Designated ‘net-zero’ lanes could push the shipping industry to clean up its act
The world’s ever growing global economy runs on shipping – this means that supplies from food to building materials. Some of the items and materials we order online (including from huge companies like Amazon) from overseas often make it to our doorsteps thanks to shipping lanes and canals that connect the world. Shipping canals all over the world connect ships from one body of water to another and help shorten trips by having vessels go through land masses, versus around them. Some famous canals that connect international trade include the Panama Canal that connects the Atlantic Ocean to the Pacific Ocean. However, this isn’t a perfect system. There are snags that often mess up the global supply chain. Take the pandemic and other supply chain issues from this past year.
First electric autonomous cargo ship launched in Norway
Zero emissions and, soon, zero crew: the world´s first fully electric autonomous cargo vessel was unveiled in Norway, a small but promising step toward reducing the maritime industry’s climate footprint.
By shipping up to 120 containers of fertiliser from a plant in the southeastern town of Porsgrunn to the Brevik port a dozen kilometres (about eight miles) away, the much-delayed Yara Birkeland, shown off to the media on Friday, will eliminate the need for around 40,000 truck journeys a year that are now fuelled by polluting diesel.
“Of course, there have been difficulties and setbacks,” said Svein Tore Holsether, chief executive of Norwegian fertiliser giant Yara.
Pacific LNG freight spot rates hit fresh record high on strong vessel demand
Tanker rates to ship liquefied natural gas (LNG) across the Pacific hit a fresh record high on Friday as high demand for the U.S. super chilled fuel from Asia drives up the demand for vessels, industry sources told. The cost of chartering a vessel to carry a shipment of LNG from Australia to Japan jumped to a record high of $335,000 per day, according to data intelligence firm Spark Commodities.
The jump comes ahead of the peak winter consumption season and is spurring concern among Asian buyers that colder-than-normal weather could be exacerbated by the shortage of ships, pushing costs of the electricity feedstock even higher.
“There is almost no available shipping in either basin and demand from key Japanese and Chinese buyers has risen, particularly following weather forecasts that China is entering a cold snap that will see temperatures drop by 6-10 degrees, boosting heating demand,” said Robert Songer, LNG analyst at commodities intelligence firm ICIS.
Unlike Europe, there is almost no long range gas storage in Asia and spikes in demand are felt more immediately in the LNG market.
Trans-pacific all-inclusive rates primed for rebound ahead of LNY
All-inclusive container rates on the trans-Pacific route are set to jump again ahead of the Lunar New Year holiday in February as retailers engage additional inventory replenishment.
Market sources expect a renewed flurry of booking activity beginning in late November and through December as US importers aim to beat the Lunar New Year production and export slowdown in China.
This is likely to lend further support to freight rates, which could result in a return of escalated premium levels seen during the August and September peak period.
One carrier source said that their volume expectations had increased for the November-January period and expects significant space premiums to begin during the week of Dec. 6. “We’re seeing quite some demand, particularly from big box retailers, who need to move cargos out before January,” the source said. “They have asked us for large premium services which is putting pressure on space available.”
Tankers: VLCC market in lackluster mode
Rates have slipped slightly again this week in the Middle East Gulf and Atlantic regions. For the 280,000mt Middle East Gulf to US Gulf (Cape/Cape routing) trip rates are assessed as static at just below WS22. Meanwhile, the rate for 270,000mt Middle East Gulf to China fell another point to WS42.5 (a roundtrip TCE of $1.9k/day). In the Atlantic, rates for 260,000mt West Africa to China eased half a point to between 44/44.5 level (a TCE of $5k/day roundtrip) and 270,000mt US Gulf to China recovered $31,250 to $5.45625m (a TCE of $9k per day roundtrip).In West Africa, the market eased again with the rate for 130,000mt Nigeria/UK Continent down five points from a week ago at WS63.5 level (showing a roundtrip TCE of about $3.4k/day). However, the latest reports have ST taking a Stena vessel at WS62.5 for the Europe option. The market for 135,000mt Black Sea/Med has fallen six points to WS75 (a TCE roundtrip of about $1.9k per day). The market for 140,000mt Basrah/Lavera has again been quiet and rates are assessed three points weaker at WS32.In the Mediterranean, the market for 80,000mt Ceyhan/Lavera has fallen 10 points to WS117 ($13k per day TCE roundtrip).
Global companies set to deliver record dividends this year
Global corporate dividends are set to reach a record high this year, as a rebound in business activity and a rise in consumer demand boosted profits for most sectors which were hit by the pandemic last year.
According to data for 3,394 global companies with market capitalization of at least $1 billion, their total payouts to shareholders are estimated to be $1.37 trillion in 2021.
Dividends slumped last year against the backdrop of the COVID-19 pandemic and as regulatory constraints and government pressures to restrict payments weighed.
“The robust growth in dividend payouts by global companies reflects the sharp snapback in earnings post the pandemic-driven weakness. Dividend payouts are normalizing alongside economic stability and corporate confidence,” said Geoffry Dailey, senior portfolio manager at BNP Paribas Asset Management.