Wednesday, December 8, 2021

Iron ore price rockets as China imports hit highest in 16 months 

Iron ore price surged on Tuesday after customs data showed China’s iron ore imports rose 14.6% in November from a month earlier to hit their highest since July 2020.

The world’s biggest consumer of iron ore brought in 104.96 million tonnes last month, up from October’s imports of 91.61 million and were also up 6.9% from November 2020, data from the General Administration of Customs showed.

According to Fastmarkets MB, benchmark 62% Fe fines imported into Northern China were changing hands for $111.34 a tonne, up 8.8% from Monday’s closing.

iron ore price
Source: Fastmarkets

“November imports data could be affected by the customs clearance factor,” said Tang Binghua, an analyst with Founder CIFCO Futures in Beijing, adding that shipments and arrivals of iron ore did not change significantly in recent months.

“But it is unlikely that high levels of imports will continue, as consumption is weak after China stepped up output controls on mills during the heating season and ahead of the Winter Olympics.”

“The surprise in import growth was driven by a rebound in commodity volume, probably reflecting improving infrastructure capex demand as local governments stepped up stimulus toward the turn of the year,” said Michelle Lam, greater China economist at Societe Generale SA in Hong Kong.

Stocks of imported iron ore at Chinese ports grew for 10 straight weeks, jumping last week to 155.5 million tonnes, the highest since mid-2018, data from consultancy Mysteel showed.

In the first 11 months of the year, China imported 1.04 billion tonnes of iron ore, down 3.2% from the corresponding period a year earlier.

China’s total imports grew almost 32% to about $254 billion. Economists had forecast imports to increase by 21.5%. 

Exports also rose 22% in dollar terms from a year earlier to almost $326 billion.

(With files from Reuters and Bloomberg)

Kudlow: Save America, stop Putin

Tuesday, December 7, 2021

West Africa: where have the pirates gone?


Featured Image 

The Gulf of Guinea has been the global epicentre of maritime crime and piracy for some time now. However, throughout 2021 the well-established trend of increasing incidents, often involving the violent armed boarding of vessels and the kidnap and ransom of crews, has declined significantly.  

Such a precipitous decline in incidents is welcomed, however, increasingly this is being met with claims that the risk to commercial operations throughout the Gulf of Guinea has also lessened. In this month's Metis Insights, Dryad Global's Head of Intelligence Munro Anderson shares his analysis.

The importance of risk-based decision making for all commercial operators within the Gulf of Guinea means that it is vital that sudden and steep changes in trends of incident data are examined in detailIndeed, by using a simple logic-based investigation of available maritime security data, it is apparent that the basis for such a decline is likely to be fragile and conditional upon loosely correlated actions, strongly indicating the fragility of any assessment that correlates a reduction in threat with a decline in incidents.  

Access Dryad Global's Metis Insights latest report for the full analysis:

Monday, December 6, 2021

Inside Nigeria's Biggest Slum (beyond crazy)

Shell Completes Sale of its Permian Business to ConocoPhillips 

Shell Enterprises LLC, a subsidiary of Royal Dutch Shell plc, has completed the sale of its interest in the Permian to ConocoPhillips for $9.5 billion in cash.

The agreement covers the sale of Shell’s 225k net acres and existing production of around 175 thousand barrels equivalent per day.

As noted in the announcement of the agreement for the sale of Shell’s Permian business, this deal reflects Shell’s focus on value over volumes as well as disciplined stewardship of capital. This transaction was made possible by the Permian team’s outstanding operational performance and provides excellent value to our shareholders through accelerated cash delivery and additional distributions.

As previously announced, the cash proceeds from this transaction will be used to fund $7 billion in additional shareholder distributions with the remainder used for further strengthening of the balance sheet. The first tranche of additional shareholder distributions will be in the form of share buybacks of up to $1.5 billion and will commence on December 2, 2021. The form and timing for distributing the remaining $5.5 billion will be announced in early 2022. These distributions are in addition to our shareholder distributions in the range of 20-30% of cash flow from operations.

Thursday, December 2, 2021

European shipowners call for further action in the Gulf of Guinea 

Latest incident involving Danish frigate highlights severity of piracy threat in the Gulf of Guinea.

European shipowners are extremely concerned about piracy attacks in the Gulf of Guinea. The latest incident in South Nigeria, which involved a suspected pirate vessel and Danish Frigate Esben Snare and resulted in loss of life, only serves to further highlight the severity of the piracy threat in the Gulf of Guinea.

The situation in the Gulf of Guinea has been a top priority for the European shipping industry in the past years. The number of piracy incidents and level of violence cause great concerns for commercial shipping and for the safety and security of seafarers sailing in the area”, stated ECSA’s President Claes Berglund.

ECSA continues to fully support the EU’s activities in the Gulf of Guinea, including the Coordinated Maritime Presence (CMP) mechanism launched in January 2021. The CMP is a positive step to coordinate Member States’ resources in the region, as well as to build cooperation and capacity with the coastal states, as these actions are crucial to address this complex issue. The recent incident however shows that more action is required to address this serious issue and that the presence of naval assets is key to ensure that vessels and their crew can transit safely in the Gulf of Guinea.  

ECSA fully appreciated the commitments already made by some EU Member States to deploy air and naval assets in the region over the past months and years. We would like to strongly encourage Member States to consider this as an issue of high priority and to allocate adequate assets to strengthen maritime security in the Gulf of Guinea”, Mr Berglund continued. “This, together with cooperation efforts and capacity building in the area, is key to safeguard trade and development in the region and globally”, he concluded.