Demolition market off to a good start
Ship owners have been more active in the demolition market this week, as freight rates have retreated in most markets, triggering an exodus of older units. In its latest weekly report, shipbroker Clarkson Platou Hellas said that “it would appear that many more vessels are being talked around the market with Owners starting to consider options for their vintage units, especially as they start to adjust themselves to the IMO 2020 regulations and look for business opportunities. This has been further prompted by the Baltic dry index which has destabilized this week, especially in the Capesize sector, which has generated more enquiry from Owners as recent sales also catch their eye and turn their attentions to the recycling industry.
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LNG as marine fuel revealed to be worse than business
A new report from the International Council on Clean Transportation (ICCT) has found that the most popular Liquefied Natural Gas (LNG) ship engine, particularly for cruise ships, emits between 70 percent and 82 percent more life-cycle greenhouse gas (GHG) emissions over the short-term compared to clean distillate fuels. The shocking new report, “The climate implications of using LNG as a marine fuel”, comes as the shipping sector grapples with its enormous climate footprint, and more ship operators are turning to LNG as a purported climate solution. The ICCT report examines the lifecycle GHG emissions from marine fuels, including a previously poorly understood source of climate emissions from LNG-powered ships — the unintentional releases of the climate super-pollutant methane from ship engines, known as methane slip.
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The US crude oil factor in the tanker market
The US crude oil export market is fast becoming a major one for tankers. In a recent report, shipbroker Banchero Costa said that “driven by the shale oil boom of the last decade, the United States have rapidly increased both the production and the export of crude oil and oil products. Seaborne crude oil exports from the USA reached 128.4 mln tonnes in 2019 (excluding domestic cabotage), based on Refinitiv ship tracking data. This was +46.9 percent up from the 87.4 mln tonnes of crude oil exported in 2018. Crude production and exports from the US are driving shifts to the global trade patterns – incremental US exports have largely moved to Asia and Europe”.
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US-China phase-1 deal brings limited cheer for lng shipping
With 25 percent tariff on LNG still in play, the Phase-1 deal between the US and China is not expected to bring any significant change in the LNG trade between the two countries. However, with China requiring additional LNG supplies in the coming years, the US still has the opportunity to become an important supplier for the soon-to-be world’s largest LNG market. The US and China recently announced a Phase-1 deal to reduce the trade tensions between the two countries, wherein the latter pledged to purchase $200 billion worth of US goods, which includes $52 billion of energy products such as coal, crude oil, refined products and LNG. The de-escalation in tensions marks a welcome step towards improving the global economy, which has suffered due to the trade dispute between the two large economies. However, when it comes to LNG, the effect will be limited as China has retained its 25 percent tariff on US-sourced LNG. The tariff will critically restrict any development of LNG trade between the US and China, especially in the current market scenario where LNG supplies are abundant and prices are at an all-time low.
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The good, the bad and the ugly: unmanned ships
The world is interconnected through global trade on the basis of a transportation industry. And, it will continue to grow, with a predicted rise of nearly a third in seaborne-trade towards 2030, and with increases in tonne-mileage up to 74,000 billion over the forecast period. In other words, the ocean will experience substantial increases in traffic, pressure will get much higher and risk of marine accidents and incidents at sea will persist. It is estimated that roughly 90 percent of marine casualties and incidents caused by human mistakes, costing over EUR1.4 billion in marine liability insurance claims. This in fact has urged businesses to invest in automation underpinned by transformational technologies of Artificial Intelligence (AI) and machine learning, as the ultimate solution to improve productivity, efficiency and safety by eliminating human errors.
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The Libyan effect comes to the fore once more
The tanker market is having to cope with yet another Libyan crisis and its effect in the flow of crude oil cargoes from the Northern African country. In its latest weekly report, shipbroker Gibson said that “yet again, global crude production has taken a major hit. Late last week forces loyal to the Libyan National Army (LNA) began shutting down oil ports along the Libyan coast. Latest reports suggest that almost all of Libya’s production has been taken offline as ports remain blockaded and storage tanks begin to fill”. According to the shipbroker, “the latest available information suggests that crude exports have ceased from Marsa Al Hariga, Zueitina, Marsa El Brega, Ras Lanuf and Es Sider. Only the offshore terminals of Bouri and Farwah are reported to be operational, whilst some exports from Zawia and Mellitah have been observed this week, despite pipeline closures.
