Product tankers in Asia to keep benefiting from Australian demand
Product tankers and more specifically, MRs are to keep benefiting from increasing demand from Australia. In its latest weekly report, shipbroker said that “in recent years, Australia’s refining sector has undergone a profound structural shift. Refinery rationalisation and Covid-19 related demand pressure led to the closure of several struggling refineries, following a prolonged downward trend. Recognising the implications for national security, the Australian Government intervened to keep the nation’s two remaining refineries – Lytton (109 kbd) and Geelong (120 kbd) in operation until at least 2027. Still, declining refining runs have driven a significant increase in Australian CPP imports since mid-2020 as the need to replace this lost refinery output ramped up, lending support to the regional MR market, with growing trade both from SE Asia and the Far East”.
Capesize market keeps improving, albeit at a slower pace
The Capesize lifted $2,401 for its time charter average on Tuesday, but failed to keep up the uprising trend throughout the week. It closed at $15,867, which is still an improvement week-on-week. The Atlantic basin cooled off in the middle of the week with limited cargoes lending further support. The fronthaul run eventually slipped beneath $30,000 on Friday. In the Pacific, the backhaul run was one step away from coming back to positive territory and is currently marked at -$333. The west Australia to Qingdao run climbed above $9, but soon declined back to the mid/high $8s. Coal from east Australia to China appeared active, with some paying close to $20,000 for a round trip at one stage. It proved to be a muddling week for the Panamax market, which started out positively for owners but ends on something of a tepid nature.
Tanker rates moved to higher ground last month
The tanker market reached a higher ground during February. According to OPEC’s latest monthly report, “dirty freight rates improved in February, with m-o-m gains in VLCCs and Suezmaxes outpacing declines in Aframaxes. VLCCs picked up from a low base, as renewed demand for long-haul vessels strengthened rates. On the Middle East-to-East route, dirty spot freight rates rose 22 percent m-o-m. Gains in Suezmax spot freight rates earned back some of the previous month’s losses, with rates on the US Gulf Coast-to-Europe route up 18 percent from the previous month. By contrast, Aframax rates declined, although from high levels. Spot freight rates on the intra-Med route decreased by 18 percent m-o-m. Overall, the tanker market remained firm in the first two months of 2023.
Vesselsvalue: Russian LNG exports to Europe remain high
Russian LNG exports to Europe remained at very high levels in February at 3.6 million CBM, following a 13 month high in January of 4.1 million CBM. Last month, Belgium imported the largest amount of Russian LNG, accounting for 38 percent of imports to the EU, while Spain ranked second with a share of c.23.9 percent, followed closely by France with c.23.8 percent. Currently, there are no sanctions on Russian LNG imports. Despite this, there has been a strong push to source energy from other countries since the start of the conflict with Ukraine last year. Amidst the backdrop of an energy supply crunch, exports from Russia have remained relatively unchanged.
Second hand vessel deals down 50pc so far this year
The second hand market for ships has declined to just $7 billion, versus $13.5 billion in the same period of 2022. In its latest weekly report, shipbroker said that “the global economy is holding its breath as two American banks, Silicon Valley Bank & New York’s Signature Bank collapsed withing the past three days. US authorities raced on Sunday to stem jitters about the health of the nation’s financial system, pledging to fully protect all depositors’ money while also giving any banks squeezed for cash easier terms on short-term loans. Authorities are aiming to strengthen confidence in the banking sector and avoid any spill over effects. How and for how long these collapses will affect economy and whether there will be aftereffects for the shipping industry and finance are yet to be seen”.
Think bigger: learning organisations
The ‘VUCA’ (volatile, uncertain, complex, ambiguous) environment has been exacerbated by the lingering Covid-19 pandemic, the ongoing war in Ukraine and the fast pace of technological development in an increasingly competitive environment. At the same time, the maritime industry needs to ramp up its decarbonisation efforts, and individuals and organisations alike must ensure they have the clarity and agility to meet current and future challenges. While uncertainty prevails on decarbonisation and alternative fuels, the ‘future’ is also here in the sense that seafarers already need training in the safe handling and storage of a range of new fuels.
Dry bulk: larger vessels in high demand
Larger dry bulk carriers have been in high demand among shipowners lately. In its latest weekly report, shipbroker said that “off the back of orders for four Ultramax vessels last week, another three were reportedly ordered at the same yard, Nantong Xiangyu Shipbuilding, by Indonesian firm Tanto Intim Line. Ultramax vessels have accounted for over half of dry bulk newbuildings so far this year and is a part of the trend among owners for vessels for larger vessels within the smaller size segments. Over 2023 and 2024, over 70 percent of deliveries of these vessels will be for Ultramaxes, around 10 percent for Supramaxes and roughly 20 percent Handymaxes.