London Metal Exchange News

Port of Amsterdam was awarded an LME certification this week by the London Metal Exchange (LME). From now on, Amsterdam is listed as a goods delivery point for aluminium, aluminium alloy, lead, nickel, tin and zinc. This will enable our terminals and forwarding companies to strengthen their position in the ferro and non-ferro markets for short and deep sea. The application for the certification was submitted by Port of Amsterdam to the London Metal Exchange (LME) in November 2017. The arrival of two ship-to-shore gantry cranes at HCT in the summer of 2017 made this application complete. The certification will become effective 90 days after the first business has been approved by LME. This award contributes to the diversification policy pursued by the Port.

Virginia-based stevedoring and shipping terminal operator T. Parker Host on Friday said it had hired all the staff from CWT Commodities' U.S. team as part of its drive into metals logistics and warehousing. The team of under ten people has joined Host to form Host Logistics, LLC, based in New York, to run warehousing and stevedoring operations. CWT Commodities USA is a unit of Singaporean logistics firm CWT Ltd. Anton Posner, former president of CWT Commodities USA, will be executive vice president, while Margo Brock, vice president at CWT, will be senior vice president, Host said in a statement. CWT Commodities USA was set up almost seven years ago as part of CWT's expansion of its London Metal Exchange warehousing and logistics business.

The crisis in global shipping and a tax exodus by big Greek vessel owners have helped finally seal the fate of London's Baltic Exchange after at least three approaches to buy it over the last six years of its near-three centuries history. Some 95 percent of shareholders voted on Monday in favour of a takeover deal from Singapore Exchange, valued at 87 million pounds ($112.87 million), trumping more than one effort from the London Metal Exchange to snap it up. "For Baltic shareholders it does release value…

The world’s third largest container shipping company initiated a new direct service from the Port of New Orleans to the west coast of South America this week. Marseille, France-based CMA CGM launched its Med Americas service with the arrival over the weekend of the container ship Pomerenia Sky at the Napoleon Avenue Container Terminal. The new service is wholly-operated by CMA CGM vessels and will offer weekly and direct service to San Antonio, Chile; Callao, Peru; and Buenaventura, Columbia.

Total valuation of potential deal at least $113 million; Baltic shareholders key to clinching sale agreement. Singapore Exchange Ltd (SGX) plans to buy one of London's oldest institutions, the Baltic Exchange where shipping rates are published, and urged shareholders on Thursday to support a deal. As the global shipping industry struggles with the worst market conditions for decades, SGX offered shareholders in the privately-owned Baltic Exchange 160.41 pounds in cash per share, for a total 77.6 million pounds ($102 million). Founded in 1744 as a forum for chartering vessels, the Baltic Exchange now produces benchmark indexes for global shipping rates and owns a trading platform for the multi-billion dollar freight derivatives market.

Singapore Exchange Ltd (SGX) is readying a formal offer to buy London's Baltic Exchange following months of discussions that culminated in exclusive talks between both parties, sources familiar with the matter said on Tuesday. Founded in 1744, the privately-owned Baltic Exchange is no longer a forum for chartering vessels but owns benchmark indexes for global shipping rates and provides a trading platform for the multi-billion dollar freight derivatives market. The sources said both sides had reached key milestones for a deal to proceed and that SGX was getting ready to make a formal offer. The Baltic Exchange declined to comment, while an SGX spokeswoman referred to a May statement where it said both exchanges would benefit from new growth opportunities.

Baltic Exchange privately owned by 380 shareholders. The Singapore Exchange (SGX) is in exclusive talks to buy London's Baltic Exchange, which has been at the heart of the global shipping industry for centuries, the two companies said on Wednesday. Founded in 1744, the Baltic Exchange is no longer a forum for chartering vessels but owns benchmark indexes for global shipping rates and provides a trading platform for the multi-billion dollar freight derivatives market. The takeover talks come as the global shipping industry grapples with the worst market conditions for decades after a slump in commodity markets coincided with an increase in the number of vessels, sending freight costs to record lows.

In an interview with Patrik Berglund, the Xeneta CEO says that the introduction of the "commodity" status for the container would benefit both shippers and carriers. Q- In today’s world of Amazon, Alibaba and E-commerce, have container rates (meaning 20-40’dry box) reached ’commodity’ status? Not exactly. There is a major difference between ‘cheap’ and being a ‘commodity.’ Clearly the current rates are very low, and in fact threatening the financial viability of 4-6 ocean carriers, but business cycles, as set by supply and demand, are part of the global economic cycle.

With ultra-low container rates, multiple operators teetering on the brink of bankruptcy and adversarial relationships developing between those shipping goods and the carriers, Xeneta believes the entire container industry must evolve. The Oslo-based benchmarking and market intelligence platform for containerized ocean freight is proposing a solution it says would benefit both shippers and carriers – the introduction of ‘commodity’ status. Container rates have collapsed over the course of the last 18 months.

Talks between the Baltic Exchange and a number of suitors are continuing, but any potential buyer of the business will have to provide assurances that its central role in shipping will not be "undermined", the Baltic's chairman said on Wednesday. On Feb. 26 the privately held Baltic Exchange confirmed it had received a number of "exploratory approaches" after the Singapore Exchange Ltd (SGX) said it was seeking to buy the business. Both statements came a day after Reuters reported the Baltic had held talks with SGX and other potential buyers including CME Group, ICE and Platts. Sources had estimated the Baltic's valuation was $120 million.

The improved sentiment surrounding the outlook for China's demand for natural resources is being reflected by rising imports for some major commodities, but as usual it pays to be wary when interpreting the numbers. Customs data released this week shows strong import growth in the first two months of the year in copper and crude oil, a more modest expansion in iron ore and a surge in imports of alumina and bauxite, the main raw materials used to make aluminium. Taken at face value this lends support to the view that China is heading for a better spring season after a gloomy autumn and winter cast a pall over the outlook for demand in the world's largest consumer of commodities.

Commodities hit 13-year lows before rebounding on Monday after Saudi Arabia's pledge to work toward crude price stability bolstered oil and France's first wheat exports to Indonesia in more than six years helped lift grains markets. Base metals settled near multi-year lows hit while gold traded close to a 6-1/2-year trough. Crude prices rose more than 1 percent after Saudi Arabia said it was ready to work with other oil producing and exporting countries, lending recovery hope to a market that has lost half of its value over the past year. Despite pledges in the past that they would try and steady prices, Saudi Arabia and other big OPEC producers have kept their oil output high to maintain market share. Monday's remarks came as oil prices barely held above 2-1/2-month lows.

London's Baltic Exchange and Chinese state-owned Ningbo Shipping Exchange said on Friday they would collaborate on container indices, the first foray by the Baltic into this segment of the freight market. Sources told Reuters in early October that the London Metal Exchange, which is owned by Hong Kong Exchanges and Clearing , had made an informal approach to the Baltic to acquire it. In a first step, Ningbo's weekly containerised freight index - which tracks rates on various routes - would be published on the Baltic's website, the exchanges said. A Baltic spokesman said it would work with Ningbo to do "more in the container space". Baltic chief executive Jeremy Penn said separately the move underlined its "ever-closer ties with the Chinese market".

Major world stock markets were poised for their biggest weekly advance since 2011 on Friday, as greater investor appetite for riskier assets propelled gains in equities and a surge in commodities and crude oil prices. Declines in the dollar, a bullish oil forecast and giant miner Glencore's pledge Friday to slash world zinc output by 4 percent have lifted beaten-down commodities, with Brent crude oil headed for its biggest weekly rise since March 2009. The U.S. dollar hit a three-week low against the euro as minutes from the Federal Reserve's September policy meeting showed the Fed in no rush to raise interest rates. The MSCI all-country world equity index climbed 0.6 percent, for its eighth daily gain. It was up 4.3 percent for the week, its biggest weekly advance since 2011.

CITIC Resources Holdings Ltd said on Tuesday that metal it owns at Qingdao port may be affected by a probe into suspected fraud, the latest firm caught up in a scandal that has raised broader worries about the risks of metal financing in China. The probe at the Chinese port, where a third-party firm is suspected of using single cargoes of metal multiple times to obtain financing, has also shaken markets amid fears the problems could extend to other ports and force a crackdown on using metal as collateral for finance. The investigation into the status of aluminium and copper products stored at the world's seventh-biggest port may hit the group, CITIC Resources said, sending its shares down by more than 8 percent to their lowest since May 7.

Shaken by a fraud investigation into metal financing in the world's seventh-busiest port, banks and trading houses have been made painfully aware of the risks they face storing commodities in China's sprawling warehouse sector. The probe at Qingdao port centres around a private metals trading firm suspected of duplicating warehouse certificates in order to use a metal cargo multiple times to raise financing. Some banks have asked clients to shift metal, used as collateral for loans, to more regulated London Metal Exchange (LME) warehouses outside China or those owned and operated by a single warehouse firm to limit their exposure. "The banks still haven't looked under the hood," said an executive at a bank involved in commodity financing in China, referring to China's warehousing sector.

Baltex reaches breakeven level since start of 2015; Baltic previously faced broker opposition over platform. London's Baltic Exchange is studying a potential foray into commodities and is open to proposals on tie-ups as other exchanges attempt to boost volumes, its chief executive said. Baltex, the Baltic's digital shipping platform, was launched in 2011 as the first central electronic marketplace for freight forward agreements (FFAs), which allow investors to take positions on freight rates at a point in the future. Since the beginning of this year, the previously loss making platform, has reached break even levels after Baltex became a venue for presenting block futures at the start of December.

The St. Lawrence Seaway reported that year-to-date cargo shipments of more than 24 million metric tons moved through the system for the period March 28 to September 30 – an increase of nearly 5 percent over September 2013. U.S. grain continued its upward trend posting a 14.6 percent increase over the same time last year. “Cargo tonnage moved through the Great Lakes-St. Lawrence Seaway System during the month of September continues to be robust and reflects positively on the economy and the shipping industry,” said Administrator Betty Sutton of the Saint Lawrence Seaway Development Corporation.

Commodity trader Trafigura said its logistics and warehouse unit Impala Terminals has scrapped plans for a metals warehousing joint venture in China and will also exit its refined base metals business. Trafigura had announced a joint venture last October with Citics Global Trade, a subsidiary of Citic Securities Co Ltd , China's largest investment bank. "This (cancellation) is due to the necessary conditions not being in place," Trafigura said in a statement on Tuesday, giving no further details. The statement did not mention suspected metals financing fraud at China's Qingdao port, but last year Trafigura said a probe had affected some partners and hit confidence in the industry as a whole.

Jeremy Penn, chief executive of London's centuries old Baltic Exchange will step down next year, the exchange said on Friday. Penn, who took the helm as CEO in 2003 after previous top positions with international news agency Reuters, will leave next summer. "It has been a privilege to work for the interest of the Baltic, its members and shareholders for the last 12 years and in many ways I shall be sorry to go," Penn said in a statement. During his tenure, Penn rebuffed overtures in 2010 and 2013 from the London Metal Exchange (LME) over a potential tie-up and also faced heat from brokers over the launch in 2011 by the Baltic of the first central freight derivatives platform Baltex, fearing they would lose business. Reporting by Jonathan Saul

Commodities jumped on Friday, headed for their largest weekly gain in more than three years as base metals roared higher after Glencore pledged to slash zinc output and gold hit three-week highs after dovish Federal Reserve minutes. Surging metals offset a choppy oil market. Brent, the global benchmark, slipped on Friday under pressure from bargain hunting at the end of a big weekly increase. Base metals were "explosive" after Glencore's surprise announcement it will cut zinc output by 500,000 tonnes a year, removing 4 percent of global capacity, INTL FCStone analyst Ed Meir said. The news unleashed a wave of short covering across the London Metal Exchange as investors unwound bearish bets on weaker prices and ballooning oversupply as economic growth slows in China…

Gold, crude oil and grains surged on Monday while industrial metals slid as investors reacted to escalating tensions between Moscow and Kiev after the Russian military tightened its grip on Ukraine's Crimea region. Concern about supplies pushed up crude oil prices by more than $2 a barrel and wheat and corn by 4-6 percent. Safe-haven buying sent gold prices to four-month highs. Base metals such as copper fell along with shares as investors ditched higher-risk assets and due to worries that a conflict could damage global growth. "Trade sanctions and a general ratcheting up of global tensions could also endanger the fragile global economic recovery now under way, hurting commodity prices in the process," analyst Edward Meir at broker INTL FCStone said.

Continued demand for iron ore, coal, and general cargo for the industrial and manufacturing sectors lifted the tonnage numbers along the Great Lakes-Seaway System to the positive column. For the period March 22 to November 30, year-to-date total cargo shipments were 34.6 million metric tons, a rise of 2.67 percent over the same period in 2011. The St. Lawrence Seaway reported an 11 percent increase for total cargo shipments during the month of November – 5.1 million metric tons – compared to November 2011. “The nearly 3 percent rise in overall tonnage handled through the Seaway in 2012 is due in part to the proven formula of ‘steel in, grain out’ as steel imports rose 12 percent in November as compared to the same month last year, and combined Canadian-U.S.