Floating lng cargoes in Asia find buyers as prices plunge
Several liquefied natural gas (LNG) cargoes that had been stored on vessels in Asian waters are now heading towards buyers’ terminals in China, Japan or South Korea as spot prices for the super-chilled fuel have plunged this week to multi-month lows. The data also shows that at least five laden LNG tankers remain in Singapore waters. Three of them have been there holding LNG in storage since the second half of October.
Storing LNG on tankers is generally seen as a riskier bet than holding crude oil on the water, given higher storage costs and the fact that LNG cargoes degrade over time by evaporating. Data intelligence company Kpler estimates that of 18 LNG tankers it flagged as floating storage in the Asia-Pacific region last week, 13 are still floating gas, based on speed, days since loading, and lack of destination and diversions. Spot LNG prices in Asia LNG-AS are currently trading below $9 per million British thermal units (mmBtu) and could be as low as $8.50 per mmBtu for cargoes being delivered to North Asia, Singapore-based traders quoted as saying last week.
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Caught in Russia-Ukraine storm: a cargo ship and tonnes of grain
When the Island Bay cargo ship arrived from Beirut at the Kerch Strait, gateway to the Azov Sea, it sailed into a perfect storm of geopolitics and bad weather. The following day, Russia opened fire on three Ukrainian naval ships, impounded them and detained their sailors, some of them wounded. It then blocked the strait by putting a tanker underneath a new bridge it has built linking the Russian mainland to the Crimean peninsula it annexed from Ukraine in 2014. While the world digested the implications of the Nov. 25 incident, the most explosive clash in recent years, Russia said it had reopened the channel to the Azov Sea, which is shared by Russia and Ukraine. But Island Bay remained at anchor outside the strait, lashed by gale force winds and sleet, its hull icing over while cargo ships amassed on either side.
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Significance of Singapore’s open-loop scrubber ban
Last week’s announcement by the Maritime & Port Authority of Singapore (MPA) that it would ban open-loop scrubbers from its port waters from January 1, 2020 when IMO’s 0.5 percent global sulphur cap comes into force has set the cat among the pigeons for a growing number of owners opting to for exhaust gas cleaning for compliance with the regulation.
Taken at face value what Singapore does in terms of allowing or not allowing open-loop scrubbers is insignificant – the port waters of the city state are a miniscule fraction of the world’s oceans. However, Singapore’s place in world shipping mean that is indeed a significant move.
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Newcastle coal exports slide
Australian coal exports from the key harbour of Newcastle slid by 28 percent over the course of November to 7.1m tonnes amid the start of Chinese import restrictions, port data showed. Shipments from Newcastle were also down 1.3m tonnes, or 15 percent, compared to November 2017. Port stocks swelled by 42 percent month on month in November to 2m tonnes.
China has imposed restrictions on coal imports from mid-November that will last until the end of the year. It is Australia’s second-biggest market for thermal coal after Japan.
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Rising ship supply helps ease lng charter rates
Inflated spot charter rates for liquefied natural gas (LNG) tankers are easing as more ships becoming available, which could help increase LNG trade if Asian demand rises in coming months.
LNG charter rates are a key component of spot LNG trade, dictating the way the super-cooled gas is transported. Charter rates usually follow the price of LNG, which has fallen since September due to sluggish demand from Asian buyers. Rates have remained high for most of this year, hitting around $195,000 last month.
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Gasoline cars to get a new driver as ship owners covet an obscure fuel
Drivers of gasoline-powered cars could be about to face an unexpected source of competition when filling up at the pump: merchant ships. While giant freighters aren’t about to start running on the world’s main automotive fuel, they will have to start emitting less sulfur into the air in 13 months’ time to comply with new regulations. And when that day comes, vacuum gasoil — an oil refinery product that today often gets reprocessed into gasoline — may well be diverted to make shipping fuel.
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India’s private dredging firms will be out of bounds
As much as 76 percent of the 700 crore maintenance dredging market at India’s state-run major Port Trusts will be out of bounds for private dredging contractors after a consortium of four port trusts — Visakhapatnam, Deendayal, Paradip and Jawaharlal Nehru — buys the Centre’s 74.44 percent stake in the Dredging Corporation of India Ltd (DCI). This is because the four port trusts as the new owners of DCI will favour giving maintenance dredging contracts to DCI on nomination basis (without a tender) at their own ports. Private dredging contractors will be left with nothing if the four port trusts influence the other seven port trusts and one state-run corporate port (Kamarajar Port) to opt for the nomination route to award contracts.
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Ship line MSC sees over $2bn in annual fuel costs from imo rules
Swiss-headquartered MSC expects to pay over $2 billion a year in fuel costs due to tougher global marine fuel rules and will introduce a bunker charge next year to recoup expenses, the world’s number two container line said.
UN agency the International Maritime Organization (IMO) will prohibit ships from using fuels with sulphur content above 0.5 percent from January 1, 2020, compared with 3.5 percent, unless they are equipped with exhaust gas cleaning systems, known as scrubbers, to clean up sulphur emissions.