Good morning, nice people. We have a lot of ground to cover this morning, from M&As to IPOs to a spate of trade updates — but first, let’s take a quick look at what’s on the agenda this week.

HAPPENING THIS WEEK-

#1- Saudi Industry and Mineral Resources Minister Bandar Al Khorayef is on a one-week mission to East Asia which kicked off yesterday, SPA reported. The trip aims to boost bilateral relations and drum up investments, including joint ventures, with China and Singapore. High-level meetings with major Chinese firms including GAC Group, General Lithium, and Huawei are on the agenda, as well as visits to key locations in Hong Kong including Hutchison Ports, Cyberport, and Johnson Electric. In Singapore, the delegation is expected to make visits to the Tuas Port, and connect with the Agency for Science, Technology and Research (A*STAR), and the Singapore Manufacturing Federation.

#2- The Saudi Warehousing and Logistics Expo will kick off today and run through to Wednesday in Riyadh, bringing together leaders in the supply chain, warehousing, and logistics industry from across the Kingdom to discuss investments, trade, geopolitical risks, and localized manufacturing.

Over in Egypt, the Egypt International Airshow is kicking off tomorrow and running through to Thursday in El Alamein. The event will host a range of discussions touching on industrialization, digitalization, and globalization in the regional commercial aviation sector. The event is set to showcase aircrafts and innovative aerospace products and services.

#3- It’s PMI week: Stay tuned for our coverage of Egypt and Saudi Arabia’s PMI reports tomorrow morning, followed by the UAE on Wednesday, and Kuwait, Qatar and Lebanon on Thursday.

WATCH THIS SPACE-

#1- The order book for the National Marine Dredging Company Energy’s (NMDC Energy) ADX IPO was 7x oversubscribed as of yesterday, according to a statement. The offering saw “strong investor interest” despite the second day of the subscription falling on a weekend, the company said. Investors have until Wednesday, 4 September, to get their orders in.

BACKGROUND- NMDC is listing a 23% stake in its engineering, procurement and construction unit, NMDC Energy, on the ADX. The transaction is due to wrap up on 11 September. Offer shares are priced at AED 2.80 apiece, valuing the transaction at AED 3.22 bn. NMDC’s board approved the IPO last month.

ADVISORS- First Abu Dhabi Bank is lead receiving bank and lead manager, with Abu Dhabi Commercial Bank, WIO Bank, and Al Maryah Community Bank also acting as receiving banks. International Securities is lead placement, while Hadef & Partners is legal counsel and Ernst & Young has audit duties.

#2- Qatar ramps up urea export ambitions: QatarEnergy plans to develop a world-scale urea production hub that aims to more than double the Gulf country’s urea production to 12.4 mn tons per annum, the state-owned company said in a statement. The project will see setting up three ammonia production lines that will look to supply feedstock to four new urea production trains in Qatar’s Mesaieed Industrial city. Production from the project's first new urea train is expected before the end of 2030, according to the statement.

REMEMBER- Urea production is big in Qatar: QatarEnergy signed in July a 15-year agreement to supply 0.74 mn tons of urea per year to fertilizer producer Koch Fertilizer. The agreement will see QatarEnergy supply Qatari-origin urea to the US agricultural sectors and other international markets.

Establishing the world's “urea production capital”: “Developing this project in Mesaieed Industrial City will ensure the optimum utilization of the excellent existing infrastructure for the petrochemical and fertilizer industries, including the city’s export port, which is one of the largest fertilizer and petrochemical export facilities in the MENA region. It will also establish Mesaieed as the urea production capital of the world,” Qatar’s Minister of State for Energy Affairs and QatarEnergy CEO Saad Al Kaabi said in the statement.

#3- An energy corridor between Cyprus and Egypt? An energy corridor connecting Egypt and Cyprus to carry natural gas and renewable energy was discussed on Thursday by Egyptian Oil Minister Karim Badawi and his Cypriot counterpart Giorgos Papanastasiou. The two sides discussed sending Cypriot natural gas to Egypt to be liquified and exported as LNG to global markets.

Cyprus wants to speed up things at home: Papanastasiou discussed ways to “speed up” the exploitation of his country’s natural gas at the Cyprus Exclusive Economic Zone (EEZ), CyprusMail reported. They discussed the feasibility of using Egypt’s existing infrastructure in extracting Cypriot natural gas and later transporting it to Egypt to be liquefied for exports globally.

#4- Djibouti is ready to offer Ethiopia “100% access” to its Tadjoura port in a bid to defuse regional tensions, the country’s Foreign Minister Mahmoud Ali Youssouf told BBC on Friday. Djibouti — which shares the border with Ethiopia and Somaliland — was concerned it could be caught in the crossfire between Ethiopia and Somalia, harming its port-dependent economy. “We are offering 100% management for a port in the north, a new corridor that is already built” in Tadjoura, he said. He said the proposal was initiated by Djibouti President Ismail Omar Guelleh to help “find a way for dialogue” to stop a further escalation in the Horn of Africa region.“Although Djibouti is a stable country, quite safe, we cannot say that tensions in the neighboring countries do not affect us…it would be a major source of concern if the crisis in the region escalated further,” Youssouf said.

A refresher on the fresh tensions: A preliminary agreement earlier this year between Ethiopia and breakaway region Somaliland that would give Addis Ababa access to the Red Sea port of Berbera has sparked tensions in the region. Somalia responded by recently signing a mutual defense agreement with Egypt, which remains in dispute with Ethiopia over the unilateral filling of the disputed Grand Ethiopian Renaissance Dam. The agreement sees Egypt sending troops to Somalia in their capacity as peacekeeping forces to also train and assist Somali forces to help preserve peace in the region.

#5- Maersk’s first green-powered journey across the Pacific was short lived: The Alette Maersk recently attempted to make its mark as the first container vessel to travel on low carbon methanol fuel across the Pacific Ocean, but was forced to return to using fossil fuels on its return leg to China due to a lack of availability of the green fuel in its final destination to the US, Reuters reported on Thursday.

Big industry players are seeking help: Maersk urged the Biden administration to channel the use of the Inflation Reduction Act to bolster the production and use of green maritime fuel as it has done for trucking and aviation. The company, along with CMA CGM, Hapag-Lloyd, and MSC have come together to present a plan to the International Maritime Organization to tax shipping carriers that stand to gain a competitive edge from cheaper fossil fuels.

Maersk is not the only one struggling to keep up the green methanol momentum: Renewables group Orsted backtracked on plans to build Europe’s largest e-methanol plant due to market growth occurring more slowly than expected, Reuters added. Low-carbon methanol’s cost of production has been one of the main obstacles impacting the fuel’s adoption, reaching 2-3 times higher than the cost of producing its fossil fuel alternative.

DISRUPTION WATCH-

#1- Libya’s oil production woes continue: Three oilfields in Libya were ordered to resume operations after a growing conflict between rival political factions over control of the central bank halted production in most of the country’s oilfields, Reuters reported on Saturday, citing three engineers in the field. Sources said the resumption of production for the Sarir, Messla and Nafoura oilfields was ordered by the field’s operator, the Arabian Gulf Oil Company. The move comes days after Libya’s eastern-based administration shut down oilfields in eastern Libya, which account for almost all of the country’s production, after western authorities replaced the country’s veteran central bank governor in August.

A major blow: The shutdown has caused the loss of c. 63% of Libya’s total oil production, Reuters reported on Friday, citing a statement by the country’s National Oil Corporation.

#2- Salvage crews begin towing ablaze tanker following oil spill fears: Tugboats began towing an oil tanker carrying 1mn barrels of crude oil that was struck by Yemen’s Houthis 10 days ago, Reuters reported on Saturday, citing Houthi Foreign Minister Jamel Amer. The armed group greenlit the salvage operation last Wednesday over fears that the damaged tanker could leak 150k tons of crude oil into the Red Sea.

Background: The Sounion was evacuated last week by Aspides following the initial attack. The vessel sustained several projectile missile attacks off the coast of Yemen’s Hodeidah Port, causing a fire to break out onboard, according to the ship’s operator Delta Tankers. “Carrying 150k tonnes of crude oil, the MV Sounion now represents a navigation and environmental hazard,” Aspides noted.

No change of approach by the Houthis just yet: The Iran-backed group announced an attack on Saturday on the MV Groton container vessel crossing the Gulf of Aden for the second time, Reuters reported on Friday. UK Maritime Trade Operations reported two missiles had struck near the ship on Friday and that no damage to the ship or injuries to the crew were reported.

MARKET WATCH-

#1- Oil prices fell further in early morning trading in anticipation of higher Opec+ production kicking off in October and sluggish Chinese and US demand, Reuters reports. Brent crude futures were down 0.8% to USD 76.32 by 04.50 GMT, while US West Texas Intermediate (WTI) fell 0.7% to USD 73.03 a barrel. The slump in price follows an overall 0.3% decline for Brent last week and a 1.7% drop for WTI.

The dip in oil prices comes as Opec+ is expected to stick to its October production boost, Bloomberg reported on Friday, citing delegates it says are involved in the discussions. The group plans to increase output by 180k barrels a day, continuing their gradual recovery from the voluntary cuts made in 2022. Despite market jitters and whispers of a potential pause due to China’s demand slump, the group is not showing signs of pushing back on hikes, the officials said.

#2- Baltic index slumps on Friday: The Baltic Exchange’s dry bulk sea freight index — which tracks rates for the capesize, panamax, and supramax vessel segments — was down 0.7% to 1,814 points on Friday, breaking a two-day winning streak. The capesize index fell 0.6% to 3,099 points, while the panamax index dipped 15 points to 1,316 points. The smaller supramax index eased 6 points to 1,306 points.

#3- The Drewry World Container Index decreased 3% to USD 5,181 per 40-ft container last week, according to the latest index readings. Spot rates for 40-ft containers are now 50% below the previous pandemic peak of USD 10,377 in September 2021, but 265% higher than the pre-pandemic rates of USD 1,420. The average composite index YTD is USD 4,108 per 40ft container, which is USD 1,299 higher than the 10-year average rate of USD 2,809.

DATA POINTS-

#1- Middle Eastern airlines recorded a 14.7% y-o-y rise in air cargo demand in July 2024, data by the International Air Transport Association (IATA) showed. IATA has been forecasting a 12.3% y-o-y rise in air cargo demand this year by Middle Eastern carriers on the back of a strong performance seen last year. Meanwhile, global air cargo demand increased by 13.6% y-o-y in July 2024, marking the eighth consecutive month of double-digit y-o-y growth, IATA said.

#2- Jebel Ali Port set a new record for monthly container handling capacity in July 2024, with 1.4 mn twenty foot equivalent units, according to a statement released on Friday, beating the previous record set in 2015. The growth came on the back of a robust 1H 2024 performance, as the port saw a 3.9% y-o-y increase to 7.3 mn TEUs, driven by high inbound cargo from key Asian markets, including China, Japan, and South Korea.

PSA-

You’ll be paying less at the pump this month in the UAE: The Fuel Price Committee decreased fuel prices for September by around 6% after a 2% price hike last month, Wam reports. The breakdown for one liter:

• Super 98: AED 2.90;
• Special 95: AED 2.78
• E-Plus 91: 2.71.
• Diesel: AED 2.78 (down from AED 2.95 last month)

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CIRCLE YOUR CALENDAR-

Saudi Arabia will host SkyMove MENA on Tuesday, 10 September and Wednesday, 11 September in Riyadh. The event will gather global industry stakeholders, experts, and service providers to discuss challenges in the regional aviation industry.

The UAE will host the Intelligent Transport Systems World Congress from Monday, 16 September to Friday, 20 September in Dubai. The Congress is expected to welcome 20k participants to explore innovations in smart mobility and transportation technology.

Saudi Arabia will host the Saudi Maritime and Logistics Congress on Wednesday, 18 September and Thursday, 19 September in Dammam. The event will gather international industry leaders in the maritime sector to discuss a range of topics including interconnected logistics, supply chains, digitalization, decarbonization and workforce development.

Check out our full calendar at the bottom of this email for a comprehensive listing of upcoming news events and news triggers.