Bulk Carriers – Argentina agri exports

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Argentine farmers are expected to harvest 51 million tonnes of soy in the 2017/18 season, according to the Buenos Aires Grains Exchange, due to drought that resulted in revising its preliminary estimate of 54 million tonnes. Based on short term weather forecasts that indicate no relief for the areas already suffering from dryness, the crop estimate was reduced by 3 million tonnes, while the previous marketing year Argentina produced 57.5 million tonnes of soybeans.

Bulk Carriers – Recent developments in Chinese Shipbuilding

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China State Shipbuilding Corporation’s listed units CSSC Holdings and CSSC Offshore & Marine plan to bring in major investors to inject about 10.2 billion yuan ($1.6 billion) of capital into four Chinese shipyards. The planned capital increases are part of the government’s wider “supply-side structural reform policy”. According to an announcement, China CSSC Holdings Ltd is bringing in investors, such as China Life, CPIC Property and PICC, to invest 5.4 billion yuan in Shanghai Waigaoqiao and Chengxi Shipyard. In a separate statement, CSSC Offshore & Marine Engineering Group Co Ltd said the same group of investors planned to increase the capital of Guangzhou Shipyard International and Huangpu Wenchong by a combined 4.8 billion yuan.

Bulk Carriers – Iron ore production in India is projected to fall in FY18

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Iron ore production in India is projected to fall 15 per cent in FY18 after rising steadily for two successive years since 2014-15 as closure of seven working mines in Odisha and lesser production in Goa will weigh on total output. The cease of operations for seven working iron ore leases in Odisha on January,1 this year will impact production as their combined annual capacity is 20 million tonnes per annum. It is believed that the expected production loss would be reflected in the January-March quarter. Odisha is the country’s largest producer which contributed 102 million tonnes to the pan-India output of 191 million tonnes in last fiscal. Closure of mines in Odisha will have adverse impact on iron ore production, while the output impacted could be around 15-20 per cent according to the Federation of Indian Mineral Industries (Fimi). During this fiscal, iron ore exports stood at 10.11 million tonnes (till August end). Exports are likely to decrease during the current financial year in comparison to previous year 2016-17. The fall in exports will be due to likely less exports from Goa and due to the continuation of export duty of 30 per cent on iron ore of Fe grade above 58 per cent.

Bulk Carriers – Ukranian Black Sea ports developments

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Regarding recent developments at the Ukrainian Black Sea ports, their grain exports capacity increased to 68 million tonnes per year through to the end of 2017 – while at the same time port storage facilities stood at around 3.4 million tonnes. Given the above, export loading capacity expanded by 1.75 million tonnes in 2017. According to domestic industry officials eight grain terminals plan to lift significantly their capacities, increasing their loading facilities for export by around 14 million tonnes just in 2018. It is said that the grain cargo capacities in Ukraine will grow by 27 percent and will amount 4.3 million tonnes while the terminal capacity for grain transshipment will reach 82 million tonnes.

Bulk Carriers – China’s province of Shandong plans to eliminate 10.23 million tonnes of coal capacity

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China’s province of Shandong plans to eliminate 10.23 million tonnes of coal capacity, after the central government criticised Shandong officials for failing to take action to curb coal capacity. The Ministry of Environmental Protection (MEP) issued a statement earlier on the week accusing Shandong of deceiving authorities to evade capacity cuts in the polluting coal, steel, aluminium and chemical sectors. According to MEP total coal consumption in 2015 and 2016 increased by 6.94 million tonnes and 7.06 million tonnes respectively compared to the level in 2012.

Bulk Carriers – China has beaten the annual de-capacity target in the steel industry

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According to data from the National Energy Administration, China has beaten the annual de-capacity target in the steel industry as of the end of October by eliminating 50 Mtpa surplus and outdated steel capacity, adding to a total cutbacks of 110 Mtpa during the two years’ supply-side structural reform. The overcapacity cutbacks significantly improved supply-demand fundamentals in the sector and help loss-making mills swing back to profit. Data of the China Iron and Steel Association showed that the average profit margin of large steel enterprises increased 4.18% in the first nine month from a year ago. Regarding the coal industry, China has achieved the 2017annual de-capacity target of over 150 Mtpa two months ahead of schedule; while in 2016, over 290 Mtpa of overcapacity has been kicked out, 50 Mtpa more than planned. Looking ahead, an official with the Ministry of Industry and Information Technology noted that 2018 is a key year to protect the de-capacity achievements the country got in steel and coal industries and that China will continue to deepen the de-capacity drive in the two sectors and shut down “zombie enterprises” in accordance with the relevant laws and regulations.

Bulk Carriers – Strategie Grains lowers its monthly forecast for EU soft wheat exports

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Strategie Grains lowered its monthly forecast for EU soft wheat exports this season as it factored in stiff competition on world markets and very slow shipments from Germany and Poland. The analyst firm projected 2017/18 soft wheat exports from the European Union at 22.3 million tonnes, down from 22.9 estimated last month and 24.1 exported in 2016/17. Meantime, the agency added that French wheat is also facing stiff competition on its main client markets from Russia and Argentina. Farm office FranceAgriMer cut its outlook for French 2017/18 soft wheat exports outside the European Union earlier on the week for the second month in a row to take account of intense competition on world markets. In its monthly supply-and-demand report the office put French non-EU exports at 9.5 million tonnes, down from 9.9 million tonnes estimated last month.

Bulk Carriers – Indonesia’s drive for self-sufficiency is resulting in record wheat imports

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Basis a note from the USDA, Indonesia’s drive for self-sufficiency is resulting in record wheat imports displacing imported rice and corn. The country’s rise to the second-largest wheat importer has been urged by growth not only for food but also for feed wheat, primarily supplied from Australia and Ukraine. While rice self-sufficiency has nearly been achieved, it has been due to declining rice consumption in the face of affordable wheat-based alternatives more so than higher rice production. However, Indonesia’s record forecast is driven even higher this year (11.5 million tonnes) due to growing feed use. Import restrictions on corn have shrunk imports since 2014/15 turning feed mills to seek lower-priced feedstuffs. Wheat feed use has surged as a result of lower prices relative to domestic corn, in addition to feed use for the burgeoning poultry and aquaculture industries. As a result of ballooning imports, the government has placed restrictions on feed wheat to strengthen and expand domestic corn production. To surpass the feed wheat import restrictions, Indonesia has been importing lower-quality milling wheat to blend in feed supplies As Indonesia continues its quest for self-sufficiency in grains, feeders are likely to remain reactive and agile in this dynamic environment.

Bulk Carriers – Russian grain export capacity

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Regarding the long term export supply of grains in Russia, the country plans to expand its grain export capacity at Russian ports to boost grain shipments by 30 million tonnes annually from 2022, according to the Agriculture Ministry Russia is a major wheat exporter and its total grain exports are expected to hit a record 45 million tonnes in the 2017/18 marketing year, which began on July 1. However, its limited infrastructure has put a brake on further growth. The current modernization of a grain terminal at the Novorossiysk Grain Plant in the Black Sea port of Novorossiisk would double its capacity. Meanwhile, a project to develop Russia’s Black Sea port of Taman and construction of a new grain terminal in Russia’s far east would also increase grain export capacity in the future.