An ambitious global test bed for green ships sets sail
With 90 percent of traded goods being transported across the ocean, the shipping industry stands at the heart of the global economy.
Although shipping is highly efficient in terms of CO2 emissions per cargo weight, the industry as a whole is a major contributor to the world’s carbon footprint, accounting for 3 percent of global greenhouse gas (GHG) emissions. This is due to the sheer volume of movement and the industry’s heavy dependence on fossil fuels.
Ship owners piling on tanker newbuildings
More Tanker newbuilding orders has been the latest trend in the shipbuilding market. In its latest weekly report, shipbroker Allied Shipbroking said that “tanker contracting was a leading force on the newbuilding front over the past week which, led by Pertamina International Shipping, added 22 tankers to the orderbook. The firm has already made headlines in 2024, with the $86m acquisition of the 2020 built Suezmax BELLA CIAO reported last week, and these latest orders demonstrate the state energy firm’s desire to grow its shipping business. The vessels are thought to be around $47.8m on average, though the individual prices will very between the DPP, CPP and IMO 2/3 specification vessels.
Product tanker recycling drops 82pc year-on-year
“In 2023, only seven product tankers with combined deadweight tonnes (DWT) capacity of 265,000 were recycled. This was a year-on-year drop of 82 percent compared to 1.5 million DWT (27 product tankers) recycled in 2022. It was also the lowest level of recycling seen since records began in 1996,” says Niels Rasmussen, Chief Shipping Analyst at BIMCO.
Strong earnings and second-hand values, as well as a reduction in newbuilding deliveries, have likely contributed to the very low level of recycling.
Chemical tanker market remains robust after positive 2023
The Chemical Tanker has edged higher during 2023, as demand for sustainable and high performance building materials grew further. In its latest weekly report, shipbroker Intermodal said that “in 2023, the global seaborne chemical trade reached a volume of 372.5 million tons, not only representing a recovery with a growth rate of 1.08 percent from the previous year but also marking a modest increase of 0.47 percent above the 5-year average and a significant 8.8 percent improvement compared to the 10-year average. These figures indicate a positive trend in the industry”.
More specifically, the resilience in 2023, particularly within the asphalt & bitumen trade, can be attributed to several factors. The market is driven by a growing demand for sustainable and high-performance building materials, with polymer-modified bitumen contributing to more durable road surfaces.
Sea freight can increase by 5 to 10 pc
In the tumultuous sea of global shipping, operators are still facing economic instability and severe uncertainty for 2024. According to an analysis made by logistics company MTM Logix, as the unsatisfactory results for the end of 2023 come to light, the first quarter of this year is expected to see a significant increase of investor demands for arrangement of vessel capacity, and this could push freight rates upwards. This increase is expected to vary between 5 percent and 10 percent over the year.
“In the first three months of this year, the challenge will be the availability of containers, which should be the main pressure point for growing rates. An increase in demand of around 9.3 percent is estimated against a transport capacity of 2.2 percent,” says Mario Veraldo, CEO of MTM Logix.
Offshore supply vessel owners reap the rewards of data sharing
Inmarsat’s recent Connected Future seminar encapsulated the critical roles technology and data sharing play in enabling more efficient and sustainable workboat operations, and in improving conditions for crew.
Insights from leading Offshore Supply Vessel owners and operators capture the extent to which technology and data sharing are driving greater efficiency, sustainability and profitability in operations while enhancing working conditions for onboard personnel.
Ship recycling activity still experiencing downturn
The Ship Recycling has remained sluggish throughout the past week. In its latest weekly report, Best Oasis, a leading cash buyer of ships, said that “exploring the ship recycling destinations for this week. India’s market continued to show sluggishness, similar to the previous week, with a lack of demand for scrap and vessels. The future of this market remains uncertain, and only time will reveal how it will fare.
FBX index Jan 2024: expect disruptions to continue
What a difference a month can bring about. Up until mid-December the baseline outlook for container shipping 2024 was for a continued cyclical downturn likely with freight rates bottoming out in late Q1 or early Q2 2024. After this, it was anticipated that carriers would begin to idle more capacity to stabilize and strengthen rates from what had already become loss-making levels.
The de-facto closure of the Suez routing has changed this baseline outlook fundamentally.
When looking at the developments over the next weeks and months, it is important to distinguish between short-term and medium-term impact.
Tankers: is another source of disruption under way?
While all the headline attention regarding the tanker and energy market is focused on the Red Sea, another source of disruption could be emerging in Libya. In its latest weekly report, shipbroker Gibson said that the Libyan oil sector is no stranger to output disruptions but this week has seen the North African producer back in the spotlight, with Libya’s NOC declaring force majeure at the 300kbd Sharara oil field due to a resurgence in local protests over fuel prices and a reported lack of economic opportunities. This comes after a series of production shutdowns in the wake of the Libyan Civil War, with the country’s oil infrastructure often being a target between the various factions.