Blocked by a Mexican court order from entering the port of Tampico on Mexico’s Atlantic coast, the 34,194dwt Mary Nour, owned by the Jordanian-based CTI Group, and complete with some 27,000t of cement on board, lies idly in the outer anchorage of Tampico while lawyers fight over the rights and wrongs of the Cemex-led decision to bar the ship from the port, on the grounds that its size would block the channel, and thus hamper Cemex’s own cement and limestone distribution facilities within the harbour.
Tampico port officials have reportedly expressed surprise at the court order, pointing out to local reporters that the channel width is some 300m at the place where the Mary Nour will berth, with the ship’s owners pointing out that the decision breaches International Law of the Sea conventions, in that provided the ship is seaworthy, fully certificated and meets all international requirements on safety and health that the ship cannot be denied entry to the port.
The court order must refer to the proposed plan by Mary Nour’s operational team that the ship will eventually double bank with another incoming cement vessel to further restrict the channel width, whilst this second vessel discharges into the Mary Nour. This operational plan is not disputed by CTI but as this proposed operation is as yet some way in the future, it is no reason to bar the Mary Nour from discharging its own cargo of 27,000t of portland grade cement loaded in the Russian port of Novorossisk in the Black Sea.
The Mary Nour’s arrival on Saturday 17th July can hardly be a surprise, with CTI linking up several months ago with local Mexican ready-mix partner CDM (Comercio para el Desarrollo Mexicano) and another local group Tradeland, to set up this new cement sourcing and distribution strategy. Many major cement buyers in Mexico have in fact complained for years about Mexico’s excessive cement prices which can range between US$120-140 per tonne on the local market and the decision by a local ready-mix group to take the plunge and try to buy foreign cement might be seen by observers as long overdue, or perhaps suicidal, as local Mexican producers close ranks to stop lower priced cement from entering this lucrative market.
CTI and partners have planned for annual sales of 300,000t to 500,000t of cement into Mexico, if its plans are successful, but it will not be an easy path judging from this first shipment. The Mary Nour had initially secured its first cargo for Mexico from PT Semen Padang in Indonesia but was turned away from the port just prior to loading, with Padang apparently unwilling to sell cement for operational reasons. Whether this had anything to do with the fact that Padang is owned by PT Semen Gresik, Indonesia, in which Cemex has a 25 per cent interest, is probably just conjectural on our part.
From Indonesia the ship then sailed to Taiwan to load its cement cargo in a deal brokered by independent trader Transclear and involving Japanese supplier Sumitomo. However, again at the last minute Sumitomo pulled out of the deal for unspecified reasons and the ship was turned away from its Taiwanese loading port. After some delays CTI then secured a cargo from Russian principals at Novorossisk in the Black Sea, quite a journey from Taiwan via the Suez Canal, up into the Black Sea for loading and then across the Atlantic to Tampico port, Mexico, where it arrived last week.
So what now? Not surprisingly CTI have begun to fight to have the court order removed and for the ship to enter and discharge its cargo as quickly as possible. As the ship is fully equipped for both bulk and bagged discharge, requisite port facilities needed are minimal, although warehousing space has been acquired for much of the bagged cargo discharge (Mexico is predominantly a 80 per cent bagged market) with bulk offloading organised directly into waiting bulk cement trucks.
However, although the merits of the present Cemex case look rather slim, Cemex is expected to put up an exceedingly strong fight for a market worth over 30Mt of cement and where no cement imports have been seen until now. Whether CTI and its local partner CDM can withstand the enormous pressures that are now bound to follow from this first cement shipment will be interesting to observe, and while CTI and its local partners seem determined to press ahead – citing a second ship now already loaded and en-route to Mexico – this particular cement contest is likely to go the full distance – and then some more!