Latest shipping - International Seaborne Market

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published weekly September 19, 2016

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World Grain Market

Relations between Egypt and Russia are sharpening in a part of grain supplies. Meanwhile, the Ukrainian exporters hope that the two Handy-lots of grain shipped this week will be successfully accepted in the Egyptian ports. As expected, traders are unwilling to participate in Egyptian tenders – the last two GASC tenders have failed. Moreover, Romanian Cerealcom requires a $500,000 t refund from GASC. Read more in editorial

Despite the fact that the sales volume of US soybeans has dropped almost twofold over the month, the Gulf of Mexico remains the most inspiring region for shipowners and operators in the Western Hemisphere. However, an active inflow of ballasters to the region impedes any growth in rates. Read more in USG Section

South American grain market stays dull. Prices for Argentine maize have stepped down, but the cargo still remains too expensive compared to the product of the nearest competitor the U.S. Slow exports of maize from the ECSA affect negatively only the Panamax market; the Handysize/Supramax segment stays rather healthy. Read more in ECSA Section

Lower quotes for Ukrainian grain are playing into the hands of both traders and owners of large-tonnage fleet, boosting exports of the commodity from Ukraine. At the same time, Russia will hardly be able to strengthen its position in the market, especially considering the fact that the costs of grain transportation in Handy-lots from Novorossiysk will almost reach the level of freight rates for shipments from Odessa (given the «bunker cartel» recently created). Bunker fuel prices in the Azov Sea ports will stay low, but nevertheless, the owners of sea-river fleet may experience the worst September in the last five years. Read more in Azov - BlSea Section

The sentiment is rather pessimistic in the European grain market. Local traders are unable to execute contracts and thus they are forced to supply wheat of other origin. The U.S. and France play tags in grain world arena. The demand for Handysize/Handymax fleet continues to slacken. Read more in Continent Section

Australian grain export sales have dropped to a minimum, as well as the offer of the cargo in the freight market. Both freight and time-charter rates for Panamax/Post-Panamax shipments ex Aussie & NOPAC are sliding down. Read more in Aussie & NOPAC Section

World Grain Market

September 19, 2016

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World

Competitiveness of grain flows on main destinations Wheat competitiveness in North Africa (bss Algeria)

Maize competitiveness in SE Asia (bss Japan / S.Korea)

Barley competitiveness in Saudi Arabia

Soybeans competitiveness in China

Click here to see detailed data on grain export prices Click here to see current coaster grain freight rates ex Azov-Black Sea, Caspian Sea and Continent Click here to see current Handysize/Supramax grain freight rates ex USG, ECSA, Black Sea, Continent, NOPAC and Australia Click here to see current Panamax grain freight rates ex USG, ECSA, Black Sea, Continent, NOPAC and Australia

World Grain Market

September 19, 2016

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Editorial

Grain situation fuels tension between Russia and Egypt. Ukrainian exporters take hazards The relations between Russia and Egypt are sharpening in the issue of grain supplies. In the meantime, Ukrainian exporters have shipped two Handy-lots of grain to Egypt and now they can only hope that the cargo will be successfully accepted by local port inspection. As expected, the traders are unwilling to participate in Egyptian tenders – the last two tenders announced by GASC failed. We wrote last week that Russia was going to introduce a ban on imports of Egyptian products. And the country has really taken this step. According to the announcement published on the Rosselkhoznadzor official website, the temporary restrictions on imports of Egyptian fruit and vegetables including citrus fruit, tomatoes and potatoes are introduced in Russia starting from September 22. Also, Rosselkhoznadzor is planning to hold talks with the Central Administration of Plant Quarantine of the Ministry of Agriculture and Land Reclamation of Egypt on the issue if the Egyptian products imported into Russia meet the phytosanitary requirements of the Russian Federation. The date of the talks has not been reported yet. In its turn, the Ministry of Agriculture of Egypt has established a committee responsible for verification of both agri products exported to Russia and grain cargoes imported into Egypt. It is to be reminded that few days ago GASC finally rejected a shipment of Russian wheat which was waiting to be loaded in the port of Novorossiysk for several consecutive weeks. The GASC seems to be sure that it will be able to find traders who are ready to supply wheat to Egypt. The two tenders held over the past four days have expectedly stirred little excitement among traders. This proves once again that the policy of zero ergot content is resulting in the lack of supplies. Moreover, Romanian Cerealcom which has previously refused to ship its cargo to Egypt now requires a $500,000 t refund from GASC (the amount has been paid as a guarantee of the delivery). The company declares that it completely removes the blame for the failure of the delivery, as the international standards on ergot content were in effect to the date when the contract with the Egyptian buyer was concluded. Cerealcom is not going to compete in Egyptian tenders until Egypt returns to the international standards on ergot content. Vladimir Lapa, head of State Service for Food Safety and Consumer Protection of Ukraine, said on his page in Facebook that Egypt did not refuse from imports of Ukrainian wheat. So, a 29,000 t lot and a 33,000 t lot of the cargo were shipped to Egypt last week. Further, Vladimir Lapa said that Ukraine had not received any official notification from Egypt about the ban, and Ukrainian traders were ready to continue supplies of wheat to this market even following the new requirements. Further shipments of Ukrainian products to Egypt would depend on whether the cargoes faced problems in the Egyptian ports, he added. According to ISM experts’ opinion, Ukrainian wheat might contain less ergot than the Russian product, but sellers still cannot guarantee zero ergot content and take considerable risks supplying the cargo to Egypt.

World Grain Market

September 19, 2016

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USG

___Grain market overview & news_______________________ Soybeans remain number one in US grain exports Export prices dynamics, $/t The trade has slowed down in the U.S. grain market primarily due to holidays in China. Prior to holidays, Chinese buyers purchased several lots of soybeans with the delivery in October – November. In particular, the USDA has confirmed sales of a total of 110,000 t of the cargo to China this week. The quote for soybeans has dropped by $14/t to $393/t FOB. The demand for the U.S.-origin maize can be called moderate. Moreover, the cargo sees a sharpening competition with the Ukrainian product in the global market. It is worth noting that Ukraine is one of the world major players in maize segment, and the country is now ramping up export sales, as the harvesting campaign is gaining pace. The price for maize has decreased by $1/t to $163/t FOB US Gulf. The buying interest in wheat of the U.S. production is dull. The price for SRW wheat has fallen by $3/t to $183/t FOB, while that for HRW wheat by $1/t to $193/t FOB.

Sales of US soybeans fell almost twice compared to mid-August In September 2-8, the U.S. grain traders sold abroad up to 545,900 t of wheat (compared to 797,000 t previous week), 1.07 million t of maize (1.1 mt previous week) and 1.02 million t of soybeans (1.8 mt previous week). A total of 642,000 t of soybeans accounting for 63% of the overall weekly volume will be headed to China. Maize will be shipped to South Korea (198,000 t), Colombia (171,000 t), Chile (93,600 t), Peru (90,800 t) and Japan (86,500 t). Japanese buyers acquired some 91,200 t of wheat. Up to 68,500 t of a similar product will be exported to the Philippines, 64,800 t to Sri Lanka and 55,000 t to Argentina.

USG

___Freight news, heards & fixtures_______________________ TCT rates for grain shipments ex USG slightly up with voyage ones holding stable USG seems to be the most attractive region for the time being. Brokers report strong cargo flow, though the rates have not increased significantly so far. According to ISM sources, an excessive number of vessels competing for shipments of US cargoes impedes a steady rates’ increase. Almost all the carriers open in Cont/Med are competing for cargo transportation ex USG to the Far East. A lengthy list of ballasters heading from SEAsia and Indian Ocean additionally sharpens the competition, as the owners of ballasters are actively considering the options of shipments ex USG. However, the owners have managed to raise the rates slightly. Thus, a 83,000 dwt vessel (IFO consumption of 25.5 t per day at a speed of 12.5 knots) has been chartered at $10.7k daily + $250k bb bss dely USG redel Spore-Japan with early October laycan dates, while in the beginning of last week, the average level of TCT rates for Kamsarmax carriers with good specs was about $10.5-10.6k daily + $250-260k bb. Note that in the end of the week, a Kamsarmax vessel has been chartered at $10.3k daily + $230k bb bss dely USG redel FEast with September 2130 laycan dates (the vessel is moving in ballast from China via the Panama Canal). Voyage-basis deals for transportation of Panamax-lots of grain from the Gulf of Mexico to China via the Panama Canal with early October laycan dates are negotiated at $28/t.

World Grain Market

September 19, 2016

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USG Players are very optimistic about the future trends in the regional market, though they need to see a very strong number of fresh cargoes in order to be sure in noticeable improvements. Brokers say that Q4 looks very strong in terms of shipments ex USG. That is why almost all the operators are now fixing the ships bss dely ECSA with chopt USG.

Soybeans (sf 50`), 55-60,000t, NOLA - North China (1 port) , $/tonne

Time-charter-trip rates, $/day

Supramax & Handysize segments keep softening due to lack of grain requests in USG Supramax/Ultramax owners are facing lower rates given the shortage of grain offers in the market. At present, there are only a few requests for Supramax/Ultramax transportation of US agricultural products from the Gulf of Mexico to China (with late September-October laycan dates) and the Mediterranean countries (with late September laycan dates). The inflow of ballasters from Continent, NCSA, N.Brazil and WCSA to the USG puts downward pressure on rates. According to brokers, the rates for Supramax/Ultramax fleet chartered for grain transportation bss dely USG redel Spore-Japan now amount to $11.5-13.5k daily, down from $15-16k daily several weeks ago. The contract for a 56,000 dwt vessel bss dely USG redel Spore-Japan has been reportedly concluded at $12.25k daily. The owners want to get about $30-31/t for shipment of a Supramax-lot of grain from the Gulf of Mexico to China, while the charterers are ready to pay at best $27-28/t. Handysize segment is still suffering from the shortage of cargoes. Handysize vessels can be chartered at $10k daily bss dely USG redel WCSA and at $8-9k daily bss dely USG redel Spore-Japan. The rates for such vessels chartered for transatlantic shipments amount to about $6-7k daily. Carrying a Handysize-lot of grain from the Gulf of Mexico to Mexico is quoted by brokers $12-13/t.

Soybeans (sf 50`), 45-50,000t, USG - Rotterdam, $/tonne

World Grain Market

September 19, 2016

Time-charter-trip rates, $/day

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ECSA

___Grain market overview & news_______________________ Drought strikes Brazil, triggering concerns about safrinha harvest Brazil now experiences an acute shortage of maize and soybeans in the home market, as local farmers continue to postpone sales, pinning their hopes on higher quotes for the above types of grain. Indicative prices for Brazilian maize have stepped down by $3.5/t to $180-181/t FOB Paranagua, while those for soybeans have plunged by $25.5/t to $403-406/t on the same basis. Chinese buyers have acquired several lots of Brazilian soybeans of the new crop this week; the offer price for the commodity with the delivery in February has been voiced at $383/t FOB Paranagua. Many regions in Brazil are now suffering from drought. Meteorologists advise farmers to postpone sawing of soybeans, as it will hardly rain until mid-October. Neither quality nor quantity of the future harvest is a matter of concern for market participants, as the delay in sowing campaign will hardly affect these figures. In the meantime, there is a threat that the significant delay may affect the second crop of soybeans (safrinha).

Export prices dynamics, $/t

Argentine maize remains uncompetitive against U.S. one Quotes for Argentine maize have dropped by $6.5/t to $170-171/t FOB UpRiver this week, but the cargo remains uncompetitive against the cheaper U.S. product. The volume of Argentine maize available for exports is rather small. The demand for wheat is quiet in foreign markets despite attractive prices for the commodity. So, wheat with 12% protein content to be shipped in January is estimated at $175/t FOB UpRiver ($4/t down). Wheat with 10.5% protein content with the delivery in same month is offered at $158/t FOB UpRiver ($6/t down). Quotes for soybeans to be shipped in April have slumped by $26/t to $373-375/t FOB UpRiver.

ECSA

___Freight news, heards & fixtures_______________________ Panamax/Kamsarmax rates ex ECSA under pressure so far Panamax/Kamsarmax segment remains under pressure in the ECSA. Players reported some positional improvements and short-lived spike in TCT rates on f/h routes in the end of last week, though the owners now fail to reach such a level of rates. The time-charter for LME vessels bss dely ECSA redel Spore-Japan is quoted by brokers $7.5k daily + $250k bb on average. Kamsarmax owners want to get $7.7-8k daily + $270-300k bb. According to our sources, the deal for a Kamsarmax vessel bss dely ECSA redel Spore-Japan is negotiated at upper $7’s k daily + upper $200s k bb. On the voyage-basis, carrying a Panamax-lot of Brazilian grain to China still costs $17.5/t.

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September 19, 2016

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ECSA Maize (sf 52`), 60,000t, Santos - North China (1 port), $/tonne

Time-charter-trip rates, $/day

Transatlantic rates for ECSA grain shipments hold steady The rates for Panamax/Kamsarmax cargo transportation from the South American ports on transatlantic routes remain stable with just a few fresh grain cargo offers. The time-charter for Panamax/Kamsarmax fleet bss dely ECSA redel Skaw-Passero is quoted by brokers within $7-8k daily. A 77,000 dwt vessel has been chartered at $7.5k daily bss dely ECSA redel Continent with September 23-26 laycan dates. Similar deal for a Panamax carrier is negotiated at $7k daily. Shipping a Panamax-lot of grain from Argentina to the Mediterranean ports may cost $18-19/t. According to brokers, Supramax vessels can be chartered at $8-8.5k daily for transportation of grain bss dely ECSA redel Continent and at $9-9.5k daily for shipment bss dely ECSA redel Med depending on vessel size. An Ultramax carrier has been chartered at $9k daily bss dely ECSA redel Continent (according to other data, the rate has amounted to $9.25k daily). A Supramax-lot of grain from Argentina to Algeria given very high declared l/d rates (9000x/8000x) has been fixed at $19.5/t, which is equivalent to $9.5k daily for a Supramax vessel. The time-charter rates for Handysize fleet bss dely ECSA redel Skaw-Passero amount to $5.5-7k daily depending on vessel size. A 30-37,000 dwt vessel can be chartered at $8-9k daily bss dely ECSA redel WCSA.

Supramax ECSA market still healthy with rates holding steady According to ISM sources, the situation remains favorable for Supramax/Ultramax owners in the South Atlantic. Brokers report large number of requests for both F/H and T/A shipments of grain cargoes. There are the requests for transportation of agricultural products to Israel, PG-Japan range, Skaw-Passero, Morocco, Spanish Med, South Africa. The owners are holding rates at good levels amid shortage of fleet in ECSA. The owners

Soybeans (sf 50`), 45-50,000t, Santos - South China (1 port), $/tonne

World Grain Market

September 19, 2016

Time-charter-trip rates, $/day

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ECSA of Supramax vessels insist on $11.5k daily + $150k bb bss dely ECSA redel Spore-Japan. Such deals are quoted by brokers at $10k daily + $100130k bb. Ultramax carriers can be chartered at $11-11.5k daily + $130-150k bb bss dely ECSA redel Spore-Japan. The deal for a Supramax ship bss dely ECSA redel Bangladesh has been signed at $10.4k daily + $130k bb. The contract for an Ultramax vessel bss dely ECSA redel SEAsia with midSeptember laycan dates has been concluded at $11.25k daily + $140k bb. A 45-50,000 t lot of grain from Argentina to Indonesia (two discharge ports) has been fixed at $28.75/t.

Argentine grain line-ups statistics // week 37 Up to 86,000 t of wheat are being loaded or are awaiting to be loaded in Argentine ports as of September 14. Out of the volume, around 76,000 t of the cargo will be headed to Brazil. The overall volume of maize to be loaded amounts to 1.065 million t, out of which 84,000 t will be exported to Algeria, 210,000 t to Vietnam, 93,000 t to Brazil, 89,000 t to South Africa and 40,000 t to Egypt. Up to 587,400 t of soybeans are waiting their turn to be shipped from the Argentine ports. Some 479,400 t of the cargo will be headed to China.

Azov - BlSea

___Grain market overview & news_______________________ Loss of Egypt and Turkey to hit hard Russian grain market The trade is exceedingly dull in the Russian grain export market in mid-September. This also applies to wheat segment, as exports of the cargo to Egypt are suspended due to tight requirements to the quality of imported product. As for another major buyer Turkey, the country enjoys quite a heavy harvest this grain season. Supplies of grain to the markets which were traditional for European traders are unable to offset a downfall in demand. Moreover, prices for Russian wheat with 12.5% protein content stay rather high despite recent decrease. So, the cargo is now available at $165-167/t FOB Black Sea ($2.5/t down) and $148-150/t FOB Azov Sea ($2/t down). Sales of feed wheat are sporadic given stiff competition in the market. Similar to last week, the product costs $153-154/t Black Sea and $127-132/t FOB Azov Sea. No deals for the supply either barley or maize have been reported this week. Prices for barley are voiced at $146-148/t FOB Black Sea ($1.5/t down) and $130-136/t FOB Azov Sea (unchanged). The nominal quotes for maize have stabilized at $170-171/t FOB deep-water ports and $151-153/t FOB shallow terminals.

Export prices dynamics, $/t

After many talks and rumors Russia finally to introduce zero wheat duty The Russian government has approved the proposal of the Ministry of Agriculture to remove wheat export duty starting from September 15, 2016. The information was published in a draft government decree. According to the document, the implementation of zero export duty on wheat till July 1, 2018 is aiming at breaking off the oppressive downward price trend in the domestic grain market and boosting wheat exports by reducing the risks of long-term contracts. According to ISM analysts, however, the removal of the duty will hardly affect the export volume of wheat, as well as the competitiveness of Russian product in foreign markets, as recently the duty has only amounted to RUB 10/t. In addition, market participants have not been surprised, as rumours about such decision have been in the air for already quite a long time.

World Grain Market

September 19, 2016

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Azov - BlSea It is to remind that in MY 2016-17 Russia expects heat harvest to reach 110 million tonnes and even 116 mt in case of favourable weather conditions, while the domestic consumption will hardly overstep 74 mt. So, the volume of wheat to be harvested this season will be enough to insure the food security in the country, as well as to provide exports of 35-40 mt.

Ukrainian grain exporters enjoy lively trade Export prices dynamics, $/t Ukrainian grain traders are actively selling both milling and feed wheat. Southeast Asian buyers show steady demand for feed wheat, while milling wheat is the most popular cargo for exports to India, Bangladesh and the Mediterranean countries. Prices for the above types of grain have stepped down in mid-September. So, wheat grade 2 is now estimated at $161-162/t FOB ($1.5/t down), wheat grade 3 at $158-160/t FOB ($3.5/t down), feed wheat at $152-155/t FOB ($1/t down). Barley is offered for exports in small lots only, as the major part of the product has been already sold out. After a $6/t decrease, the cargo can now be purchased at $142-146/t FOB. The demand for Ukrainian maize has strengthened again, stirred up by news about good quality of the product of the new crop. The cargo with shipments in October - November is offered at $164-168/t FOB ($0.5/t down).

Kazakh grain market: Limited domestic supply to affect export sales Kazakh grain exporters report the improving demand for wheat in the markets of Turkmenistan, Uzbekistan and Kyrgyzstan. However, most traders refrain from signing export deals amid sluggish supply of the commodity in the home market. The segment of barley sees a sheer lull. Wheat grade 3 costs $165-175/t FOB Aktau and $155-165/t DAP Saryagash. Barley is quoted at $125-135/t FOB Aktau ($2.5/t down) and $120-130/t DAP Saryagash (unchanged).

Azov - BlSea

___Freight news, heards & fixtures_______________________ Downward pressure on Supramax rates ex BlSea to SE Asia continues Supramax cargo traffic from BlSea ports remains limited. The surplus of available vessels is making the owners make further concessions. This week, the time-charter deal for a Supramax ship bss dely passing Canakkale via BlSea redel Spore-Japan has been signed at only $9.5k daily. An Ultramax carrier has been chartered at $10.5k daily on the same basis. The contract for a Supramax vessel bss dely Marmara redel USG has been fixed at $4.75k daily. The rates for Supramax fleet chartered for intermed-shipments bss dely passing Canakkale now amount to $6-6.5k daily. On the voyage-basis, carrying 50,000 t of wheat from Ilyichevsk to Bangladesh is negotiated at $24-25/t, which is equivalent to $10.5k daily. Shipping 50,000 t of rebar from Turkey to the UAE is quoted at $21-22/t bss FILO.

World Grain Market

September 19, 2016

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Azov - BlSea Wheat (sf 46-47`), 50,000t, Yuzhny - Indonesia (1 port), $/tonne

Time-charter-trip rates, $/day

Intermed Handysize rates moving sideways

The Handysize segment of the Black and Mediterranean Seas remains rather volatile in mid-September.

According to operators and brokers, the requests for spot shipments are few this week due to holidays in the Muslim countries and weak buying interest in main cargoes. Nevertheless, the shipowners are trying to be optimistic and seeking to push the rates up, expecting the increase in grain traffic and the return of the North African and Middle Eastern importers to the market. The difference in rates for shipments on the same routes (even shorthaul ones) is now reaching $1-2/t. This week, the charterers are ready to pay $16/t for transportation of 35,000 t of grain from Nikolayev to Libya. Carrying 25-30,000 t of grain from Odessa to Alexandria costs $11-12/t. The deal for shipment of 25,000 t of grain from Nikolayev to the Mediterranean Spain has been fixed at $14.5/t, while another exporters offer $12/t for transportation of a similar cargo lot from Odessa to Spain. Handysize owners want to get $7-7.5k daily bss dely passing Canakkale via BlSea redel EMed, while the charterers offer at best $6k daily.

Wheat, 25,000t, Constanta - Alexandria, $/tonne

World Grain Market

September 19, 2016

Time-charter-trip rates, $/day

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Azov - BlSea Grain traders confidently retain coaster rates in Black Sea A significant surplus of small dwt fleet in the Black Sea allows the charterers to keep the rates at an acceptable level and even to lower them in some cases. For example, a 3,000 t lot of barley (sf 53`) is exported from Nikolayev to the Marmara Sea at $15/t, while the deal for transportation of 3,000 t of maize from Kherson to TBS has been fixed at $13/t this week. A 6,000 t lot of wheat is carried from Reni to the Adriatic ports at $18/t. A 8,000 t lot of maize from Ilyichevsk to Egypt has been fixed at $17/t; the same fee has been charged for transportation of 5,000 t of soybeans (sf 50`) from Nikolayev to Greece. Carrying 5,000 t of grain from Kherson to Ashdod now costs $18-19/t.

Wheat, 5,000t, Odessa - Adriatic Sea ports, $/tonne

Average round voyage TCE, $/day

Bunker fuel suppliers form a club in Novorossiysk port with the prices significantly up ISM has been advised that as of today, usual competitive bunker prices at Novo are not achievable until further notice. Market players report that the suppliers in Novo/Tuapse/Murmansk are having a club, which means all inquiries are agreed between them. ISM sources say all inquiries are equally shared between them, so each supplier gets a stem. The prices are just slightly below those in Istanbul. Moreover, only one supplier offers a price and short validities are given. Current bunker prices in the port of Novorossiysk are as follows: IFO – $230-250/t, MGO – $470/t. The increase in bunker prices will apparently push the freight rates for shipments from the port by $0.25/t up.

Freight rates for sea-river vessels ex Azov Sea seem to have finally reached the bottom Sea-river freight rates for transportation of grain from the Russian Azov Sea ports have dropped by another $1-1.5/t over the week. Most players believe the rates have reached the bottom. At present, grain traders are ready to pay at best $15/t for shipment of 3,000 t of grain from Azov to the Marmara Sea, $27/t – to Lebanon, $29/t – to Alexandria. The owners want to get $30-31/t for cargo transportation to the eastern

Wheat (sf 46-47`), 3,000t, Azov - Marmara Sea ports, $/tonne

World Grain Market

September 19, 2016

Average round voyage TCE, $/day

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Azov - BlSea Mediterranean and $17-18/t for shipment to the Marmara Sea, though eventually they agree to operate at a level close to the charterers’ ideas ($15-16/t for shipment to the Marmara Sea, $28-29/t – to the EMed, $19/t – to EC Greece). The number of new offers for cargo transportation to the Kavkaz port road is also very small. The relevant deals are now negotiated at $8-9/t.

Black Sea grain lineup statistics // week 37 In September 10-16, a total of 750,000 t of grain and its processing products were shipped from Ukrainian ports to foreign markets, out of which some 491,300 t fell for wheat. Up to 110,700 t of wheat are now heading from Yuzhny to India, another vessels with 70,300 t of the cargo on board is now moving to the Suez Canal. Some 63,000 t of wheat were exported from Odessa to the Egyptian port Said, 34,200 t to Indonesia, 30,000 t to Morocco and 20,800 t to Bangladesh. A 54,400 t lot of wheat will be delivered from Ilyichevsk to Indonesia, a 25,500 t lot to Morocco and the 5,700 t one to the Netherlands. A vessel with 34,500 t of wheat on board is now heading from Nikolayev to the Suez Canal. Another vessel is carrying 27,500 t of wheat to Morocco. Some 14,500 t of wheat were shipped from Berdyansk to Turkey. Up to 3,200 t of a similar cargo will be delivered to the same market from the port of Kherson. A 57,000 t lot of barley will be headed from Ilyichevsk to Egypt, while the 30,000 t one from Odessa to Jordan. Maize was shipped from Kherson to the UK (4,000 t) and Turkey (2,800 t). A 4,900 t lot of soybeans was exported from Yuzhny to Turkey. A 4,500 t lot of soybeans is now being carried from Kherson on the same rout. Rape was exported from Nikolayev to the Netherlands (7,000 t) and Portugal (7,000 t), from Odessa to France (29,000 t) and from Yuzhny to Israel (5,000 t). Meal will be headed from Kherson to Israel (5,500 t) and from Ilyichevsk to Spain (5,000 t). A 2,200 t lot of bran will be delivered from Kherson to the Turkish market. A total of 57,700 t of wheat were exported from the Novorossiysk Commercial Sea Port to Bangladesh, 30,200 t to Morocco and 27,000 t to Yemen. A 60,800 t lot of barley will be moved to Saudi Arabia. The port of Rostov-on-Don handled up to 142,500 t of grain. Out of the volume, around 16,600 t of wheat were exported to Turkey, 8,000 t to Georgia and 3,000 t to Greece. Meal will be carried to Egypt (5,000 t) and Turkey (3,000 t). The port of Azov processed a total of 47,700 t of grain. Some 26,000 t of wheat will be headed to Turkey. Up to 3,300 t of wheat will arrive to Georgia, 3,200 t to Romania and 3,100 t to Italy. A 2,900 t lot of bran and a 2,800 t lot of barley were shipped to Turkey and Romania respectively.

Continent

___Grain market overview & news_______________________ Will EU grain traders stem problems and execute contracts? Export prices dynamics, $/t The sentiment is pessimistic in the European grain market, as traders who had sold wheat long before the harvesting campaign started, are now unable to execute the contracts. They are desperately trying to find way out of such a strained situation. For example, some of them are negotiating smaller scope of supply, while others are seeking to ship the product from alternative sources. The offer prices are unreasonably high, buyers say. Nevertheless, the suppliers are unwilling to make any concessions citing the scanty profits. Such policy brings no fruit, as the world market is flooded with Black Sea grain offered at more attractive quotes. At present, the EU-origin wheat is estimated at $179-182/t FOB Rouen ($1/t up) and $182187/t FOB German ports ($0.5/t up). Prices for feed wheat hold steady at $169-170/t FOB Rouen. German barley is quoted at $161162/t FOB Hamburg/Rostock. Prices for French product have inched down by $0.5/t to $150-153/t FOB Rouen/La Pallice. It should be noted that Strategie Grains agency has reduced the forecasted wheat production in the EU countries by 1.4 million t to 136.5 million t; the share of feed wheat in the overall harvested volume is projected to reach 41% against 29% last season.

World Grain Market

September 19, 2016

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Continent US and France play tags in grain world arena A 49,500 t lot of French wheat (the third shipment within this season) is expected to be shipped to the U.S. Meanwhile, over the past couple of months US grain traders have sold two 55,000 t lots of HRW wheat to Algeria, which used to be a traditional sales market for French grain. At present, the vessel Kyra Panaghia is expected to arrive in the port of Rouen to be loaded with 30,000 t of wheat, and then to move to Dunkerque to take 19,500 t of the cargo onto the board. According to ISM experts, the freight rates for above shipment amount to $17-18/t. In MY 2016-17 France exported almost 101,800 t of feed wheat to the U.S. buyers. All supplies, including the current one, are made by trader Glencore. It is to be reminded that France suffers considerable losses in grain harvest this year due to unfavourable weather conditions in the country. This forces local traders to supply grain of other origin to perform their obligations under the previously concluded contracts.

Grain export/import volumes from/into EU In September 8 to 14, the European Commission issued export licenses for the supply of 371,600 t of wheat (compared to 520,800 t in September 1-7), 71,700 t of barley (against 39,080 t previous week) and 67,900 t of maize (53,400 t in early September). The Commission allowed imports of 175,300 t of maize into the EU (against 124,900 t previous week).

Continent

___Freight news, heards & fixtures_______________________ Shipping fees for grain ex Baltic/Continent still going down The number of new spot offers of grain for transportation from the Baltic&Continent ports remains small. The owners occasionally receive the requests for shipments of agricultural products from the Baltic ports to North Africa; there are also several requests for grain shipments to the ARA ports. Shipments from France are rare. The news that Algeria purchased a large volume of wheat with shipment from the regional ports in October/November has added some optimism to the freight market, though spot rates for Handysize/Supramax transportation of grain keep decreasing so far. The demand for such fleet remains weak. Carrying 30,000 t of grain from Poland to Algeria with late September laycan dates is quoted by brokers at $15/t. The transportation cost of about 50,000 t of grain from Lithuania to the ARA ports is negotiated at $11-12/t. The timecharter for a 30,000 dwt vessel bss dely Baltic redel Med is quoted at about $8k daily. The rates for Supramax fleet bss dely Continent redel Feast amount to $10k daily on average.

Wheat (sf 47-48`), 25,000t, Rouen - Algiers, $/tonne

World Grain Market

September 19, 2016

Time-charter-trip rates, $/day

www.me-freight.com

14

Continent French grain line-ups // week 37 Grains loading in French ports: Cargo

Volume

Destination

Charterer

Port of loading

wheat

34 000

Algeria

Eurafrique

La Pallice

wheat

3 000

Canaries

Soufflet

La Pallice

durum

6 600

Italy

Invivo

Fos-sur-Mer

maize

5 000

UK

n/a

Bordeaux

...

...

...

...

...

Click here to see more grain line-ups Note that we do not publish full line-ups in order not to overload the pdf-file.

Australia & NOPAC

___Grain market overview & news_______________________ Australia expects five-year heavy harvest of wheat, but adverse weather may ruin plans Export prices dynamics, $/t Exports of Australian agri products have dropped to the minimum. Local market players hope that foreign buyers will resume purchases in the next couple of months. But this will totally depend on the quality of grain of the new crop. Current information is contradictory. On the one hand, the forecasts predict the five-year heavy harvest of wheat in the country, which may reach some 26-31 million t. On the other band, large areas of fields have been flooded after steady rains hit the east of Australia; this may deteriorate the quality of crops and reduce the harvested volume. At present, wheat is available at $200206/t FOB WA and $195-200/t FOB SA ($1/t down in both cases). Barley is offered at $160-164/t FOB WA ($3/t down) and $153 -156/t FOB SA ($4/t down).

World Grain Market

September 19, 2016

www.me-freight.com

15

Australia & NOPAC

___Freight news, heards & fixtures_______________________ Players report fewer fixtures for Australian wheat Barley (sf 47-49`), 55,000t, Kwinana - South China (1 port), $/tonne Grain shipments from Australia have slowed down significantly after a surge in late August. The number of new requests is now very small in the market given weakening demand from the importers, who were purchasing wheat during the period of lower prices. The deal for transportation of 50,000 t of wheat from Geelong to Indonesia (two discharge ports – Jakarta and Surabaya) with October 10-15 laycan dates is negotiated at $12/t. At the same time, carrying 50-55,000 t of barley from western Australia to southern China is quoted by brokers at $11/t. At present, trade is slack due to increasing prices for wheat, though traders expect the cargo flow to perk up closer to December, when the new crop grain starts appearing in the market. Note that the harvest of wheat is projected to amount to 28 million t this season (the highest over the last 5 years) unless the El Niño harms the crops.

Panamax/Post-Panamax TCT rates ex NOPAC ports sliding down According to ISM sources, Panamax/Post-Panamax time-charter rates for shipments ex NOPAC ports are sliding down given limited spot cargo offer. The rates have dropped by $0.25-0.3k daily compared to the last week. The situation in the Pacific region is also affected by a general trade slowdown caused by holidays in several countries of the region. At present, the time-charter for Panamax fleet bss DOP dely N.China via NOPAC redel Spore-Japan is voiced by brokers within $5.5-6k daily. A Kamsarmax carrier has been chartered at $5.8k daily bss DOP dely Incheon via NOPAC redel Spore-Japan. The deal for a similar ship bss DOP dely Japan via NOPAC redel Spore-Japan has been signed at $6.75k daily. However, major players are optimistic about Q4-2016, expecting brisker shipments of new crop grain from the north-western US ports. Note that Chinese importers have been actively buying US soybeans during the last few months (in particular, the cargoes with shipments in October-December). According to ISM sources, the volume of soybean exports from the US north-western ports to China will grow from 0.6 million t in September this year to 3.4 million t in October. The export volume is expected to amount to about 2.9 million t in November, and 2.3 million t in December.

World Grain Market

September 19, 2016

www.me-freight.com

16

Latest grain tenders Latest grain tenders and trades // 36 week 2016 year Closed tenders: Country

Japan

Buyer

Ministry of Agriculture

Commodity

milling wheat

feed barley

Consigment, Origination ths. tonnes 34.5

hard red winter

28.6

dark northern spring (min 14%)

16.6

USA

western white

8.45

hard red winter

Price

Dates of loading / unloading

loading 21.10.-20.11.16

n/a

arrival by 31.12.16

25

Canada

western red spring (min 13.5%)

36.1

Australia

standard white

0.,35

n/a

n/a

n/a

loading by 31.12.16, arrival by 28.02.17

n/a

$166-168/t C&F

October shipment

n/a

$191.42/t C&F

shipment 10-29.11.16 (from the US Gulf or Brazil) or 25.11.-14.12.16 (from the US Pacific North West coast)

Algeria

State grains agency OAIC

feed barley

110

Black Sea region, probably Ukraine

Taiwan

Maize Industry Procurement Association MFIG

maize

60

USA or Brazil

World Grain Market

Quality indicators

September 19, 2016

loading during January 2017

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Sales: Anna Bavbekova [email protected] tel. +38 056 3757917 Head of Freight Analytic Department, Chief Editor, Pavel Sosnovsky Senior Grain Market Analyst, Maria Belikova Feedback: We welcome any comments on our publication. Please contact Pavel Sosnovsky [email protected] or Maria Belikova [email protected] Website: www.me-freight.com

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