Decarbonisation a defining financing factor
Shipping companies that do not have a strategy to decarbonise are likely to be pushed out of the market as financing options become more expensive, according to Stephen Fewster, global head of shipping finance at ING Wholesale Banking. A member of the panel at the Baltic Exchange’s “Freight Financials – Charting the Recovery” webinar, Fewster was responding to the question of whether ship finance is likely to become more expensive for companies that do not accept decarbonisation.
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Tanker demand could receive a welcome boost in the coming weeks
The Tanker market could receive a very welcome boost in the coming weeks and months, mainly in the Middle East to Asia benchmark routes. In its latest weekly report, shipbroker said that “following the oil price sell off during most of August, partly triggered by oil demand fears amid the delta COVID variant, oil prices have resumed their upward trend since August 20th. Brent futures have been trading higher over the past couple of weeks, with hurricane Ida idling US Gulf oil production and providing support. In addition, traders saw a buying opportunity following the OSP price cuts into Asian refineries. Positive news on Covid developments and also Chinese data suggesting crude oil inventories stand at the lowest level since June 2020 are also interpreted as bullish for oil consumption and economic momentum ahead”.
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Ship recycling inclusive approach at the time of cop26
In recent times, the Indian Prime Minister Mr. Narendra Modi unveiled, the scrapping policy of cars and vehicles. The centre for the recycling of cars and vehicles is none other than the place where ships are being recycled: Alang, Bhavnagar. Early this year during the Union Budget, India has set an ambitious goal of doubling the ship recycling capacity by 2024 with the goal of generating 150000 Jobs and boosting the ship recycling share from 30 percent to 50 percent. Thereafter, India enacted the Recycling of Ships Act, 2019 and acceded to the Hong Kong International Convention, which will make around 90 yards at Alang: Hong Kong Convention compliant. This initiative comes at a time just before cop 26 and the IPCC report as we can collectively understand that recycling is a readily Deployable instrument for any government to battle climate change.
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New mega-refinery in Nigeria to make waves in the tanker market
The tanker sector is about to witness a dramatic impact from the Dangote Refinery, currently under construction in Nigeria. The biggest refinery in Africa is expected to make its mark in the tanker market. In its latest weekly report, shipbroker said that “the news that the Nigerian National Petroleum Company (NNPC) intends to take a 20 percent stake in the $18 billion under-construction Dangote Refinery caused us to stop and consider what the impact of this would be. Then a couple of weeks later it was announced that NNPC will supply at least 300k b/d of crude to the 650 k b/d refinery. This is a bold move as it will bolster domestic supply security to the new refinery and guarantee an outlet for the country’s crude.
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Dry bulk market: capesizes reach new year-high levels
Both the overall index and the time charter average jolted significantly higher on Monday, reaching new highs for the year while also closing in on the market highs of 2010. With the surge of C5 west Australia to Qingdao run and the relevant transpacific C10, as well as the support from Brazil to Qingdao trade, the Capesize market pushed even higher on Tuesday but slipped in the middle of the week. The week closed on positive notes with C5 paid up to $16.773, while Brazil to Qingdao run climbed over $35.00 on Friday. In the North Atlantic, transatlantic remained relatively quiet with the index posted at $64,400 at the end of the week. On the period front, a 180,000-dwt 2010-built vessel delivery Singapore in early October was reportedly fixed for a minimum period of 24 months at $25,500.
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Shifting supply chains to mitigate acute port congestion: a sustainable solution?
As we all turned the calendar to the year 2021, many shared a sense of optimism about the prospects of a new year. The high efficacy rates and increasing distribution of multiple COVID-19 vaccines were expected to eventually help reopen economies and jump start the sense of a “new normal.” But as demand began to recover in a big way, optimism was soon tempered as supply chains faltered publicly through some significant high-profile events: the Suez Canal blockage, U.S. West Coast port congestion, skyrocketing prices for raw materials, and the Yantian port congestion bottlenecking mainland Chinese exports. Some progressive companies have reportedly turned their innovative talents upstream to the supply chain in search of creative navigation amid these logistics challenges.
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Tanker rates remain depressed during August
The tanker market remained in depressed levels throughout the month of August. According to the latest monthly report from OPEC, VLCC tanker rates remained at depressed levels in August, weighed down by ample tonnage availability and a lagging increase in tanker demand. Suezmax and Aframax rates managed a better performance in intra-Asian routes, as well as the Atlantic Basin, particularly from West Africa to the US Gulf Coast. Clean tanker rates showed a healthy improvement East of Suez but slipped in the West. The arrival of Hurricane Ida in the Gulf of Mexico at the end of the month resulted in temporary dislocations, temporarily lending some support to dirty Aframax rates, while depressing clean rates in the early days of September as Gulf Coast refineries remain offline.