Tankers expected to emerge as the “winners” of 2023
It seems that each calendar year since 2020 has each own “winner”, when it comes to the part of the shipping industry which reaps the most benefits from the course of the global economy and trade. If 2021 was the year for containers and 2022 is the one for LNG tankers, it seems that 2023 could very well be emerge as the year of the tanker. In its latest weekly report, shipbroker said that “the tanker market has been gathering momentum over the recent months and freights are moving on an upward trajectory. Looking forward, the current market snapshot paired with the mid-term drivers, which shape the seaborne oil trade, is pivoting toward a bullish market in the coming months”. According to Ms. Chara Geourgousi, Intermodal’s Research Analyst, “amid the current fuel export quotas, granted by the Chinese government to the country’s refineries in an effort to boost its economy, the country’s crude oil imports for October have hit a 5-month high at 10.2m b/d, while they increased by 4 percent m-o-m.
Newbuilding activity picks up
Newbuilding ordering activity kept up its rising trend over the course of the previous week. In its latest weekly report, shipbroker said that “newbuilding market activity was kept at firm levels during the past week given the fair flow of fresh projects that came to light. A remarkable shift was recorded within the market as perspective buyers have now seemingly shifted their focus from LNG over to the dry bulk sector, with a big order for Newcastlemaxes emerging this week along with some smaller orders for Ultramaxes, all of which were placed in Chinese yards. It seems that the LNG market has temporarily lost some of its momentum in terms of fresh ordering during the last week with only one order for 2 surfacing. Despite this, given the current favourable market conditions prevailing in the Gas sector, this shouldn’t be taken as an overall trend prevailing, with more interest for new orders likely to emerge in the near term, especially as the winter months start to take a “bite” on global energy markets. The tanker market, after a short period of quiet, managed to showed signs of recovery this week”.
Momentous changes in the cargo ship fleet
Asteady growth trend has evolved in the world merchant ship fleet during the past few years. But this broad view hides contrasting changes among the main vessel types. In the period ahead, further large variations are likely among categories.
Bulk carriers, tankers, container ships, and liquefied natural gas carriers are the four biggest categories, together comprising 90 percent of the entire world merchant ship fleet’s carrying capacity. In each of these segments newbuilding deliveries and scrapping volumes have varied both over time and in proportion to the existing fleet size. Greatly differing annual growth rates resulted. However in 2022 more uniformity is expected to be the outcome, followed by a resumed wider pattern of increases in 2023.
Ship recycling in dire straits
The ship recycling market is in a state of disarray, as tonnage availability has been scarce. Even when there are potential candidates, things aren’t quite that simple, as a result of a shortage of dollars in Bangladesh. In its latest weekly report, shipbroker said that “it is the start of the World Cup this weekend and all eyes are on Qatar as they are the host the first global football tournament in the Middle East, we expect this to be the most excitement recyclers will see for the next few weeks, as the market once again, can only be described as non-existent. This is despite, finally some positive news for the industry, with two Capesizes in the market now ready to be sold, but with them receiving very little interest. We have previously mentioned in reports that there is a shortage of dollars in Bangladesh, which has resulted in banks being unable to open Letters of Credit, this means all ships arriving to the Chattogram shores failing to be delivered.
The EU ETS maritime regulation must be truly green
The total climate footprint from production to combustion should be considered in the EU ETS for maritime. The World Shipping Council joins with Danish Shipping and renewable energy producers, shipowners and other organisations in an open letter to EU’s decision makers.
The European Commission has proposed to include shipping in the EU’s emissions trading system (ETS) as from 2023. The crucial details in the regulation are currently being negotiated and therefore the World Shipping Council, Danish Shipping and several other organisations representing the full value chain behind green fuels are asking policy makers to push the regulation in the greenest possible direction.
Impact of Russia’s invasion of Ukraine
To date, the European Union (EU) has announced concurrent sanctions packages covering individuals, entities and traded goods, with the most recent 8th package released in October. The forthcoming oil price cap defined by the U.S. takes effect on 5th December for crude oil and 5th February for refined products. The cap will attempt to curtail the sale of Russian seaborne oil unless it is purchased at or below the price cap. At the time of publication, the price has not been set but a ‘coalition of countries will conduct a technical exercise to consider a range of factors and, aided by a rotating lead coordinator, reach consensus on the level at which the price cap is set. The number of vessels in the Joint War Committee Crimea zone is falling. Previous updates on vessel activity noted that in July 442 vessels (of which 101 were dark for 7 days or more) has now dropped to 361 and 59 are dark for 7 days or more.