Tanker market looking for direction post-OPEC+
Shipping is eagerly awaiting for the impact of OPEC’s decision in the oil market and subsequently the crude tanker market. In its latest weekly report, shipbroker said that a year ago, US crude production reached its highest level ever, averaging 12.9 million b/d in November 2019. At the time, many were convinced the sector was set for robust growth in the years to come. However, the global pandemic, a brief but fierce oil price war and an unprecedented negative WTI prices back in April changed all that. In May, US output plummeted to just 10 million b/d, nearly 3 million b/d below its peak. A partial rebound to 11.25 million b/d was seen by November on the back of firmer oil prices. Yet, the US Energy Information Administration (EIA) still predicts domestic output to edge down by around 300,000 b/d by July 2021, as production from new wells is unlikely to be sufficient to offset legacy well declines. The turning point is expected to happen around mid-2021, with output climbing modestly above November levels by the end of 2021, if WTI prices remain consistently above $45/bbl.
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Newbuildings back in the Foray
Ship owners appear to be making a final push in the newbuilding market, prior to the end 2020, in anticipation of improving market conditions, moving forward. Recently shipbroker said that a strong push was noted in the newbuilding market during the past week or so, given the plethora of fresh deals coming to light. This came hardly as surprise, despite the step back in volumes seen just the week prior. For the dry bulk sector, the focus stayed solely on Kamsarmax units, given the firm number of vessels being placed. In the tanker sector, there was a higher variety in new orders, with presence of both larger and smaller size units. It is true, that the prolonged bearish mood in freight earnings hasn’t been of much help in providing a more stable trend in the newbuilding market for all the different size segments. As for the other main sectors, the container market pushed things further as of the past week, with a seemingly strong appetite at this point.
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Could Australian Seaborne coal trade disruption lead to higher ton-mile demand?
China’s and Australia’s trade tensions, which have led to disruptions in the ever so important for the dry bulk market, coal trade, could potentially lead to more long-haul charters. For example, Canada is the seventh largest exporter of coal in the world. In calendar 2019 the country exported a total of 58.7 million tons of coal by sea. Canada is also the world’s fourth largest exporter of metallurgical coal, after Australia, the United States and Russia. Nearly half of the coal produced in Canada is thermal and half is metallurgical. Canada’s exports are primarily metallurgical coal. Alberta and British Columbia produced 85 percent of Canada’s coal.
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Argentina’s main grains port workers’ unions launch new wage strike
Argentine grains inspectors and oilseed workers started a new wage strike on Wednesday, organizers said in a joint statement, as stalling contract negotiations threatened to interrupt exports from one of the world’s main bread baskets. Argentina, a top global supplier of corn, soybeans and wheat, is prone to work stoppages as employers are hard-pressed to increase wages faster than the country’s high inflation rate. Argentina is the world’s top exporter of soymeal livestock feed, used to fatten hogs and poultry from Europe to Southeast Asia. Given the persistent lack of willingness on the part of export companies to reach a wage contract, the struggle continues. The labor organizations were asking for excessive salary increases. The URGARA union, representing workers who inspect grains at port, also issued a statement announcing the strike. Argentina’s grains sector has been hit by a spate of strikes and contract stand-offs with unions throughout the production and export chain. Corn and soy, the country’s main cash crops, are currently being planted. With wheat harvesting having just started, December is not peak export season.
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Ports of Stockholm to connect cruise ships to onshore power
Ports of Stockholm have been awarded funding from the Swedish Environmental Protection Agency and the EU for investing in onshore power supply intended for cruise ships. By plugging into onshore power supplied from the local electricity grid cruise ships can shut down their engines and significantly reduce their environmental impact. The project is a joint initiative the port authority is undertaking together with the Baltic Sea ports of Copenhagen/Malmö, Aarhus, and Helsinki. Under the project, Ports of Stockholm will invest in equipping two central quays in Stockholm with high voltage onshore power connections. The project will start in December 2020. The work to equip the two central quays with onshore power connections is scheduled to be completed, respectively, in 2023 and 2024. Aside from reducing carbon dioxide and air pollutant emissions from cruise ships in Stockholm and throughout the Baltic Sea, providing onshore power according to a common international standard at these ports will also enable cruise ships and shipping companies to invest in and connect to onshore power according to the same standard, the port said. In 2019, over 656,000 cruise passengers and an additional 240,000 crew members visited Stockholm. Collectively they spent more than €57 million on hotel rooms, food, sightseeing excursions, shopping etc. In addition, the cruise shipping companies spent a total of €25 million on harbour dues, pilotage dues and fairway dues in Stockholm.