Slow and steady recovery for container shipping
The outlook for the container shipping market in 2018 and 2019 is a combination of healthy demand growth that will outpace the fleet; resulting in a better supply-demand balance and slightly higher freight rates and profits for carriers, according to the latest edition of the Container Forecaster published by global shipping consultancy Drewry.
The bad news for carriers is that they are unlikely to see the very strong demand growth rates of early 2017 for the foreseeable future. The good news is that while port handling growth may have peaked, they can still expect more than adequate volumes for at least the next two years.
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Hapag-Lloyd back in black with US$39.5mn profit
German shipping giant Hapag-Lloyd reversed from an annual EUR93.1 million net loss in 2016 with a EUR32.1 million (US$39.5 million) profit in 2017, drawn on revenues of EUR10 billion, up 29 per cent year on year.
Volume increased 29 per cent to 9.8 million TEU (2016: 7.6 million TEU), driven by the merger with UASC and a healthy underlying organic volume growth. Transport expenses increased 25.5 per cent to EUR8 billion (2016: EUR6.4 billion), because of higher volumes and an increased average bunker consumption price of US$318 per ton (2016: $226/ton). In its most recent economic outlook, the IMF expects global economic growth to reach 3.9 per cent overall and global trade volume to increase by 4.6 per cent in 2018.
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Uncertainty looms over marine fuel sulfur limit
In about 20 months, the shipping industry is going to start burning a fuel that today they know next to nothing about. The International Maritime Organization has set a January 2020 deadline for a new 0.5 percent sulfur limit on marine fuels.
The move is poised to force most shipowners to switch from burning residual fuel oil to a new, unfamiliar, less-sulfurous product. A study by CE Delft, commissioned by the IMO in 2016 before it decided to cap the sulfur limit, shows demand for less-than 0.5 percent sulfur marine fuel will equal about 233 million mt/year when the rule takes effect in 2020.
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Asia clean mr tankers stay steady, vlccs off to shaky start
In the tale of two East of Suez tanker segments, all the excitement centered on the clean product tanker market during the first quarter of 2018, while the dirty market languished since the beginning of the year due to supply side concerns.
The inherently resilient nature of the clean tanker market was once again on display with freight levels experiencing recovery intermittently during Q1, while a contrasting trend was witnessed in the dirty segment. Moving into Q2, both segments are seeing signs of positivity with clean tankers expected to find increased employment opportunities to ferry refined products due to refinery turnarounds, while dirty tankers are expected to find tonnage balance due a spike in demolition activity.
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Is a dangerous complacency taking hold in shipping over climate goals?
As UN talks on cutting greenhouse gases from the shipping industry open in London, there are concerns that a dangerous complacency is taking hold in the sector.
The main point of the meeting – which starts this week at the International Maritime Organisation (IMO) in London – is to define a response from the international shipping sector to the Paris Agreement. This is a commitment by all the world’s countries to reduce GHG emissions in order to avoid dangerous climate change defined in the agreement as stabilising temperature rise well below 2C and pursuing efforts to limit to 1.5C.
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Kolkata port to revive ship repairing facilities
After signing a profit-sharing agreement with Cochin Shipyard Ltd (CSL) — India’s largest shipbuilding and maintenance company — Kolkata Port Trust (KoPT) is set to revive its ship repairing facilities in two out of five idling dry docks which it abandoned in 2015.
Under the terms of the agreement, KoPT will be providing the necessary waterfront, dry dock, land and will be repairing part of associated infrastructure while CSL will repair and operationalize the idling machines needed for repairing ships and may also install renovated machinery pieces if needed. The profit from this venture will be shared in a 40:60 ratio between KoPT and CSL.
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BP eyes 119 LNG cargoes this year
Oil major BP is targeting shipping 119 cargoes of liquefied natural gas (LNG) from its Tangguh project in Indonesia’s West Papua province this year, including 22 for the domestic market, a company official quoted as saying on Wednesday.
BP expects to keep the same balance of shipments for export and the domestic market unchanged up to 2020, BP Indonesia country head Dharmawan Samsu told a parliament hearing. After 2020 BP will dedicate roughly one-third of the LNG output from Tangguh to the domestic market, or around 60 cargoes, Samsu said. Tangguh’s annual output capacity is currently 7.6 million tons of the super-cooled fuel from two LNG trains.
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Indonesia to postpone new coal, palm oil shipping rules
Indonesia will delay until 2020 trade rules requiring exporters of coal and crude palm oil to use only Indonesian-flagged vessels, government officials said, putting off efforts to develop local shipping and save foreign exchange reserves.
The decision to postpone the rules by two years may come as a relief to the coal, palm oil and shipping industries, which had raised concerns over the availability of local vessels. Indonesia is the world’s biggest exporter of thermal coal and the top producer of palm oil.