofisk crude cargo
from the smaller Suezmax tanker in as many days, ahead of the weekend. The Orthis final destination was uncertain at the time, as
the tanker was moving away from the transfer area signalling for Atlantic.
But over the weekend, the Orthis changed its destination to Singapore, where it is expected to arrive on 10 June, although the
country is rarely the final destination for North Sea crude, which usually continues onwards to China or South Korea.
And, at the close of last week, the 2mn bl Gener8 Miltiades was signalling for the South Korean port of Yosu, where it is expected to
arrive on 4 June, with its co-loaded crude cargo.
The tanker arrived at Southwold from the Hound Point terminal, partially-laden with Forties crude, before aligning with the smaller
Deep Blue to receive its 730,000 bl Urals crude cargo. The Deep Blue was fixed by Glencore, according to shipping reports, and the
Gener8 Miltiades co-loaded crude cargo is destined for GS Caltexs 750,000 b/d refinery in Yosu.
A tanker loaded with North Sea Ekofisk crude also made the rare voyage to Myanmar (Burma) last week.
The arbitrage of Atlantic Basin crude to Asia-Pacific is currently being encouraged by a widening of the markets contango structure
where later loading dates are priced at a premium to more prompt-loading crude and a narrowing of the Brent-Dubai EFS,
which makes the grades more attractive to buyers in Asia. Junes Brent-Dubai EFS was at 75/bl on 21 March the lowest front-
month EFS since the end of July 2015. The EFS opened 2017 above $1.70/bl.
The 2mn bl Desimi aligned with the similarly-sized Sea Lynx over the weekend, and seemed to partially transfer its crude cargo to the
vessel, which arrived in the area empty from Rotterdam. The Desimi initially loaded its Forties crude cargo at the Hound Point
terminal for Vitol on 9 March, and has been floating offshore since. Vitol had offered several cargoes of Forties loading by ship-to-
ship transfer from the vessel at Scapa Flow, Scotland, in the North Sea trading window several weeks ago without attracting any
buyers.
The final destination for both vessels is uncertain, but VLCCs loaded with Forties crude usually sail for China or South Korea.
And the 2mn bl Miltiadis Junior is currently receiving its third crude cargo offshore Southwold, having aligned with the smaller Stena
Arctica over the weekend. The larger tanker arrived at Southwold empty from Donges, France, while the Stena Arctica arrived from
the Russian port of Ust-Luga, where medium sour Urals crude is loaded. The Miltiadis Junior has already received crude from the
Ligovsky Prospect which arrived at Southwold from Rotterdam and the Seaborn which arrived from the Russian port of
Primorsk, where Urals crude is also loaded.
LR2 tanker bound for New York redirects, unleaded now bound for Caribbean: sources
Eyes from both the maritime and petroleum industries turned toward the Atlantic Ocean late last week when it was reported a ship
loaded with unleaded gasoline en route to New York had been diverted to a Caribbean storage hub.
It was not the first time on its voyage that the Amorea, a Long Range 2 tanker, had caught attention.
The first was that an LR2 rarely heads into New York.
Shes a big girl, a shipbroker said of the 115,760 dwt ship.
A tanker that size cannot pull directly up to the docks in New York, a broker said.
She would have to be lightered, he said.
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The second time the ship showed up on peoples radar was when it changed course.
It happens all the time that the Long Range 2 tankers get diverted to Caribbean storage facilities, a Europe-based shipbroker said.
I dont think this is any peculiar case. There is also a possibility that Amorea, which seems to be on a time charter to Shell, may have
moved to Caribbean in order to sell it to the third party.
Though not common, seeing a ship diverted is not unheard of due to changing market conditions, sources said.
It really is a function of the market, a broker said. It all depends on if the arb is open from the Continent to the US.
To be sure, US gasoline prices have come under pressure in recent trading sessions. After averaging 174.81 cents/gal during the
week ended April 14, the NYMEX May RBOB contract finished the week ended April 21 at 164.46 cents/gal. Fridays flat price was
therefore the lowest front-month RBOB futures settle since March 28, when the contract finished at 163.64 cents/gal.
This may help explain why the shipbroker said some other cargoes had recently been diverted.
We saw it a few weeks ago when jet from Asia, which usually goes to Los Angeles, got diverted through the Panama Canal and
ended up in the Bahamas and Florida.
A Handysize tanker was also redirected last week. The MS Simon was headed toward New York, but a few days out for the port, the
ship began heading south and, according to cFlow, Platts trade-flow software, is located east of Cuba.
According to a source, Gunvor sold the cargo to Noble, and thus the discharge port changed.
Shipping market participants said the diversion of one ship due to a lost arbitrage is not a sign of things to come.
Its one ship, a shipowner said. Its minor.
The shipbroker said there is no apparent drop-off in interest for moving cargoes from Europe to the US Atlantic Coast.
There are 10 Medium Range tankers coming into New York over the next 10 days, he said. Theyre not slowing down.
US Energy Information Administration data released Wednesday seems to corroborate this notion. Despite stronger regional
refinery runs, USAC gasoline imports saw a healthy gain, climbing 214,000 barrels week on week, or about 44%, in the week ended
April 14. These barrels accounted for the majority of total US gasoline import growth, which was up 355,000 barrels week on week.
Although this data does not identify the origin of these imports, US Customs data showed that cargoes of various gasoline grades
from the Netherlands, Spain, Norway, Sweden and the UK all found their way to the USAC during the week in question.
In early Monday trade, New York Harbor barge-delivered F2 RBOB was trending slightly above Fridays close of NYMEX May RBOB
futures minus 0.95 cent/gal. A trade source said that a barge of the product for prompt delivery was traded at May futures minus
0.75 cent/gal, and another barge for delivery on any day of April was bid at futures minus 1.0 cent/gal. New York Harbor premium
H2 RBOB was also talked above Fridays settlement price.
Dry Bulk FFA: Capesize Back On Bullish Mode

Capesize FFA Commentary:
A bullish day in relatively good volume for the big ships as rates nudged up for the C5 with 6.50 and 6.75 rumoured fixing for prompt
laydays. The Atlantic was pretty quiet in terms of number of fixtures but there were reports of $15k being agreed for T/A for an
index ship. The paper took the lead from the Pacific with the entire curve lifting witht he front contracts particularly sought after.
This move up surprised many but it will give owners confidence to hold out for firmer rates amid rumours that the miners have some
early stems to cover.
Panamax FFA Commentary:
After finding a level towards the end of last week we saw an early flurry of buying on Panamax paper see prompts gap up on light
volume with May and Q2 trading up to $10650 and $9900 highs before being sold back down post index. Despite closing up on the
day uncertainty reigned supreme with many happy to wait for further clarity making for a dull afternoon.
Supramax FFA Commentary:
Supramax paper witnessed a few better bids creeping in today but with very limited activity. May was paid $9000 early on and Q3
also was seen trading $9000. Although negative index on the 10TC (-$29) and 6TC (-$19) there remained bid support down the curve
at current levels. Have a good evening.
Handysize FFA Commentary:
A quiet start to the week for the handysize paper today, however there was a rumour of $7300 trading on the Cal 18. Have a good
evening.
Full Report enclosed herewith
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Baltic index down on weaker rates for large vessels
The Baltic Exchanges main sea freight index, tracking rates for ships carrying dry bulk commodities, fell on Monday on weaker rates
for large vessels.
The overall index, which factors in rates for capesize, panamax, supramax and handysize shipping vessels, was down 25 points, or
2.09 percent, at 1,170 points. The capesize index lost 50 points, or 2.73 percent, to 1,780 points, its lowest in over six weeks.
Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as iron ore and coal, were down $409 at
$12,960.
The panamax index was down 65 points, or 4.35 percent, at 1,429 points.
Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 to 70,000 tonnes, decreased $513
to $11,469.
Among smaller vessels, the supramax index fell 3 points to 892 points, while the handysize index rose 2 points to 577 points.
Good days ahead for the global dry bulk market

There could be no looking back for the BDI hereon. Hovering around 1300 levels at present, this freight index, which measures the
price of shipping majors raw materials, is expected to move only northwards in the coming months. With global dry bulk traffic set
to increase on select routes and discarding of old vessels only on the rise, BDI could have a smooth and steady uphill journey.
Experts are of the view that US president Donald Trumps policies on pollution norms and thrust on coal production in the worlds
largest economy would have a significant impact on dry bulk trade on the trans-Atlantic route. The earlier Obama administration, for
environmental safety, had enforced a moratorium on coal leases and also asked coal mining companies to avoid mining practices
that harm the environment. Last month, President Trump signed an order rolling back a temporary ban on mining coal and a stream
protection rule imposed by the Obama administration.
Europe has been the largest consumer of US coal. However, according to the latest US Energy Information Administration report, the
countrys coal exports to Europe have declined 28 percent in 2016 on a year-on-year basis.
Amid Trumps new climate and energy order and his talks of repealing climate convention, it will be interesting to see how the
Europe-US coal trade pans out if the US increases its coal production significantly, said Rahul Sharan, lead research analyst with
London-based Drewry Shipping Consultants.
Coal and iron ore are the major commodities of global dry bulk trade. Coal constitutes one-third of total dry bulk trade, while iron
ore forms two-third of it.
Meanwhile, though Brexit has been an important development on the global map as far as trade equations are concerned, dry bulk
trade is not expected to get affected.
Britain has not been a major influence on the global dry bulk market. UKs share in the dry bulk market is less than one percent, due
to this, Brexit is not going to have any impact on dry bulk trade at all, explained Sharan.
Moving towards Asia, experts are of the view that trade links from China would be most crucial for the global bulk market as the
dragon country contributes about two-third of worlds dry bulk trade.
Though China, the worlds second-largest economy, could be impacted by protectionist measures if President Donald Trump sticks
to his campaign pledges to brand the country a currency manipulator and impose heavy tariffs on imports into the US, the dry bulk
will remain insulated as the US is not a major importer of Chinese products in dry bulk industry.
Meanwhile, as China aims to spend over $2 trillion between 2016 and 2020 to expand and improve its railroads and highways,
demand estimates for the dry bulk commodity from the country has shot up significantly. As part of the countrys 13th five-year
plan, spending target has moved to $2.17 trillion from $180 billion in the 12th five-year plan (2011-2015).
During January-March 2017 quarter, Chinas iron ore imports grew nearly 10 percent from the corresponding period last year. In
2016, Chinese iron ore imports grew significantly crossing one-billion tonne mark even as the government came down heavily on
excess capacity in the domestic market. The shut-down was mainly on low-grade producers which used scrap metal and hence,
demand for iron ore requirement was not hurt, explained an analyst with a local brokerage.
While the pick up in coal and iron ore trade, the key commodities that drive global dry bulk market, is expected to take care of the
demand side of vessels, continuous demolition of vessels is likely to correct the much needed demand-supply imbalance in the
global market. This, in turn, is seen bringing down oversupply of vessels as a percentage of demand.
A lot demolition has already happened from 2014 to 2016 and in 2017, we expect supply will contract and, demand for newer
vessels to grow faster. This means freight rates should keep improving now onwards, said Sharan of Drewry.
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Age of the vessel and future earnings estimates were the main reasons why demolition increased in last 2-3 years, said industry
officials. Owners were in a complete cash crunch and were running in losses in 2015 and 2016. No one was ready to buy vessels and
so have had to demolish, explained Sharan.
Alongside, with IMO coming up with two stricter regulations to protect the environment (one to get effective in September 2017
and another in 2020), demolition activity of vessels will only enhance in coming years. (see chart: Source Drewry Shipping
Consultants).
All in all, it seems that good days lie ahead for the global dry bulk market.
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Shipowners and Mariners Dont Suffer Fools Gladly with Disruptive Big Data Technologies
Semanticsthis is all Disruptive Technology is. What value does it give to the Shipowner? Give them the meat on the bones to
chew on. Bottom line, Maritime is mired in tradition and conservative culture. The transient crews and very nature of complex Ship
ownership, various Vessel Charter-parties, Flag State Regulations, Class Rules, Industry regulationsthe list goes on, provides for
complex understanding.
It creates tedious issues that requires careful navigation (excuse pun)to deal with to help the shipping fraternity when new
technologies or processes present themselves that supposedly disrupt their existing business models and onboard way-of-life.
Consider an average sized commercial vessel can see between 80-120 different OEM Suppliers even many more on certain vessel
types so all this adds to further complexity onboard.
Mariners are very pragmatic, perceptive people. They have to bewho will come to their aid in the middle of the Pacific or Atlantic
with a Force 12 Typhoon/Hurricane respectively, now extending beyond the Beaufort Scale, with no steerage, Main Engine Failure,
water ingress? Who will aid them when 120nm out at the drop of an hat on the UK/Norwegian/Texan Continental Shelf tapping into
the hydrocarbons that powers the world economies with inherent high risks associated with these operations? No-
oneimmediately, that is for sure. So they have to find their own solutions in isolation.
So, our esteemed Maritime (Offshore Included) colleagues need solutions that affords minimal disruption to vessel
functionality/operabilitycost effectively. Cost-effectively, requires emphasis because a Ship can have many OEMs (as above) all
vying to sell their Sensors, Condition Monitoring services etc but not all CM services are truly the most applicable and cost effective
technique available, unless rigorous engineering analysis proves otherwise.
Will sticking a sensor on it to feed datasets really make the difference?maybe, but what the solution really is are to build them a
reliable platform for their vessel first and foremost that is safe, reliable and durable and develop a 21st Culture of Reliability and
ownership. Then stick the sensors on later and interpret the big data after they have mastered reliability.
The best analogy that comes to mind is sticking a complex Dynamic Positioning (DP) System on an Oared propelled Viking
Longboatillogical. So disrupting with big data is a costly exercise for the Shipowner because digitalisation starts with reliability. If
the vessel runs as-is with existing models, this will not benefit the Shipowner in the remotest sense. This is not opinion, but empirical
fact.
Shipowners and Mariners are unique people, who do not suffer fools gladly, believe me. The Crews onboard have enough to deal
with with copious amounts of unjustified regulation, that at best is costly to the Shipowner and time consuming too to shore base
support and onboard, at worst it is potentially dangerous.
So we must give them something that will benefit the Shipowner, Crew and all stakeholdersall this disrupting technology may
just not deliver the efficiencies it so promisesyet; without developing the platform of reliability first and foremost and analysing
which systems would benefit mostly from Condition Monitoring etc.
It is incumbent upon us to responsibly provide [by far the cogs of global commerce] appropriate, cost effective tools to improve
vessel safety and reliability, efficiently to deliver the goods safely for the Crew, the vessel, the cargo, the environment and the global
economy. Shipping accounts for 90% of global trade, least we forget how important Shipowners, Maritime Professionals onboard
Ship who face the perils of the sea in maintaining global commerce are. Let us collaborate and bring to the industry a proper
platform to greatly improve vessel safety, reliability and efficiency, not a myriad of sensory technology at least without engineering
analysis to justify its presence.
Hamburg 380 CST bunker fuel at five-week high on tight supply

The 380 CST grade of bunker fuel oil in Hamburg has hit a five-week high against the regional benchmark 3.5% FOB Rotterdam
barges amid tight availability at the German port, sources said.
It is tight for supplythere is no fuel on the prompt, one trader said. Other traders also said there was limited availability of 380
CST bunker fuel in Hamburg.
On Friday, 380 CST Hamburg delivered bunker fuel oil was assessed at a $17.25/mt premium to 3.5 % FOB Rotterdam barges, or
$292/mt on an outright basis, the highest since March 16 when the spread was $17.50/mt, S&P Global Platts data showed.
One source said he could offer prompt deliveries but the premium would be higher.
The market will remain short for the next few days, another trader said.
A cargo with fresh supply was anticipated to arrive in a few more days. Demand for bunker fuel was quiet Monday morning, with
380 CST delivered Hamburg bunker fuel oil was pegged at $298/mt-$300/mt, traders said.
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Maersk Strengthens Ties Between African And Japanese Customers

Already the worlds second-largest and second-most-populous continent, with 1.2 billion people as of 2016, Africa accounts for
about 16% of the worlds human population and it is predicted that, by 2034, it will have a larger workforce than China or India.
However, maintaining trade with advanced economies such as Japan is crucial to sustaining Africas economic growth.
This is according to Masahiko Shirai, Japan Country Manager at Safmarine a member of A.P. Moller Maersk who recently
hosted customers in Tokyo. Japan-Africa trade has seen significant growth over recent years and our hope is that platforms such as
this customer event will further strengthen ties with our Japanese customers by highlighting future economic growth opportunities
on the continent.
With over 100 years experience of doing business in Africa, A.P. Moller Maersk has operations in almost every country across the
continent. We know Africa better than anybody else in the industry and remain committed to connecting this booming continent to
the rest of the world. In order to do this effectively, it is essential that we continue to highlight the vast economic potential of the
African region.
Recent data from IMF, McKinsey Institute, World Bank and Citibank confirms this growing potential, stating that Africa will host the
worlds second-fasted growing economies to 2020. With the advantage of a young and growing population, the continent is also
experiencing rapid technological changes, which are unlocking new opportunities for consumers and business. Adding to this, is
Africas abundant supply of resources and powerful urbanization rate said to be the fastest in the world right now, Shirai explains.
Maersk Line and Safmarine are positioned perfectly to foster opportunities along the Africa-Japan trade route, says Shirai. We have
a significant share in the region and the experience in creating solutions and partnering with customers to address their shipping
needs. Further cementing our African footprint is the fact that we have a strong presence and network in the region, with over 1 200
local staff on hand and in touch with the local communities.
Shirai concludes: We believe the companys change to become a global integrator of container logistics will position us to serve our
customers better. Not just for the next five or 10 years, but for the next 100 years. At present, 10% of the overall business turn-over
is generated in and around Africa and we remain committed to delivering superior customer experience in order to retain and grow
developments in this area.
Asia Fuel Oil-380-cst premiums ease, visco spread rises to multi-month high
A slow down in interest from buyers in the Platts window pushed cash premiums of 380-cst fuel oil lower on Monday, while the
front-month visco spread rose towards its highest since December after two weeks of steady gains.
WINDOW TRADES
Four 20,000 tonne cargoes of 380-cst fuel oil were traded in the Platts window on Monday along with a 40,000 tonne cargo of 180-
cst fuel oil.
The reported 380-cst fuel oil deals traded at a premium range of 50 cents per tonne to 80 cents per tonne to Singapore quotes. This
compared to Fridays deals which were concluded at premiums of 30 cents a tonne to $1.25 a tonne to Singapore quotes.
380-cst fuel oil cash premiums FO380-SIN-DIF were 41 cents a tonne lower than the previous session at a premium of 81 cents a
tonne to Singapore quotes.
A total of 3.1 million tonnes of 380-cst fuel oil have traded in the window since the start of April.
SWAPS MARKET
The ICE-traded May visco spread, the differential between the price of 180-cst and 380-cst fuel oil, edged higher on Monday to
about $8 a tonne as continued buying interest from an unspecified international trading house continued to bid up the contract.
Reuters data showed the May visco spread at $7.75 a tonne, its highest Since early December.
ASSESSMENTS
FUEL OIL
CASH ($/T) ASIA CLOSE Change % Change Prev Close RIC
Cargo - 180cst 306.81 -2.39 -0.77 309.20 FO180-SIN
Diff - 180cst 1.87 -0.23 -10.95 2.10 FO180-SIN-DIF
Cargo - 380cst 297.55 -2.64 -0.88 300.19 FO380-SIN
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Diff - 380cst 0.81 -0.41 -33.61 1.22 FO380-SIN-DIF
Bunker (Ex-wharf)- 380cst 299.50 -3.00 -0.99 302.50 BK380-B-SIN
Bunker (Ex-wharf) Premium 1.95 -0.36 -15.58 2.31
Major shipping nations join forces to promote digital certificates

Today Director General of the Danish Maritime Authority, Andreas Nordseth, signs an agreement with Singapore and Norway on
cooperation on digital certificates. The agreement is intended to make more countries migrate from paper certificates to digital cer
The Danish Maritime Authority made world news when it announced on 24 June last year that from then on Danish ships were no
longer to set to sea with heaps of paper certificates.
Today the Danish Maritime Authority only issues digital certificates, which are very efficient and save time and money for both
shipowners and authorities.
More countries will follow Denmark
Today the Danish Maritime Authority has concluded a Memorandum of Understanding (MoU) with the maritime authorities in
Singapore and Norway. The MoU has been signed on the occasion of the maritime event Singapore Maritime Week and establishes
the basis for the three countries efforts to spread the use of digital certificates.
Director General Andreas Nordseth from the Danish Maritime Authority:
It is an important step that Norway, Singapore and Denmark three major shipping nations join forces to spread digital
certificates. Cooperation makes it easier for us to promote the use of digital certificates and make more countries enter upon the
digital course.
Further reduction of burdens ahead
Digital certificates have the potential to give us much more than faster postal delivery:
E-certificates are merely the tip of the iceberg. The certificates as such are only the beginning. The next step will be for the
authorities to exchange and inspect certificates via the databases of one another rather than to do so on board the ships, explains
Andreas Nordseth.
Hereby, it becomes possible to drastically reduce the time spent by PSC officers checking documents on board ships in ports all over
the world.
Maritime: FG wants strong shipping lines for Africa

Minister of Transport, Chibuike Amaechi, has urged maritime leaders in Africa to float strong shipping lines that could create jobs,
generate revenue and compete globally.
Speaking at the third Association of African Maritime Administrations (AAMA) conference in Abuja, he said the future of Africas
maritime sector remained bright as the continent could boast of untapped maritime potential.
Amaechi called for stronger intra-African cooperation by way of information sharing, stronger regulatory functions and wider
stakeholder collaboration to ensure all-inclusive maritime administration.
He assured the visiting maritime delegates that Nigeria would contribute to the growth of the maritime sector in Africa by helping to
tackle the various challenges plaguing the industry.
Now, we are experiencing low tonnage, piracy, unregulated fishing sector, environmental degradation and so on. Our waterways
are underdeveloped and so we rely on foreigners. We dont have coast guards. We need to strengthen the maritime industry. We
need to build capacity in manpower and enforcement.
Africa depends on imports from other countries carried by their vessels. These are despite our vast maritime resources. We need to
change these and Nigeria will play a role in this, he said.
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Atlantic Pilotage Authority chooses MSRC for SEAiq PPU training
Canadas Atlantic Pilotage Authority (APA) once again chose the Maritime Simulation and Resource Centre (MSRC) as their preferred
training organization for specialized SEAiq training on Portable Pilot Units (PPUs). A total of 16 pilots from Cape Breton Island
Pilotage were trained by MSRCs Captain Bernard Cayer in Port Hawkesbury, Nova Scotia.
PPUs are mobile devices such as laptops or tablets that can plug in to a ships navigation system, giving pilots added situational
awareness, including access to real-time downloadable local navigational information. SEAiqs unique PPU system enables pilots to
use their PPUs across a variety of mobile apps.
MSRCs SEAiq PILOT APPLICATION FOR PPUs course is designed for pilots as well as training instructors wishing to become familiar
with the use of the SEAiq Pilot application. The two-day program involves theoretical and interactive discussions, as well as hands-on
practice on PPUs. Participants are taken through all functions of SEAiq, from basic to advanced levels.
The APA has entrusted the MSRC for the training of their pilots for many years for different programs. For example, in 2016, MSRC
gave the same SEAiq Pilot Application for PPU training to the Newfoundland and Labrador Pilots (in Arnolds Cove, NFLD) and the
Halifax Pilots (in Halifax).
MSRCs instructors are extremely knowledgeable and professional, and have excellent program delivery skills, said Deidre Lewis,
APAs Director of Operations. The quality of training is very high, which is why we continue to engage MSRC to provide pilot training
to our different pilotage groups.
Fiona Pounds: Valid tender of Notice of Readiness

In the recent English High Court case of MV Arundel Castle1, the Judge ruled that a vessel, that could not immediately proceed to
berth due to congestion and that was directed to anchor outside port limits by the port authority, was held not to be an arrived ship
for the purposes of tendering Notice of Readiness (NOR).
Clause 15 of the fixture recap contained the following wording:
[Notice of readiness] to be tendered at both ends even by cable/telex/telefax on vessels arrival at load/disch ports within port
limits. The [notice of readiness] not to be tendered before commencement of laydays.
In addition, the Gencon 94 standard form was incorporated into the charter as follows:
Otherwise Gencon 94 printed form charterparty with logical amendments on [basis] the terms as per fixture recap.
Clause 6(c) of Gencon 94 includes the following under the sub-heading Commencement of laytime (loading and discharging):
If the loading/discharging berth is not available on the Vessels arrival at or off the port of loading/discharging, the Vessel shall be
entitled to give notice of readiness within ordinary office hours on arrival there Laytime or time on demurrage shall then count as
if she were in berth and in all respects ready for loading/discharging provided that the Master warrants that she is in fact ready in all
respects. Time used in moving from the place of waiting to the loading/discharging berth shall not count as laytime
As explained, on arrival at the load port, a vessel was unable to proceed to berth due to congestion and anchored at a location
directed by the port authority. At this point the vessel tendered NOR. A dispute arose, in respect of the owners subsequent
demurrage claim, as to whether or not this NOR was valid and an arbitration was commenced.
The arbitrators held that the NOR was invalid as it had been tendered outside of port limits and therefore did not comply with the
requirements of Clause 15, as detailed above. Port limits were identified by reference to the relevant Admiralty chart presented to
the tribunal.
The owners disputed that port limits included any area where vessels are customarily asked to wait by the port authorities, where
vessels load or discharge cargo and crucially anywhere outside the delineated area in circumstances where the vessel is ordered to
wait by the port authorities.
The owners appeal was dismissed. Applying The Joanna Oldendorff principle, the Judge held that the arbitrators were entitled to
conclude that the vessel was not within port limits based on the Admiralty chart which had been presented to them. Places where
vessels are ordered to wait for their turn to load, which are included in the definition of port provided by the Laytime Definitions for
Charterparties 2013 (as submitted by Owners) as well as the Baltic Code 2014, can nevertheless fall to be outside port limits.
However, an additional argument submitted by the charterers that, for the sake of certainty, port limits should be conclusively
defined by the geographical limits as shown by an Admiralty chart, was also dismissed. In this case, the owners had failed to prove
that the vessel was within port limits where limited material had been provided to the arbitrators. The judgment left it open for a
different conclusion to be reached based upon further material, even with regards to the same port.
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This case serves as a reminder of the importance of tendering NOR which complies with the requirements of the charter. It is open
to the parties to specifically provide for what they intend in terms of allocation of the risk of delay from congestion at the named
port, as they did so here by express wording in the fixture recap.
The vessel must have arrived at the relevant place for the tender of NOR to be valid. Whereas a NOR simply tendered prematurely
can subsequently become valid, i.e. where time restrictions apply, such as those providing for tender not before commencement of
laydays or between certain hours. A NOR tendered prior to the vessel becoming an arrived ship cannot be perfected and will not
become valid on arrival.
Owners therefore need to be mindful of the regime for tender of NOR provided for in the charter and if in doubt, seek advice on
valid tender to avoid disputes.
India pushes ahead with new terminals at Irans Chabahar port minister
India is fast-tracking its plans to complete two new terminals at Irans Chabahar port with the tendering process already underway,
Indias transport minister said.
Under a memorandum signed by India and Iran last May, India is equipping and will operate two berths at Chabahar, investing
$85.21 million upfront and $22.95 million annually under a 10-year lease.
Located in the Shahid Beheshti part of the port, one berth will be 640 meters length for container vessels and the other will be 600
meters for multipurpose vessels.
The agreement for Chabahar port is finalized and a global port company formed. We are going for the tender process and work is
moving very fast, Indias Minister for Road Transport, Highways and Shipping Nitin Gadkari said on the sidelines of an event in
Singapore.
Machinery related work has been done, construction is taking place, cranes have been deployed and we will try to make the
terminals functional [as soon as possible], he said.
Chabahar port, on Irans southeastern coast in Sistan-Baluchistan province, is easily accessed by ports on Indias west coast and gives
India direct access to Iran without transiting Pakistan and Afghanistan. The route will expedite movement of fertilizers and
petrochemical intermediates from the Chabahar Free-trade Industrial Zone to India.
Last month, India Ports Global Limited (IPGL) invited qualifying bids for management, operations, and maintenance on container and
multipurpose terminals at Chabahar. The bids have already been opened and the pre-qualifiers will be announced by the end of this
month. Once the pre-qualifiers are shortlisted, final bids will be invited.
The selected bidder will be responsible for management, operation and maintenance of the project for 10 years.
India set up IPGL in 2015 to make strategic investments in overseas ports. It is owned 60% by Jawaharlal Nehru Port Trust and 40%
by Kandla Port Trust.
Coal vessel queue at Australias PWCS terminals hits five-week high: HVCCC
The number of vessels queuing at the Port Waratah Coal Services terminals at the Port of Newcastle, Australia, rose to a five-week
high of 16 ships Sunday, from 13 the week prior, the logistics coordinator for the Hunter Valley coal chain said Monday.
Its expected to fall back in line with the year-to-date average queue of nine ships in the coming weeks, with the Hunter Valley Coal
Chain Coordinator predicting that there would be nine ships end-April and 10 end-May.
Inbound receivals to PWCS totaled 3.51 million mt for the week ended Sunday, up from 3.38 million mt the previous week, HVCCC
said.
Port Waratah coal stocks finished the week at 1.05 million mt, down by 131,000 mt from the previous week, HVCCC said.
There were no vessels loading coal at the Dalrymple Bay Coal Terminal on Monday, while there were 28 at anchor, which compares
to one loading and 30 at anchor a week earlier, DBCT Management data showed.
The Goonyella rail system, which connects to DBCT, remains closed due to damage caused by Cyclone Debbie late March. Latest
advice from operator Aurizon has it scheduled to reopen on April 26.
There were four ships at berth and 27 at anchor at the RG Tanna coal terminal at the Port of Gladstone, which compares against four
at berth and 32 at anchor a week earlier, the Gladstone Ports Corporations shipping schedule showed.
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The Port Kembla Coal Terminal had six ships assembled and two queuing, which is up from zero queuing and assembled a week
earlier as well as above the year-to-date average of one assembled and one queuing, data from the terminals operators showed.
PKCT was not available for comment.
Coal stocks at PKCT fell from around 231,029 mt week on week to 117,513 mt, it said. The terminal exported around 258,481 mt in
the past week, which is fairly similar to the 261,618 mt shipped the previous week, it said.
Police block farmers protest against planned Nicaragua canal

Police in Nicaragua blocked thousands of farmers and rural residents from holding a march against a government plan to build a
canal across the country, potentially carving up their land.
They are closing off all the roads. Its pitiful whats happening in Nicaragua, said one of the leaders of the demonstration, Francisca
Ramirez.
Police preventing buses and trucks carrying protesters from converging in the town of Juigalpa, east of the capital Managua, said the
demonstration was illegal.
A police statement said officers faced down groups of people behaving with hostility, armed with clubs, machetes, rocks and
firearms.
A lawyer for the protesters, Monica Lopez, said 20 of them were temporarily detained, but police did not confirm that.
The farmers are angry that President Daniel Ortega in 2013 organized for a Chinese consortium, HKND, to build the $50 billion canal
in return for a concession to run it for at least 50 years.
Ortega: thief, traitor, selling our country, yelled the protesters.
Im afraid they will take my land away, said one of them, Adolfo Jarquin, 56, who owns more than 100 hectares (245 acres).
Many of them have found it impossible to obtain bank loans, and municipal works along the canals path have come to a standstill,
Ramirez said.
An opposition politician at the protest, Henry Ruiz, told AFP the canal was an unconditional handover of Nicaraguan land.
The plan calls for between 30,000 and 120,000 rural inhabitants along its 276-kilometer (171-mile) length to be displaced and land to
be expropriated.
The canal is meant to rival the century-old Panama Canal. Thus far there has been no excavation, however, despite HKND saying it
was meant to start at the end of last year.
Foreign observers in the country are skeptical about whether it will go ahead.
Iran, which has good relations with Nicaragua, has said it wants to participate in the project.
Cargo traffic in 5 AP minor ports sinks

Cargo traffic at the five minor ports in AP combined has witnessed a decline during 2016-17 as compared to the previous fiscal owing
to various factors including an overall downturn in global shipping trade.
The five minor ports of AP handled around 69.6 million tonnes of cargo during 2016-17 as compared to 72.7 million tonnes in 2015-
16, thus recording a decline of around 4% in the state. As per data provided by the AP ports department, four out of the five minor
ports showed a decline in cargo traffic during the 2016-17 fiscal.
Elaborating on the reasons for the decline, a ports department official said overall downturn in global shipping trade was one of
the major factors followed by reduction of iron ore imports due to increased domestic production. Also, the reduction of coal
movement through ports due to the government policy of encouraging domestic production through Coal India Limited also led to
reduction in imports, affecting cargo traffic in the minor ports.
Ports department officials said reduction of freight charges by railways also led to power producing companies moving towards
railways for cargo movement.
A shipping industry source, who didnt want to be quoted, said, The efficiency of cargo handling in ports such as Krishnapatnam,
Gangavaram or Kakinada is on par with international standards. But, the industry hasnt seen a major growth trajectory for most
part of last year whether it is for exports or imports. Majority of the industries that will boost cargo movement are still in various
stages of planning and construction, whether it is in the Visakhapatnam cluster or near the Nellore and Chittoor industrial clusters.
As many of the investments go for production, we can see an increase in cargo movement. Incidentally, AP has witnessed a capacity
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addition of 51% in the last three years among its minor ports. While the overall capacity to handle cargo in minor ports was around
121.30 million tonnes per annum in 2014-15, it has increased to 184.24 million tonnes in 2016-17.
Trumps America to Win as China Stumbles, Steel Veteran Says

This years Chinese steel price rout heralds worse to come, according to a 50-year industry veteran who says the worlds top
producer is poised for a painful contraction as demand tumbles and rival nations build trade barriers.
Chinas looming troubles contrast with optimism among U.S. steelmakers, encouraged by President Donald Trumps pledges to back
the industry with infrastructure spending and an America First trade agenda. Last week, the Trump administration began an
investigation into whether steel imports threaten national security, while U.S. Steel Corp. asked for a probe into alleged price-fixing
by Chinese producers.
Were going from one world to another, Peter Marcus, founder and managing partner of U.S. consultancy World Steel Dynamics,
said in an interview in Shanghai. Were going to have mercantilism thats going to promote domestic industries. The U.S. is going to
win, and China is going to lose.
Prices in China could return toward the crisis levels seen in late 2015 before the end of the year, Marcus said Sunday. Annual output
may shrink by 100 million metric tons in three to four years as domestic demand slumps by the same amount, and as exports fail to
hold their explosive growth this decade, he said. China last year made 808 million tons, about half of world production.
Zero-Sum Game
Chinas steel industry is doing an incredible job with great workers, but this is a zero-sum game, and they are in trouble, said
Marcus, who began tracking steel companies on Wall Street in the 1960s, and has advised some of the worlds biggest mills. The
nations steel sector faces zugzwang, he said, referring to the chess term when a player cant move without triggering a loss.
Chinas steel prices surged at the start of 2017, extending last years rebound and giving a rocket to earnings, amid optimism over
stimulus and government-backed plant closures to curb supply. But the rally has turned to rout, with the benchmark hot-rolled coil
product used in cars and consumer goods tumbling 23 percent in the last two months. Even though the raw material iron ore has slid
to a five-month low, it hasnt been enough to prevent margins at some mills turning negative, according to Bloomberg Intelligence.
Median-cost producers are already losing $40 a ton. This is a catastrophe for Chinas steel industry, Marcus said, dismissing as a
joke the governments efforts thus far to tackle oversupply. They keep announcing closures of plants that are already closed, we
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all know that. And the capital spending by medium to larger companies means capacity has been rising. Going forward they will
reduce, but it will take pain.
On Monday, China delivered a fresh warning. Local governments should boost supervision of 29 companies that either didnt meet
previous capacity-cut commitments, or failed to meet environmental or safety standards, the Ministry of Industry and Information
Technology said. A further 40 separate companies were told to address issues on environmental or safety standards.
Exports Checked
Chinas late-2015 slump in prices and margins saw mills offloading excess supply on world markets. That hammered overseas
producers and prompted what Marcus called an avalanche of trade protections, most targeting China. There were 47 measures
against China in 2015, 39 in 2016, and 11 in the first quarter of 2017, Wu Wenzhang, president of Shanghai Steelhome Information
Technology Co., told a conference in Shanghai on Saturday.
You have all these countries they cant export to, and its an incredible constraint, said Marcus. Much of the additional export
volume since 2010 has fed relatively open, fast-growing regions such as Southeast Asia, but growth there is limited and there will
be more competition in those markets, he said. Exports fell by more than a quarter from a year earlier in the first three months of
2017 as stronger prices encouraged sales at home.
European stainless steel surcharges hit four-month lows in May

Monthly alloy surcharges on austenitic grades of stainless steel flat-rolled products in Europe for May are set to fall to their lowest
levels since January as both nickel and ferrochrome prices have weakened, first mill announcements indicated.
Surcharge levels had resumed their upward trend in April, hitting fresh multi-year highs.
Finlands Outokumpu, the Continents largest producer, set its alloy adjustment factor for type 304 (4301) flat products at
Eur1,350/mt ($1,466/mt) for May, down Eur105 from Aprils five-year high.
Dollar-denominated nickel prices on the London Metal Exchange moved briefly back above $10,000/mt in early April but have since
come under renewed selling pressure, hitting their lowest level since June 2016 last week at just above $9,300/mt.
The LME nickel cash settlement price has averaged $9,776/mt for April to date, down 4.6% from $10,230/mt for March.
Outokumpus surcharge for molybdenum-bearing type 316 (4401) flat products was set at Eur1,936/mt for May, down Eur85 from
April.
Spot molybdenum oxide prices moved above the $9/lb level in early April, basis Platts assessments, for the first time since January
2015, but the market has since eased back to trade below $8.80/lb.
Meanwhile, Outokumpus surcharge for nickel-free type 430 flat products is down Eur39 to Eur769/mt for May.
The European benchmark ferrochrome price negotiated between producers and steel mills was settled at 156 cents/lb for second-
quarter 2017, down 11 cents, or 6.7%, from the previous quarter but up 90% from 82 cents lb in Q2 2016. Outokumpus type 430
surcharge was Eur418/mt in May last year.
Top Iron Ore Forecaster Says Prices Will Sink Back Below $50
Iron ore is destined to retreat back below $50 a metric ton next year as supplies go on rising, according to the top forecaster, who
warned that weakening prices will probably encourage the sale of inventories.
The raw material will drop to average $62 in the third quarter and $59 in the final three months of this year before falling through
2018 to a low of $41, said Justin Smirk, senior economist of Westpac Banking Corp. Westpac placed first in predicting prices in the
first quarter, according to data compiled by Bloomberg.
Iron ore was whipsawed last week after hitting a near six-month low as investors weighed signals of strength in the largest user
China, including steel output at a record in March, against prospects for rising supply. Top miners including Brazils Vale SA are
bringing on new capacity, bolstering seaborne sales, at the same time that miners in China have been reviving production. Smirk said
that thered been a huge ramp-up in Chinese supply.
As supply builds up and prices come off, people will begin to question the wisdom of holding on to inventories, Smirk said in a
phone interview on Friday. The signs are now pushing in one direction: while well get some volatility, the momentum is just on a
downward trend now.
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Spot ore with 62 percent in Qingdao fell 2.5 percent to $66.53 a dry ton on Monday following a volatile week, according to Metal
Bulletin Ltd. The commodity which hit $94.86 in February averaged $86 in the first three months and $72.32 this quarter.
Futures in Dalian and Singapore fell, with the SGX AsiaClear contract as much as 3.9 percent lower.
The outlook from Sydney-based Westpac which also placed first for forecasting base metals contrasts with Australia & New
Zealand Banking Group Ltd.s view prices will settle between $70 and $80 over the rest of this year. Many other banks are
pessimistic, including Barclays Plc, which said in a note on Monday that while iron ore may recover in the short term, itll slump
toward $50 by the fourth quarter as fundamentals deteriorate.
Goldmans View
Goldman Sachs Group Inc. attributed irons recent drop to mills destocking, traders being forced to sell holdings as prices began to
fall, as well as a decline in steel margins, according to an April 20 report. Earlier this month, the bank flagged prospects for iron ore
weakness in the second half.
Among reasons cited by bears for a weaker outlook is the potential for more supply, both from mines in China and overseas.
Mainland miners boosted production 16 percent in the first three months of 2017, official data showed. In Brazil, Vale posted record
first-quarter output as the worlds largest shipper started exports from its $14 billion S11D complex.
On Monday, Anglo American Plc added to the picture of rising global production, saying output rose 21 percent to 14.8 million tons
in the three months to March 31. Operations at its Minas Rio project in Brazil are ramping up toward a target of 26.5 million tons a
year, the London-based company said in a statement.
Tipped Over
Steel prices in China have been dropping, with the spot price of hot-rolled coil down almost 20 percent this year, according to Beijing
Antaike Information Development Co. Weve also seen steel prices tipped over and margins of steel mills being compressed, said
Smirk. The whole demand-driven supply shortage late last year that boosted Q1 has actually been reversed.
There are tentative signs the stockpiles at Chinas ports may be starting to be sold off, according to Smirk. After peaking at 132.5
million tons on March 24, holdings have dropped for four weeks, the longest streak since September, according to Shanghai
Steelhome E-Commerce Co.
If inventories were unwound and dumped onto the market, theres a greater momentum for the downward side, said Smirk,
whos tracked commodities for more than a decade. That would be a very nervy sign for the market.
U.S. corn market should not dismiss dry summer forecast for Midwest -Braun
After a string of three excellent harvests, corn traders and farmers have reason to be leery of any possible growing-season weather
scares in the United States.
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Still, the latest summer forecast is at least worth tacking onto their radar.
On Thursday, the U.S. government-run Climate Prediction Center released new monthly and seasonal weather outlooks for the
United States. These showed the possibility for a drier pattern to set in over the next three months across the Midwest where the
bulk of the corn is grown.
A few other weather models and forecasters have been suggesting the possibility for dryness to be a theme this summer in at least
parts of the U.S. Corn Belt, which if severe enough, would threaten yields for the countrys top grain crop.
It would help planting if the Midwest is dry in May, the busiest corn-planting month. Dry weather moves the process along and
reduces the risk of delay. Also, most of the top producing states have plenty of moisture to get through the planting period,
according to the Palmer Drought Severity Index (PDSI), maintained by the U.S. government (http://reut.rs/2oVnBnr).
PDSI values above zero depict the presence of moisture, while those below zero depict its absence. In March, the PDSI across the
Midwestern states was a 1.68, considerably higher than the 20-year average of 0.52 but lower than the 2.61 in March 2016, the
highest value for that month in more than 40 years.
April has featured active, rainy weather, especially in the Upper Midwest, and many U.S. corn farmers are now planting their crop
into wet soils. Having moisture from the start is favorable for the corn plants, but not if the moisture cannot be retained through the
summer when yield formation takes place.
If CPCs forecast of possible dryness in the U.S. Midwest this summer holds firm over the next month or so, and especially if the dry
bias expands in either strength or reach, it will definitely cause concerns about corn yields.
CORN YIELD FALLS WITH PDSI
When Midwest corn planting begins in April under wetter circumstances in this case, under higher PDSI values there is a very
clear distinction between years that remain wet and those that dry out.
Over the past 35 years, whenever PDSI values dropped between May and August the conclusion of planting through the grain fill
period final corn yield ended up anywhere from average to terrible, but never above average.
This effect is most pronounced when the starting conditions were extremely wet, followed by a substantial dry-out through August.
This happened in 2011 and also in 1983, which was one of the worst-ever corn harvests for the United States.
The analysis also suggests that if the season starts out wet, then PDSI needs to at least maintain or build throughout the summer for
the best outcome. This is how the 2016 harvest ended on a record-yielding note. April PDSI was among the highest on record in the
Midwest and abundant summer rains kept the moisture levels up.
But this can also lead to disaster if summer moisture is excessive as it was in 1993, which combined with the extremely wet start,
drove down corn yields to well below average levels.
The most optimal yields are achieved when the corn growing season starts out under completely neutral conditions not wet or dry
and ends in the exact same way. This happened in 2004, which was one of the United States best corn harvests of all time.
TEMPERATURE MATTERS, BUT LESS?
Some of the excellent and terrible corn yields in the United States were also driven in part by the summer temperature patterns in
addition to the moisture fluctuations.
In general, corn typically produces the best yield under moderate daytime temperatures with a distinct cooling at night. The
nighttime cooling is important for balancing risks if the days are hotter than normal, and warm nighttime temperatures have
damaged yield in the past.
CPC predicts that May will be on the warm side in the Eastern Corn Belt and near normal in the Upper Midwest and Plains. But the
forecast calls for above average temperatures for almost the entire country in June and July .
Yet warm temperatures by themselves may not warrant red flags.
Last years harvest was a great example. Some of the warmest nighttime temperatures in many years did not stop yields from
speeding past market expectations to new records, boosting the credibility of the old adage rain makes grain.
Soybeans hit 3-week high on dollar weakness, short-covering

Chicago soybean futures climbed for a second straight session on Monday to a three-week high with a weaker dollar and short-
covering by investors driving the market higher.
Corn and wheat rose as grain markets recouped last sessions decline, although improving U.S. weather and ample world supplies
kept a lid on prices.
The most-active soybean contract on the Chicago Board Of Trade was up 0.6 percent at $9.66-3/4 a bushel. Earlier in the session, it
climbed to $9.68 a bushel, its highest since March 30.
19
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Corn advanced 0.8 percent to $3.66-1/2 a bushel, having closed down 0.1 percent in the previous session. Wheat gained 0.8 percent
to $4.24-1/4 a bushel after declining 0.2 percent on Friday.
Todays trade is driven mainly by dollar weakness, said one agricultural commodities analyst.
The focus is on U.S. planting. We also have speculators holding large net short positions and that has left the market vulnerable to
short-covering.
Large speculators increased their net short positions in CBOT corn futures in the week to April 18, regulatory data released on Friday
showed.
The Commodity Futures Trading Commissions weekly commitments of traders report also showed that non-commercial traders, a
category that includes hedge funds, increased their net short positions in CBOT wheat and soybeans.
But on Friday, funds were net sellers of wheat and corn contracts, while they were net buyers of soybeans, soymeal and soyoil.
The euro scaled five-month highs against the dollar in early Asian trading on Monday after the centrist candidate swept to victory in
the first round of the French presidential election, reducing the risk of an anti-establishment shock in the final round.
A weaker dollar makes the greenback-priced U.S. commodities cheaper for foreign buyers.
While corn is likely to face pressure as U.S. planting weather improves while rains in the Plains are expected to benefit the hard red
winter wheat crop.
Statistics Canada pegged the countrys all-wheat area at 23.2 million acres, down 0.1 percent from last year. The estimate was bigger
than what traders and analysts expected. Canola seedings were forecast at a record 22.4 million acres.
Farming agency FranceAgriMer said on Friday that 85 percent of the French soft wheat crop was good to excellent in the week to
April 17, down from 89 percent a week earlier in the second successive weekly decline.
Grains prices at 0313 GMT
Contract Last Change Pct chg Two-day chg MA 30 RSI
CBOT wheat 424.25 3.25 +0.77% +4.43% 425.57 32
CBOT corn 366.50 2.75 +0.76% +2.45% 362.37 44
CBOT soy 966.75 6.00 +0.62% +2.11% 966.53 59
CBOT rice 9.82 $0.05 +0.51% -0.30% $9.95 31
WTI crude 49.85 $0.23 +0.46% -0.84% $50.09 34
Currencies
Euro/dlr $1.084 $0.012 +1.09% +1.20%
USD/AUD 0.7555 0.001 +0.17% +0.39%
Most active contracts
Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight RSI 14, exponential
Best Regards,
K S Raja
for Fortune Marine Services
Mob: +91-75500 77022 (WhatsApp & Viber) & +971-52 128 1800
Email: circular@fortunems.com & commercial@fortunems.com
Web: www.fortunems.com
Skype / MSN Id: fmsindia@live.co.uk (for chat only)
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Fortune Marine (I) Services - Shipping News As On 25.04.2017

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Bunker index as on 25/04/2017, Tuesday:

Singapore 306.50 - 333.50 - 482.50 - 2017-04-25

Rotterdam 279.00 - 307.50 - 442.50 - 2017-04-25

Fujairah 302.50 - 370.00 550.00 - 2017-04-25

Busan 330.00 - 345.00 - 510.00 - 2017-04-25

Fiona Pounds: Valid tender of Notice of Readiness

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Atlantic Basin crude sails for Asia after STS transfers

Dry Bulk FFA: Capesize Back On Bullish Mode

Good days ahead for the global dry bulk market

Hamburg 380 CST bunker fuel at five-week high on tight supply

Maersk Strengthens Ties Between African And Japanese Customers

Major shipping nations join forces to promote digital certificates

Maritime: FG wants strong shipping lines for Africa

Fiona Pounds: Valid tender of Notice of Readiness

Police block farmers protest against planned Nicaragua canal

Cargo traffic in 5 AP minor ports sinks

Trumps America to Win as China Stumbles, Steel Veteran Says

European stainless steel surcharges hit four-month lows in May

Soybeans hit 3-week high on dollar weakness, short-covering

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