Canada-India row: navigating the downside risks to dry bulk?
The Impact on dry bulk shipping demand is likely to be minimal as the bilateral relations between Canada and India crumbled to an all-time low.
The Political row between Canada and India escalated last week, with both countries taking diplomatic actions to take a stance. The trade talks between the two countries have already been halted. However, Drewry expects a minimal impact on dry bulk shipping, even if trade between them deteriorates further.
Ship recycling activity enters slow season
The Ship recycling market hasn’t shown any signs of vibrancy over the past week, apart from, perhaps Indian recyclers, who’ve been more active. In its latest weekly report, shipbroker said that “as we enter the Autumnal season which is classed as the hardest season when leaves fall and trees look bare, the recycling market is currently taking on a similar scenario where activity from the Bangladeshi and Pakistani recyclers are once again meagre, with patchy activity, and only the Indian recyclers showing signs of any positive mood. There are several positive notes emanating from India that look set to keep sentiment from this destination upbeat, financial stability, ongoing demand for steel on the back of government support to give continued assistance to their local infrastructure/construction and of course, the potential of more tonnage eventually hotting the market for green recycling, of which almost all yards now being HKC compliant.
Game-changing refineries poised to reshape the tanker market
The Ongoing global push for decarbonisation, switch towards cleaner fuel, expanding fleet of EVs and rising fuel efficiency of vehicles are likely to decelerate the oil demand in the coming years, hampering the prospects of growth in the tanker market. Moreover, the upcoming oil refineries in key crude oil-producing countries will hurt the oil trade, squeezing tone-mile demand for oil tankers. Mexico’s Olmeca oil refinery, which is scheduled to run at full capacity (340,000 bpd) by the end of 2023 and Nigeria’s Dangote refinery, which is scheduled to commence operations in October 2023 before gradually reaching its full capacity, will be the main game changers for the tanker market in the short term.
Changes to chemical & gasoline blending component trade flows
Amid the ongoing weakness seen across the global petrochemical sector, the comparative recovery of gasoline and transport fuel demand this year has helped shift trade flows on several chemical products that have found better value in the blending pool. In this report, we look at some of the recent changes in seaborne trade related to this, and how any wider economic recovery in H2 2023 that boosts chemical consumption could once again shift trading patterns.
Perhaps the key development around these new trade flows is the recent consumption tax announced by China, which has raised tax rates for several blending components including mixed aromatics from July onwards. These are now levied at the same rate as naphtha.
Ballast water management – regulations are tightening
A Year from now, all vessels subject to the Ballast Water Management Convention must have an approved ballast water treatment system installed onboard. Is your ship ready for tighter regulations?
Good Management of ballast water is critical to prevent the spread of invasive aquatic species (see fact box below). To that end, the Ballast Water Management (BWM) Convention was adopted and eventually came into force in 2017. With it, came two primary regulations, both intended to improve ballast water management: The D-1 regulation covers ballast water exchange, that is flushing ballast water tanks in open seas, while the D-2 regulation covers ballast water treatment, that is the removal and destruction of biological organisms from the ballast water before it is discharged.
Net zero emissions targets will be a challenge
The Road ahead towards a net zero emissions future is faced with big challenges. In its latest weekly report, shipbroker said that “last week the IEA published its Net Zero 2050 report, which lays out the steps the world needs to take in order to reach net zero emissions (NZE) by 2050. It is important to stress that the report details a ‘scenario’ and is not a forecast. However, the analysis should not be ignored. Global powers and industry leaders may fail to deliver on the steps required in time, but the trajectory, even if only partially met, will have profound implications for all forms of shipping, whilst creating opportunities for those vessel sectors focused on greener sources of energy”.
Dry bulk market: evolving market conditions impact the capesize segment
This Week the cape market has been marked by varying levels of activity and changing sentiments. At the beginning of the week, the Pacific market showed promise for owners, with support from East Coast Australia coal cargo contributing to a positive outlook and two major players driving momentum, from West Australia to China, resulting in a modest uptick in rates.
Brazil’s iron ore exports on the rise in 2023
The Brazilian iron ore market has improved during 2023, with exports on the rise, much to the delight of the dry bulk market. In its latest weekly report, shipbroker said that “2023 has been so far a positive year for global iron ore trade. In Jan-Aug 2023, global loadings of iron ore increased by +4.0 percent y-o-y to 1,028.8 million tonnes, from 988.9 in the same period of 2022, based on Refinitiv vessel tracking data. It is also just above the 1,020.9 million tonnes loaded in Jan-Aug 2021, which was the last all-time record. Exports from Australia increased by +2.5 percent y-o-y in Jan-Aug 2023 to 598.9 million tonnes, easily a new all time record high.