Newbuilding activity showing signs of “life”
Most of the activity these days is centered around the S&P market, with ship owners looking for quality tonnage, mainly in the dry bulk market. However, some activity was also evident in the newbuilding market as well. In its latest weekly report, shipbroker Allied Shipbroking said that “it seems as though we have seen some sort of revival in buying interest in newbuilding projects as of late, as a series of fresh orders came to light during this past week. In the dry bulk sector, the increased activity of previous week resumed, with orders amounting to a further 6 units being added to the orderbook. Given the relatively encouraging scene that we were witnessing in the freight market during the previous couple of months, we are starting to see higher conviction that the worst part of the drop in demand has passed.
Ship owners shun away from the demolition market
Despite enough potential supply of tonnage primed for demolition, it seems that the conclusion of deals has been elusive over the course of the past few weeks. Ship owners appear to be shying away from doing more deals with scrapyards. In its latest weekly report, shipbroker said that with Halloween taking place across the globe this weekend, it comes at a time when the market feels particularly eerie in terms of the lack of activity and tonnage that is available and concluded. It seems we have been saying this for weeks now, with no real momentum being built up at all and owners interests remain elsewhere. According to the shipbroker, most units that may be workable are from the Offshore and Cruise sector where they remain the only two real depressed trading markets at this current time, but with the VLCC freight market starting to decline, the real possibility is that we could see this type of unit enter the market place during the remainder of this year.
Containership fires – keeping up the pressure for change
Cargo related fires on board container ships have been the topic of frequent discussions in the industry in recent years. Luckily, we have not lately seen large casualties like the Yantian Express, Maersk Honam or the MSC Flaminia. However, the fundamental challenges remain the same and with them the need to keep up the pressure for change – one year after the Gard conference on this issue. There has been no shortage of smaller fires, near misses on-board and fires occurring in containers within terminal areas. Swift action from the crew, but also some good fortune can be the difference between a small fire and a large-scale casualty.
Tanker market braced for tough winter months
The tanker market is looking at more months of losses and negative pressure on freight rates, as a result of worsening fundamentals. In a recent weekly report, shipbroker said that it has been a catastrophic 3rd quarter for the crude oil tanker market, with freight rates plunging to new lows, mounting the pressure on owners, many of which had been anticipating a market rebound to much better levels. This downward trend has been mainly sourced by the significant drop in demand due to the COVID-19 impacts on the global economy, with some concerns now being expressed on the supply side fundamentals as well, which could ultimately affect the long-term prospects of the sector as well.
India bound to make waves in the tanker market
India is gearing up to become a major player in seaborne oil demand, offering a valuable boost in the tanker market. In its latest weekly report, shipbroker said that like most nations, Indian oil demand has come under considerable pressure in 2020 as covid-19 derailed the country’s continual demand growth. Nevertheless, the longer-term prospects for Indian oil consumption are good with demand already rebounding even as covid-19 continues to impact the wider economy. Furthermore, this rebound in demand is evident in both refinery and crude buying activity. Indian refinery runs gained 10 percent month on month reaching 86 percent in September, with further gains expected for November and December. Government sources have suggested that oil demand could be back to pre-covid levels in the first quarter. Furthermore, official data showed that September gasoline demand recovered to 2.45 million mt, the highest since February and 3 percent up YOY.
China’s crude oil imports: trading patterns largely unchanged so far this year
China has emerged as a major “player” in the crude oil import market. In a recent weekly report, shipbroker said that China’s crude oil imports exceeded all expectations so far in 2020, as the country tried to take advantage of very low oil prices. In the first 9 months of 2020, China imported 370.7 million tons of crude oil by sea. This represents a net increase of +14.2 percent y-o-y compared to the 324.6 million tons imported in the same period of 2019, and is also +26.2 percent higher than the 293.8 million tons imported in Jan-Sep 2018.