Vale + Jinnan Iron & Steel partner on iron ore plant in Oman

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What we're tracking today

TODAY: Vale and Jinnan Iron & Steel partner on iron ore plant in Oman + China’s BAIC group to set up EV factory in Egypt

Good morning, everyone. It’s a busy morning in logistics land, with several new factories for export popping up across the region, new aircraft acquisitions from the UAE’s DAE, and much more. But first, guess who’s making headlines yet again?

Boeing makes moves to tackle liquidity issues: Boeing has offered a USD 19 bn share sale to meet its liquidity needs and prevent a possible credit rating downgrade in one of the biggest share proposals by a public company, Bloomberg reports. The transaction, with over allotments, could potentially raise up to USD 21.8 bn, Bloomberg calculates.

The breakdown: The aircraft manufacturer has offered to put up 90 mn common shares for sale and around USD 5 bn of its depositary shares, according to a statement. The transaction’s underwriters have the choice to add an additional 13.5 mn common shares as well as USD 750 mn in depositary shares to cover over allotments.

REMEMBER- Boeing’s machinist strike entered its sixth-week after factory workers voted to reject a wage offer last week. Boeing expects to burn cash in 2025 on the back of a 3Q loss of USD 6 bn due to the strike, with CEO Kelly Orthberg calling for a “fundamental culture change” after the company on an earnings call. The aviation giant incurred nearly USD 8 bn in losses this year, primarily due to the strike that disrupted production of its 737 MAX, 777, and 767 aircraft.

Market reax: The company’s shares closed down 2.8% yesterday at USD 150.69 apiece.

ADVISORS- PJT is acting as the firm’s financial adviser for the offerings, according to the statement. BofA Securities, Goldman Sachs, Citigroup, and JP Morgan are acting as the lead joint bookrunning managers. Deutsche Bank Securities, Mizuho, Morgan Stantley, RBC Capital Markets, Wells Fargo, BNP Paribas, and SMBC Nikko are acting as joint bookrunning managers.

HAPPENING TODAY-

Aviation Connect’s Air Cargo Handling & Logistics (ACHL) Conference will kick off today in Turkey and wrap up on Thursday. The three-day conference will gather industry leaders to discuss ideas in the air cargo, logistics, and aviation industries.

PSA-

Hapag-Lloyd will roll out a general rate increase (GRI) on shipping from the Indian Subcontinent and the Middle East to North America, according to a company statement. The increase to USD 500 per container will be applied to cargo transported in 20 and 40 foot dry, reefer, and special containers, including high cube equipment. The GRI increase is applicable starting 20 November and valid until further notice.

WATCH THIS SPACE-

#1- Saudi Arabia’s Bahri is eyeing acquisitions in the European and US logistics sectors, ION Analytics reports, citing three sources familiar with the situation. The shipping firm could invest EUR 1-3 bn, with a particular interest in asset-light companies, such as freight-forwarding firms, with at least EUR 1 bn in annual revenues. The company will use a mix of debt and equity to finance the potential transactions. A company spokesperson said Bahri is looking towards expanding operations overseas, but declined to comment on whether acquisitions would be a part of the initiative, the news outlet said.

REMEMBER- Bahri dropped out of an acquisition race in July to snap up German logistics giant DB Schenker. Bahri’s offer — USD EUR 15 bn (USD 16.4 bn) — was the highest among the bidders.

#2- OQ’s shares drop on debut: Oman’s state-owned OQ Exploration & Production’s (OQEP) shares declined on their first day of trading after its initial public offering (IPO) raised USD 2 bn, Bloomberg reports. Shares in the firm ended the day down 8.2%, according to Muscat Stock Exchange’s website.

MARKET WATCH-

#1- Oil prices are up this morning, recovering from a slump on Monday, Reuters reports. Brent crude futures climbed 0.6 to USD 71.86 a barrel overnight, while U.S. West Texas Intermediate crude was up 0.7% to USD 67.83 a barrel. Prices were supported by a US plan to refill its Strategic Petroleum Reserve with up to 3 mn barrels of oil for delivery through May 2025.

#2- Baltic index continues decline: The Baltic Exchange’s dry bulk sea freight index — which tracks rates for the capesize, panamax, and supramax vessel segments — dropped 2% on Monday to its lowest reading since January. The capesize index fell 70 points, while the panamax index lost another 11 points and the smaller supramax fell six points.

DATA POINT-

Ocean freight carbon emissions reach record high in 3Q 2024: Global ocean container carbon emissions hit record highs in 3Q 2024 due to the ongoing Red Sea conflict, rising freight rates, and congestion across shipping routes, according to the freight rate analytics platform Xeneta. Carbon emissions for the top 13 ocean trades reached a record of 107.9 points, a 12.2% increase from the same period last year. This marks the highest emissions level recorded and only the second time the index surpassed 100 since its 1Q 2018 baseline, indicating higher emissions per tonne of cargo.

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CIRCLE YOUR CALENDAR-

Saudi Arabia will host the Saudi Airport Exhibition on Monday, 11 November and Tuesday, 12 November in Riyadh. The two-day exhibition will bring together global industry leaders to discuss the latest technologies around the world in the aviation industry. It looks to encourage discussion between Saudi aviation leaders and the global supply chain industry.

The UAE will host the ADIPEC Maritime and Logistics Exhibition and Conference on Monday, 11 November and Thursday, 14 November in Abu Dhabi. The event looks to explore ways to reduce emissions through innovative solutions. It will bring together industry leaders, regulators and decision makers in the global maritime and logistics sector.

Bahrain will host The Bahrain International Airshow on Wednesday, 13 November and Friday, 15 November near Awali. The three-day event is bringing together over 180 participating companies from over 59 represented nations globally.

Egypt will host the Autotech Exhibition on Sunday, 17 November until Tuesday, 19 November in Cairo. The event will bring together prominent local and international companies to discuss and evaluate the latest developments and trends in the automotive aftermarket and feeder industries.

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

Vale + Jinnan Iron & Steel invest USD 600 mn in iron ore concentration plant in Oman

Vale + Jinnan Iron & Steel partner up for iron ore plant in Oman: Brazilian miner Vale and Chinese steel maker Jinnan Iron & Steel Group have partnered up with an initial investment of more than USD 600 mn to build the first Direct Reduction (DR) grade iron ore concentration plant in Oman’s Sohar port and freezone, according to a statement. The plant will produce pellets and briquettes for low-carbon steel and is scheduled to start operations by mid 2027.

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Vale plans to invest USD 227 mn to connect the plant to its facilities in the region, while Jinnan will invest c.USD 400 mn to build, own, and operate the plant, which will process 18 mn tons of iron ore annually, producing 12.6 mn tons of concentrate, according to the statement.

How does it work? Iron ore will be upgraded to a higher-grade concentrate to produce high quality pellets and briquettes, a material made of compressed biomass, with reduced environmental impact.

The plan aims to increase Oman’s export capacity, integrate it into the steel trade route, and strengthen the country’s position as a supplier to the regional and international steel market while minimizing its environmental footprint, the statement said.

China’s BAIC group to set up EV factory in Egypt with local agent Alkan Auto

Egypt getting Chinese auto factory: China’s state-owned auto manufacturer BAIC Group has inked an agreement with Egyptian agent Alkan Auto to establish an EV factory in Egypt, with the start of production penciled in for the end of 2025, according to a statement. The factory will initially have an annual production capacity of 20k vehicles, which will be ramped up to 50k units by the end of its fifth year of production.

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Remember: The Madbouly government has been working to localize the auto industry, introducing the Egyptian Automotive Industry Development Program in 2022, which will offer incentives to auto players with the aim of localizing the industry and its feeder industries in efforts to enhance the country’s existing assembly and manufacturing capabilities — and encouraging new investment to the sector.

Localization and upping exports are part of the game plan: The cars from the factory are set to be sold locally and exported to Middle Eastern and African markets. The company is also planning to gradually increase the factory’s local component ratio from 48% to 58% over an unspecified time frame. The factory will create 1.2k jobs.

Déjà vu? We first heard about the project in September from unconfirmed local media reports, claiming that the two companies were in talks about the project.

It originally looked like BAIC was set to partner with Al Nasr on an EV project: We heard that BAIC inked a MoU with the state-owned Al Nasr Automotive to produce EVs locally back in June 2022, but we never got any confirmation that final contracts were signed.

This is far from the only Chinese auto factory in the pipeline: In September, we heard from unconfirmed reports that Chinese auto giant BYD through its local agent was negotiating to produce two new models locally. In the same month, we also heard that Dayun Guangzhou — whose motorized tricycles and motorcycles are familiar sights on Egyptian roads — also wants to expand its range of vehicles assembled here to also include passenger cars, light transport vehicles, and trucks. Also Kasrawy Group is reportedly looking to begin locally assembling Chinese Jetour and Jac car models.

Dubai Aerospace Enterprise acquires 10 new aircraft

DAE boosts aircraft portfolio: Dubai Aerospace Enterprise (DAE) has inked an agreement to acquire 10 aircraft for approximately USD 500 mn, according to a press release. DAE also facilitated the purchase and sale of equity interests in 36 managed aircraft from existing investors to new investors. The acquisitions are expected to be finalized by the end of 2024.

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The details: The narrow-body aircraft will be leased to four airlines across four countries.

Not the first aircraft acquisition agreement for DAE this year: DAE inked agreements back in August to acquire 23 aircraft from several entities for USD 1.1 bn. The planes are leased to 13 airlines in nine different countries.

Eyes on DAE: DAE owns a fleet of nearly 500 Airbus, ATR, and Boeing aircraft valued at USD 18 bn, according to the press release. Delays in new jet deliveries from Boeing and Airbus are bearing fruit for DAE services, with maintenance, repair, and overhaul (MRO) requests surging, with the company saying in July that it was booked solid for 18 months. Turkish Airlines is among the carriers who have leased aircraft from DAE, leasing 10 Boeing 737-8 aircraft, slated for delivery in 2025.

The lessor secured fresh funds this year: DAE said back in April that it is set to receive an AED 2.75 bn five-year unsecured term loan with Emirates NBD to support the state-owned firm’s general corporate needs and future financing requirements. In March, the firm said it was set to receive USD 420 mn back in fresh funding from China Construction Bank (CCB) to strengthen its liquidity position.

Vietnam, UAE ink comprehensive economic partnership agreement

Vietnam and the UAE inked a comprehensive partnership agreement yesterday that will see both countries cooperate across several sectors and unlock USD 20 bn in trade, according to a joint statement on Wam. The two countries will ramp up cooperation in logistics, oil and gas, renewable energy, information technology and digital transformation, and agricultural production and processing.

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The two countries will set up a working group for economic and trade cooperation, and will look into potentially setting up a UAE-Vietnam Business Council, a task force for investment cooperation, and a UAE-Vietnam investment fund as potential mechanisms for cooperation.

President Sheikh Mohamed bin Zayed Al Nahyan discussed with Vietnamese Prime Minister Pham Minh Chinh during his visit yesterday expanding investment and trade cooperation, Wam reports. The leaders also touched on regional and international issues, exploring new potential windows for bilateral collaboration.

AND- Dubai Chamber of Commerce set up the Vietnamese Business Council to support bilateral trade and investment between the UAE and Vietnam, Wam reports. The new business council was launched yesterday on the sidelines of the Vietnam–UAE Business Forum in Dubai.

The forum also saw the signing of several agreements, including:

UAE airlines Etihad and Emirates inked an agreement with Vietnam Airlines to boost cooperation in the aviation sector;
DP World and Vietnam Maritime Corporation will work to develop Can Tho Port and inland waterways;
UAE’s Benya Group, NDMC and AD Ports will partner with Vietnamese Vingroup on developing data and logistics infrastructure;
Emirates Driving will collaborate with automotive company Vinfast on EV manufacturing;
Abu Dhabi-based Golden Nile signed an agreement with Vietnam’s T&T Group to collaborate in the sectors of finance, agriculture, and services.

Etihad Cargo taps new products senior manager

Etihad Cargo appoints new products senior manager: Etihad Airways’ air cargo arm Etihad Cargo has appointed Jacob David (LinkedIn) as its senior manager of products, according to a statement. David joins the firm with extensive experience in product development and business strategy, having served in several firms — including Air Canada and Qatar Airways — as head for cargo products and services. Etihad Cargo says it is looking to leverage David’s expertise to improve its IATA CEIV-certified products, such as PharmaLife, FreshForward, SecureTech, SkyStables, and LiveAnimals.

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A heap of updates in aviation, shipping, and zones, from Jordan, KSA, and Egypt

ZONES-

Egypt’s SCZone makes headway on Kemet Data Center: Egypt’s Intro Group subsidiary Intro Technology inked an MoU with engineering firm Sterling & Wilson Data Center (SWDC) for the contracting, construction, and execution of the Kemet Data Center project in the Suez Canal Economic Zone (SCZone), according to a statement. Data center engineering leader SWDC will act as the project’s EPC contractor, overseeing design, budgeting, timeline management, and systems testing and accreditation. The firm will also maintain the facility for 3-5 years after the project’s completion.

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Background: Intro Technology signed a MoU with Omani data center leader Oman Data Park to establish a new USD 450 mn sustainable data center in the SCZone earlier this month.

AVIATION-

Joramco + MNG ink maintenance agreement: Dubai Aerospace Enterprise’s aircraft MRO and engineering arm Jordan Aircraft Maintenance Limited (Joramco) has inked an agreement with Turkish cargo airline MNG Airlines to perform maintenance checks on A330 and A321 freighters, according to a statement. The agreement is an extension of Joramco’s maintenance partnership with the Turkish cargo carrier for performing C-checks during 2025.

SHIPPING+MARITIME-

Mawani launches route linking KSA, Turkey, China: The Saudi Ports Authority (Mawani) has added a new cargo shipping service operated by Turkish shipper Akkon Lines, dubbed FES, to Jeddah Islamic Port, according to a statement. The new service links Jeddah Islamic Port to Turkey’s Ambarli, Izmir, Gebze, Gemlik, and Iskenderun ports, as well as China’s Qingdao, Taicang, Ningbo, and Nansha ports. The service has a capacity of up to 3k standard containers.

ROADS-

Adia and APG invest in Indonesian infrastructure: The Abu Dhabi Investment Authority (Adia) and Dutch pension fund APG are investing USD 1.4 bn in Indonesia’s Medan-Binjai and Bakauheni-Terbanggi Besar toll sections of the Trans Sumatra Toll Road, as part of their USD 2.75 bn investment strategy with the Indonesia Investment Authority (INA), Reuters reports.

Details: The Medan-Binjai section runs through the capital of north Sumatra, while Bakauheni-Terbanggi Besar serves as a link between the islands of Java and Sumatra. The toll sections aim to improve regional connectivity and reduce travel times.

OTHER STORIES WORTH KNOWING THIS MORNING-

Qatar + Afghanistan to expand aviation ties: Qatar has inked an air services MoU with Afghanistan to boost transport links and increase air traffic rights between the two countries. (Statement)

Ammonia fuel struggles amid safety concerns, high costs

Zero carbon ammonia continues to face safety hurdles and cost challenges compared to alternative shipping fuels such as menthol, biofuels, and LNG, Reuters reports.

“Currently the lack of regulation, experience in use and toxicity of ammonia on board ships constitute major safety deterrents,” mining giant Rio Tinto head of commercial operations Laure Baratgin told the newswire. Refueling vessels with ammonia has the potential to cause acute poisoning and damage to the skin, eyes, and respiratory system, with the greatest risk posed by leakage during bunkering operations, the newswire explains. “For oil, you see it – it stays there and it spreads out in water. But ammonia dissipates in air,” GCMD CEO Lynn Loo told Reuters.

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High costs add to the trouble: For ammonia bunkering to be competitive, its associated costs will have to fall significantly, as powering ammonia-fuelled vessels can cost up to two to four times more than conventional fuels. Ships operating on ammonia engines will also rack up extra maintenance costs, as the fuel is corrosive. “If you want to travel the same distance, you either have to carry two and a half times that amount of fuel, or you have to bunker more frequently so that you have enough fuel to be able to make that trip,” Loo added.

Still, ammonia’s major selling point is that it is a zero-emission fuel when made from green hydrogen.

The orderbook: Just some 25 ammonia dual-fuel vessels have been ordered as of 2024, with shippers still hesitant due to safety risks. This pales in comparison to at least 722 LNG-fuelled vessels and 62 methanol-fuelled vessels on order as of 2024.

In the pipeline: The first cargo ships powered by ammonia are set to enter service in 2026. The industry is gearing up for this, with the first transfer of ammonia from one ship to another safely completed last month in Western Australia, the newswire says.

European airlines feel the impact of Boeing and Airbus delivery delays

European airlines feeling the impact of planemaker delays: European airlines, including Lufthansa and Air France KLM, are expected to report drops in their 3Q reports this year amid plane shortages and rising costs, while delivery delays from planemakers Airbus and Boeing show no sign of easing anytime soon, Reuters reports. The delays have forced airlines to use older models that are expensive to maintain and use up more jet fuel. Carriers are also feeling the impact of rising maintenance costs, adverse weather conditions, air traffic control issues, and disruptions due to tension in the Middle East.

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Bleak outlook: “We don’t expect to get [new Boeing aircraft] until 2026. And we need them,” Lufthansa Chief Executive Carsten Spohr told journalists. The carrier forecasted to report a 9% y-o-y dip to EUR 1.3 bn in its top line in its 3Q earnings, the newswire reports, citing a company-led analyst poll.

Demand is unwavering: “European airlines are in an extremely unequal competitive position with China, as well as with airlines from the Persian Gulf and Bosporus,” a Lufthansa spokesperson told Reuters. “All airlines from these countries benefit from low location costs, different social standards and high government investment in the aviation sector.”

EV market penetration to reach 20% by 2025 -DHL

Global electric vehicle (EV) market penetration is forecasted to reach some 20% by next year, a DHL automotive industry trends report (pdf ) said last week. Battery factories in Hungary are undergoing expansions, and investments are increasing in production facilities and charging infrastructure in Mexico, the report finds.

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Catering to growing logistics demands: DHL is looking to adapt its logistics supply chains to develop solutions for the storage and transportation of batteries to meet growing global EV demand. The firm is looking to support both car manufacturers and logistics providers with end-to-end logistics solutions for batteries, electric motors, and automotive parts. The firm will do so through its global network of EV Centers, with hubs in the US, China, Mexico, Indonesia, the UAE, Italy, and the UK, says the report.

What they said: “Automotive companies have to optimize their logistics processes to meet the increasing demands of this rapidly changing industry. This requires more resilient supply chains that can cope with both unexpected peaks in demand and bottlenecks, such as shortages of critical components, delays in transportation, or disruptions in raw material supplies,” DHL Global Auto-Mobility Sector President Fathi Tlatli said.

Calendar

NOVEMBER

3-5 November (Sunday-Tuesday): Saudi Road Safety and Sustainability Conference, Saudi Arabia

11-12 November (Monday-Tuesday): World Advanced Manufacturing Logistics Summit & Expo, Riyadh, Saudi Arabia.

11-12 November (Monday-Tuesday): Saudi Airport Exhibition, Riyadh, Saudi Arabia.

11-14 November (Monday-Thursday): ADIPEC Maritime and Logistics Exhibition and Conference, Abu Dhabi, UAE.

13-15 November (Wednesday-Friday): The Bahrain International Airshow, Sakhir Airbase, Bahrain.

13-15 November (Wednesday-Friday): ITC North-South – New Horizons, Astrakhan, Russia

18-20 November (Monday-Wednesday): The Heavy Equipment and Truck Show, Damman, Saudi Arabia.

19-21 November (Tuesday-Thursday): Saudi International Maritime Forum, Dammam, Saudi Arabia.

18-19 November (Monday-Tuesday): G20 Summit, Rio de Janeiro, Brazil.

20-21 November (Wednesday-Thursday): Saudi Rail Exhibition, Riyadh, Saudi Arabia.

DECEMBER

2-3 December (Monday-Tuesday) Wings of Change Middle East, Riyadh, Saudi Arabia.

10-11 December (Tuesday-Wednesday): Rail Industry Summit, Casablanca, Morocco.

10-12 December (Tuesday-Thursday): Middle East Business Aviation, Dubai, UAE.

20 December (Wednesday): The Iran-Senegal Joint Economic Cooperation Commission, Dakar, Senegal.

EVENTS WITH NO SET DATE

IATA Annual General Meeting (AGM) and World Air Transport Summit, New Delhi, India.

1H 2024: Civil Construction subcontracts for construction firms in Oman for implementation of the Abu Dhabi – Suhar rail link to be announced.

2H 2024: Bahri’s barges for Saline Water Conversion Corporation (SWCC) to begin initial and commercial operation.

King Salman Energy Park is set to become operational.

The Cross-Border Digital Trade Forum, Dubai.

2025

2Q 2025: ICAO Facilitation Conference 2025 (FLAC 2025), Dohar, Qatar.

FEBRUARY

4-5 February (Tuesday-Wednesday): Seatrade Maritime Qatar, Doha, Qatar.

APRIL

16-17 April: Global Ports Forum, Dubai, UAE.

Mid-2025: Iraq will complete phase one of the construction of the Grand Faw Port.

DHL and Aramco’s logistics and procurement hub in Saudi Arabia will commence operations.

AD Ports-operated Safaga Port’s multi-purpose terminal will become operational.

Phase 3 of APM Terminals Tangier MedPort to be complete and operational.

1Q 2025: Sadr Park’s Logistics Center in Riyadh to be completed.

1Q 2025: Phase twoof Jafza Logistics Park to be completed.

NOVEMBER

4-6 November: The International Air Cargo Association TIACA’s Air Cargo Forum 2025, Abu Dhabi, UAE.

2026

2026 UNCTAD Global Supply Chains Forum, Saudi Arabia.

2027

4Q 2027: Oman’s Musandam Airport construction to be completed.

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