Shipping

DISAPPEARING SHIPYARDS: NOT MUCH OF A MYSTERY?

At the beginning of 2009, close to the peak of the current shipbuilding cycle, there were a total of 934 ‘active’ shipyards globally. This number has now dropped by 62 percent to stand at 358 yards as of start July 2017, the lowest number of active yards for many years. With a significant number of yards exiting the market, this month’s Shipbuilding Focus investigates the nature of these changes.

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ORDERS FOR NEWBUILDINGS ACTIVITY SLOWS DOWN

Orders for newbuildings appeared to be slowing down over the course of the past few days. It is said that moving now well into the summer period and with the typical summer loll showing its face once again, activity seemed to be waning on all fronts.

There was a minimal amount of fresh orders that surfaced this week, while given the fact that most shipbuilders have already started to slowdown their marketing efforts, it is looking unlikely that experts will see any dramatic amount of fresh business emerge during August.

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ΙMO BALLAST WATER DELAY PROMPTS REVISION OF INTERMEDIATE-TERM TANKER SUPPLY

Older tankers have been given a new lease of life, meaning that the tanker market’s tonnage oversupply issues could take longer to resolve. It is said that in a development that caught many industry participants off guard, the IMO agreed last week to urging by a number of flag-states to delay enforcement of Ballast Water Management Convention (BWMC) compliance for existing vessels from September 2017 to September 2019.

Compliance for existing vessels calls for the fitting of Ballast Water Treatment systems from their first International Oil Pollution Prevention (IOPP) renewal survey after the enforcement date.

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COMMODITIES’ PRICING TRENDS A MIXED BAG: SHIPBROKER

The shipping industry is directly linked with the prices of raw materials and commodities like oil, iron ore and coal, since they are the key ingredient to the products’ trading and as such, their transportation.

As such, the evolution of pricing trends this year is key to understanding future demand for shipping services. In its latest weekly report, shipbroker quoted as saying last that having just passed the second quarter of 2017, it is interesting to take a look at the performance of the commodity market and how certain commodities acted during this time. It is worth delving further into the S&P’s GSCI course over the past 6 months which exhibited a 10 percent decrease in the index over the past 6 months.

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TANKER MARKET SENTIMENT WEAKENS LAST MONTH

Dirty tanker market sentiment was generally weaker in June, as average spot freight rates dropped on all reported routes.

On average, dirty tanker freight rates declined by 17 percent from the previous month and spot rates for all classes went down. These negative developments came as the market suffered from limited activity prior to the summer months, while the increase in vessel supply remained a main influence on freight rate movements. Clean spot freight rates had a mixed performance, with some routes showing higher freight rates; however, these were relatively minor. On average, clean tanker spot freight rates were almost flat compared with those of the previous month.

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CHITTAGONG INFRASTRUCTURAL WOES CONTINUE

The country’s premier seaport at Chittagong has again hit the news headlines. Long queues of vessels seeking to load and unload containers there and consequent woes of the shipping lines and businesses have thus come into a sharp focus, again.

For most international shipping lines, Chittagong port, as reports said, is not at all a preferred destination. The Bangladeshi exporters and importers can hardly avoid the port. That is why 90 percent of the external trade still takes palace through it. The businesses, however, have to count additional costs for all its deficiencies. But it is the consumers who are ultimately made to compensate for the extra payments by the businesses.

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ABOUT RM5B NEEDED FOR MALAYSIAN PORTS EXPANSION

About RM5bil would be needed over the next five years for the expansion of Kuantan Port, Sapangar Bay Container Port and Port of Tanjung Pelepas, says RAM Ratings.

This estimate may swell to over RM250bil if large-scale projects such as the third Port Klang at Carey Island and the Melaka Gateway projects take off,” said the rating agency’s co-head of infrastructure and utilities ratings, Davinder Kaur Gill. She pointed out on Wednesday hence, from a funding perspective, the financing needs of the Malaysian and regional port sectors would be massive if all the announced expansion plans come to fruition in the near future.

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JAPAN’S MOL TO LEVY $150 PER TEU RATE HIKE ON CARGO

Japan’s MOL has announced a general rate increase (GRI) covering cargo transported from Asia to southern Africa from August 1. The GRI will be US$150 per TEU and $300 per FEU, applicable for cargo carried from Asia, the Indian subcontinent and Middle East to southern Africa, including South Africa, Lesotho and Zimbabwe.