GLOBAL SHIPPIG REVIEW
Apr 24 - 30, 2017
DRY BULK MARKET SPRINGS A SURPRISE - BUT SWEATS ON SLOWER 2ND HALF
Maritime Strategies International (MSI), a leading independent research and consultancy has forecast a positive short term outlook for dry bulk freight rates, but has cautioned on second half prospects.
MSI notes a persistent and positive shift in dry bulk market sentiment in recent weeks, with most Baltic indices at their highest point of the year. Capesizes led the charge with spot rates rising to almost $20,000/day in late March – more than five times their levels of just a few weeks earlier, although they have since fallen to $15,000/day. Meanwhile Panamax rates have risen above $11,000/day for the first time this year, having averaged $7.500/day during February. Handysizes are now over $8,000/day, up almost 50percent since February.
ROTTERDAM BUNKER SALES SLIP BY 8.2PC
Marine fuel and lubricant sales at the port of Rotterdam was dropped by 8.2 percent in the first quarter of 2017. Total sales fell to 2.48 million cu m, down by 8.2 percent compared with Q1 last year. Fuel oil sales were declined by 8.1 percent to 2.06 million cu m, while marine gasoil and marine diesel oil sales together sank by 8.5 percent to 391,647 cu m. Marine lubricant sales fell by 6.8 percent to 25,603 cu m.
At the port of Singapore, the world’s largest bunkering hub, marine fuel sales excluding lubricants over the same period jumped by 7 percent to 12.65 million mt (13 million cu m).
IN 2020, SHIPPING INDUSTRY FACES SEISMIC SHIFT AS SULFUR CAP LOOMS
In 2020 the shipping industry is facing its biggest change since the shift away from burning coal a century ago as the IMO is set to impose a new 0.5 percent sulfur cap on marine fuel emissions. The alarm bells are ringing for the bunker market after the International Maritime Organization in October decided to cut the global marine fuel sulfur content limit from 3.5 percent to 0.5 percent from the start of 2020. But so far it seems the industry is sleep-walking, or at least in a state of paralysis, as to what steps to take to be ready for this huge environmental and regulatory change. These are challenging times.
The bunker world is already reeling from the bankruptcy of South Korean container line Hanjin Shipping last year which added to jitters about the creditworthiness of shipowners, and demand is at a low ebb.
IRAN MAY KEEP SAME OIL OUTPUT IF OTHERS EXTEND CUTS
Iran will probably be allowed to keep its oil production unchanged if OPEC decides to extend its six-month agreement on output cuts beyond June. Iran was allowed to increase its output under the deal as the nation rebuilds from international sanctions that crippled its energy industry. Since sanctions were eased in January 2016, Iran’s oil production has climbed 35 percent.
It has stabilized this year, gaining less than 2 percent. Iran pumped just shy of its 3.8 million barrels a day allowed under the deal in the first quarter.
WEAKER CAPESIZE RATES WEIGH DOWN BALTIC FREIGHT INDEX
The Baltic Exchange’s main sea freight index, tracking rates for ships carrying dry bulk commodities, fell on Tuesday on weaker rates for capesize vessels.
The overall index, which factors in rates for capesize, panamax, supramax and handysize shipping vessels, was down two points, or 0.15 percent, at 1,294 points. The capesize index lost 29 points, or 1.29 percent, to close at 2,220 points.
Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as iron ore and coal, were down $207 to $16,154. The panamax index was up 10 points, or 0.62 percent, at 1,621 points, its highest level since January 2014. Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 to 70,000 tones was increased $79 to $12,987.
Among smaller vessels, the supramax index fell 1 point to 898 points, while the handysize index rose 3 points to 563 points.
GOVT AWARDS 49 PORT PROJECTS WORTH RS 8,300 CRORE IN FY17
The government awarded 49 port projects with an investment of Rs 8,341 crore in the previous fiscal, which will result in the capacity addition of 104 MT.
This was against the target of 102 million tones per annum (MTPA) capacity augmentation. In respect of the development of port infrastructure, 49 projects have been awarded a capacity of 103.52 MTPA against a target of 102 MTPA with an investment of Rs 8,341.12 crore during the last fiscal.
It is said that concerted efforts to improve port infrastructure have resulted in the highest ever capacity addition of 100.59 MT in major ports during the last fiscal. Major ports capacity during 2015-16 was 965.36 MTPA. This crossed 1,065 MTPA during 2016-17.
GLOBAL SEABORNE TRADE
It is difficult to quantify the value of volume of world seaborne trade in monetary terms, as figures for trade estimates are traditionally in terms of tons or ton-miles, and are therefore not comparable with monetary-based statistics for the value of the world economy.
However, the United Nations Conference on Trade and Development (UNCTAD) estimates that the operation of merchant ships contributes about US$380 billion in freight rates within the global economy, equivalent to about 5 percent of total world trade. Over the last four decades total seaborne trade estimates have quadrupled, from just over 8 thousand billion ton-miles in 1968 to over 32 thousand billion ton-miles in 2008.