Why Mexico is ideally placed to become a zero-carbon shipping fuels hub
With the International Maritime Organization calling for a 50 percent decrease in international shipping emissions by 2050 compared to 2008 rates, stakeholders across the maritime value chain are committed to commercializing and scaling zero-carbon vessels and fuels by 2030.
According to a study conducted by Ricardo and the Environmental Defense Fund for the P4G-Getting to Zero Coalition Partnership, which also includes the World Economic Forum, Mexico has the potential to play a key role in transforming global shipping through green hydrogen-derived fuels and clean electricity.
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Chinese oil imports hurt tanker trade in 2021
A slow down in seaborne crude oil imports from China, the biggest market for tankers, has inevitably hurt the segment in 2021. In its latest weekly report, shipbroker Banchero Costa said that “the year 2021 was once again a very bad year for crude oil trade. Total loadings in the whole 12 months of 2021 were down -2.5 percent yo-y to 1,983 mln tonnes, excluding USA-USA cabotage, according to vessels tracking data from Refinitiv. This follows an even more dramatic -6.1 percent y-o-y decline in 2020. However, things did appear to improve steadily throughout the year, and especially in the final quarter of 2021”. According to the shipbroker, “in 1Q 2021, global crude oil loadings were down -12.6 percent y-o-y at 474.8 mln tonnes, the worst quarter in at least a decade. In 2Q 2021, loadings were still down -5.7 percent y-o-y at 486.1 mln tonnes. In 3Q 2021, they were again marginally up to 489.9 mln tonnes, technically up +1.6 percent y-o-y, albeit from a very low base in 2020.
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Smells like sustainability: harnessing ammonia as ship fuel
It smells pungent and if a mere 0.5 percent of the air you breath consists of it, it will kill you. And yet ammonia is being heralded as one of the best zero-carbon fuel options for deep-sea shipping in particular. In this article we will highlight some of the central questions that need to be answered before ammonia-fuelled ships can hit the water, including the supply, sustainability, engine technology and the necessary safety considerations.
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Demand boosts demolition rates, could lead to more scrappings
Demand from ship recycling yards for more vintage tonnage, has already increased rates, which in turn, could lead to a rise in overall supply. In its latest weekly report, shipbroker Clarkson Platou Hellas said that “as the week moved at a snail’s pace whilst the Far Eastern markets celebrated their Lunar holidays, price levels continued to jump northwards as the current supply of tonnage to the market gives no satisfaction to the demand from the recyclers. The Indian Union Budget for 2022-2023 was announced in India this week, the outcome of which fuels the positivity towards the recycling market through the year as strong demand for steel looks set to remain.
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Tankers: oil supply boost expected to provide support to the market
Oil supply is expected to increase considerably during the course of 2022, providing tankers with a much needed support. In its latest weekly report, shipbroker Gibson said that “the decision by OPEC+ to raise output by another 400kbd in March came as little surprise to the oil market, which had largely priced in further modest output increases from the group. It took ministers just 16 minutes to sign off on the 400kbd uplift, yet even with this, the fact remains that the wider OPEC+ group pumped 790kbd below target in December. Yet despite these shortcomings, the International Energy Agency (IEA) calculates that if OPEC+ maintains its current strategy through this year, then oil supply is primed for a 6.2mbd increase in 2022, which if delivered, would represent the largest ever annual increase in oil supply”.
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Clogged supply chains won’t hold back trade
World trade normalises and continues to grow despite challenges.
Going into 2022, we expect trade growth rates to return to their pre-pandemic levels in line with a continued but weakened global economic recovery. 2021 was an exceptional year driven by pandemic-related catch-up effects. For this year, we pencil in a growth rate in merchandise world trade of 4.1 percent, while we expect world GDP growth to come in at 4.4 percent. Despite ongoing supply chain frictions and average containerised transport costs expected to remain high, a shift by consumers back into services will only be moderate in 2022 because of Covid caution. They might reduce some of their increased spending on the likes of electronics and furniture while resuming spending on services, while seeing higher energy and food prices.