2023 ends with two major shipping passages experiencing disruptions
Shipping’s two major shipping passages, forged through decades of works and lives lost under construction, the Panama Canal and the Suez Canal, facing serious disruption, thus, impacting freight rates and the flow of goods. In its latest weekly report, shipbroker said that “as 2023 draws to a close, the global shipping industry confronts significant challenges due to environmental and geopolitical issues impacting the Panama and Suez Canals. These pivotal maritime passages are experiencing disruptions that compel the industry to adapt, affecting global trade routes and logistics rapidly”.
According to Research Analyst with Intermodal, in 2021, the Panama Canal facilitated the transit of approximately 291.7 million LT of cargo, increasing to around 294 million LT in 2022.
Asia Fuel Oil-HSFO firms; market eyes China demand, red sea tensions
Asia’s High Sulphur Fuel Oil (HSFO) market extended gains for a second consecutive session on Wednesday, while the market eyed import demand from China and shipping tensions in the Red Sea.
Singapore’s 380-cst HSFO cash premium climbed to $10 a metric ton, with the product trading higher for loading dates in the second half of January.
There was no significant disruption spotted for Russian supplies to Asia as yet, said industry sources, though the market continued to keep tabs on developments in the region.
The Strength likely came from expectations of firmer Chinese uptake, following the release of more import quotas late last year, industry sources said.
Europe wins big on green fuels for planes and ships
In 2023, Europe agreed that its planes and ships would run on green fuels in the future. It’s a huge step forward for these polluting sectors, but it risks being undermined by lobby groups wanting to use clean fuels to power cars and trucks and by airlines buying unsustainable biofuels.
Unless we build revolutionary ships and planes with no emissions by 2030, it’s safe to say that the aircraft and ships we know today will continue to be in operation for years to come. But as the planet continues to burn, can we afford for them to run exclusively on fossil fuels?
If the aviation and shipping sectors are to have any chance of survival in a warming world, Europe is in dire need of policies that require a switch from jet oil to cleaner alternatives, such as sustainable aviation fuels (SAFs) and green shipping fuels.
The maritime sector in the European Union emissions trading system
An Emissions Trading System (ETS) is a market-based measure that sets a limit (cap) on allowed emissions (allowances) and creates financial incentives to reduce a sector’s emissions. Each allowance equals 1 tonne of carbon dioxide (CO2) or carbon dioxide equivalent (CO2e) emissions, and these can be allocated directly by the government or purchased by companies through auctions. The cap can be reduced each year to help achieve the ultimate goal of zero emissions in the sector. Allowances can also be traded between companies as part of efforts to reach their own emission reduction goals.
In the European Union, the Emissions Trading System Directive (EU ETS Directive) has gone through four phases of development, and each has implemented stricter emission reduction targets and broadened the scope to encompass additional industries.
Ship sales fall in 2023
Activity in the S&P market was below 2022 levels, during the past year. In its latest weekly report, shipbroker said that “a total of 1,256 sales had taken place in the dry and tanker markets as of December 20th, representing a nearly 10percent decline compared to the same period in 2022. More specifically, in the dry market, a total of 632 vessels changed hands within 2023, compared to 711 bulk carriers in 2022. The Handysize and Supramax sectors drove the dry S&P activity in 2023, with 149 and 142 sales respectively, followed by the Capesize sector with 98 sales. Although the number of transactions decreased for most sectors in 2023 compared to 2022, buying appetite for Capesize, Ultramax, and Newcastlemax vessels increased significantly.
The Shipbroker said that “during 2023, Capesize and Newcastlemax sales stood at 98 and 19 respectively, with both nearly doubling their sales volume compared to the previous year.
Ship recycling market experiences significant volatility in 2023
The Ship recycling market has been quite volatile throughout the year. In its latest weekly report, Best Oasia (www.best-oasis.com), a leading cash buyer of ships said that the ship recycling market experienced significant volatility throughout the year, with various locations witnessing fluctuating trends. There were notable peaks in activity, followed by a series of declines in different regions. In addition, it is worth noting that Bangladesh and Pakistan have ratified the HKC convention. Furthermore, the EU has modified the definition of waste and is considering reevaluating Indian yards. The UAE has also introduced new ship recycling regulations. In summary, significant developments have taken place, and there are further anticipated advancements in 2024, building upon the current momentum of activities.
Marine insurance in an increasingly volatile world
As 2023 is ending we look back at a year with more war, increasing geopolitical tension and more persistent inflation than expected. How is marine insurance impacted – and what can we expect looking ahead?
2022 was the year of increasing geopolitical tensions, war within Europe, and growing signs of a more divided world. Sadly, 2023 has brought additional tragedies. The war in Ukraine persists, and on 7 October, the world turned its eyes to yet another brutal conflict: Hamas launched a massive attack on Israel followed by large-scale retaliation in Gaza. Dark scenarios include a possible regional escalation in the Middle East as well as increased tensions in the South China Sea.