LNG shipping: high supply suppresses rates
LNG shipping is undergoing major shifts since the start of 2024. In its latest weekly report, shipbroker said that during Q1 of 2024, the LNG shipping market experienced major disruptions and shifts that significantly altered global trade routes and market fundamentals. The year commenced with logistical challenges, particularly highlighted by persistently low water levels in the Panama Canal, which constrained LNG transits. Compounding these challenges, LNG carrier movements through the Suez Canal have been completely halted since mid-January, necessitating a strategic redirection of shipments along alternative routes.
Iron ore shipments up 3.8pc
In the first quarter of 2024, global iron ore shipments rose 3.8 percent y/y on expectation of strong Chinese steel production which, however, failed to materialise. Iron ore supply has grown faster than Chinese demand which could lead to weaker shipments ahead, says Filipe Gouveia, Shipping Analyst at BIMCO.
During the start of the year, Brazilian iron ore shipments typically slow down due to mining disruptions caused by heavy rainfall. However, this year conditions were better and Vale, a leading miner, increased output by 6 percent y/y, boosting shipments from Brazil.
New requirements for vessels with engine or shaft power limiters
New requirements will come into force from 29 April at the ports of Melbourne and Geelong for vessels equipped with a mechanical or software-based engine or shaft power limiter in accordance with IMO requirements.
As stated in the Ports Victoria Operational Instruction (OI) No.01-2024, the IMO has adopted measures under the MARPOL Convention requiring certain international ship types to take action to reduce their carbon intensity.
Crude tanker market fundamentals looking healthy
The crude tanker market could be set for a positive future, as ton-mile demand is about to increase. In its latest weekly report, shipbroker said that earlier this month the IEA released its monthly oil report, offering for the first time their analysis of how oil markets could shape up in 2025. The agency expects global oil demand to grow by 1.1 mbd next year, just marginally below 1.2 mbd expected in 2024. Despite the accelerating uptake of clean energy technologies, projected growth in demand in 2025 is reasonably robust, in line with average growth rates seen since 2011.
Is the decline in global piracy over?
Global piracy and armed robbery incidents increased by 4 percent in 2023 compared to 2022, according to the International Maritime Bureau’s Piracy Reporting Centre (IMB PRC). While this does not appear to be a substantial overall change, a closer look at the figures do reveal some alarming trends.
First and foremost, the resurgence of Somali pirate activity raises concern. The IMB PRC, in December 2023, reported the first successful hijacking of a vessel off the coast of Somalia since 2017. During the first three months of 2024, five more incidents, including two hijackings, were recorded in the Western Indian Ocean, all occurring at significant distances from the Somali coastline.
Canadian coal exports on the rise in 2024
Canada has emerged as one of the exporters with the biggest increase in seaborne coal exports during 2023, with the upwards trend maintaining momentum in 2024 as well. In its latest weekly report, shipbroker said that global coal trade has really picked up pace in recent months, and is now fully back to pre-Covid levels. In Jan-Dec 2023, global seaborne coal loadings increased by +5.8 percent yo-y to 1,339.5 mln t (excluding cabotage), based on vessel tracking data from AXS Marine. In Jan-Feb 2024 the positive trend continued, with global coal loadings increasing by +9.3 percent y-o-y to 213.9 mln t, from 195.6 mln t in the same period last year. In Jan-Feb 2024, exports from Indonesia increased by +17.4 percent y-o-y to 83.7 mln t, whilst from Australia were up +16.6 percent y-o-y to 56.4 mln t.
Reflecting on one year of CII regulations
As we mark one year since the enforcement of the Carbon Intensity Indicator (CII) regulation, the maritime industry is reflecting on the impacts and challenges of this important step towards decarbonization. The CII is a measure of a ship’s energy efficiency and has been a focal point for assessing and improving environmental performance within maritime operations over the past year.
At this year’s CMA Shipping event, I had the honor of moderating a discussion with several industry experts to explore nuances of the CII implementation, reflect on the past year, and discuss the path forward in our collective sustainability journey.
Middle East tensions to impact the tanker market
The Tanker market is bound to be further impacted by the escalation of the Middle East tensions. In its latest weekly report, shipbroker said that news of an Israeli strike on Iranian territory, potentially escalating tensions in the Middle East, sent shockwaves through global markets. Geopolitical uncertainties loom large, capable of swiftly altering the trajectories of commodities such as oil, and reigniting concerns over inflation. Although oil prices took a rollercoaster ride on Friday, with WTI climbing to USD 86/barrel, reports suggested the attack was less extensive than initially believed, with Iran’s key nuclear facilities seemingly untouched.
Dry bulk market: capesize C3 route South Atlantic overview supply
According to the Capesize C3 South Atlantic overview provided in the image below, during the third week of April, there was a notable 4 percent decrease in ballast vessels bound for the South Atlantic, coupled with a significant surge of 72 vessels waiting to load. Analysis of forthcoming arrivals in the South Atlantic over the next 40 days reveals a discernible uptick in vessel supply, both laden and unladen, within the 10 to 20-day timeframe. However, beyond the 30-day mark, there appears to be a pronounced increase in the availability of ballast vessels.