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GLOBAL’S DIRTIEST FUEL SEEN HOLDING OUT EVEN AS SHIPS CLEAN UP

Even as the owners of ships carrying everything from bananas to oil spend billions of dollars to meet tighter clean-air rules, demand to buy the dirtiest fuel will still hold out in some parts of the world.

In two and a half years, the International Maritime Organization will slash by 86 percent the amount of sulfur allowed in the fuel burned by the world’s cargo ships and oil tankers as they sail around the globe. Meeting the new standards will cost the world shipping industry $60 billion a year.

The IMO’s new standards that require ships to use fuel with 0.5 percent sulfur or less — versus the current 3.5 percent — as of Jan. 1, 2020 should reduce heavy fuel demand by 2.3 million barrels a day. Changing fuels completely across the world will be difficult, as refiners will need to build units such as cokers. More than two-thirds of residual fuel use is in developing countries.

CARGO TRAFFIC AT 12 MAJOR PORTS UP 6PC IN APRIL

Boosted by a surge in demand, India’s 12 major ports saw cargo traffic increase by 6.27 percent to 55.75 million tones (MT) in April, the first month of the current fiscal. These top ports under the centre had handled 52.46 MT cargo in April 2016.

Increased demand from sectors such as iron ore, coking coal and container traffic resulted in higher movement of cargo last month to 55.75 MT, as per the Indian Ports Association. Iron ore traffic volumes were up 40 percent to 5.37 MT during the month as against 3.82 MT in April 2016 while coking coal volumes surged by 15 percent to 4.61 MT.

Container traffic was up 9.78 percent to 7 lakh TEUs (twenty food equivalent units) while POL (petroleum, oil and lubricants) volumes too surged by 7 percent. Kandla port handled the highest traffic volume at 9.32 MT during April this year followed by Paradip Port at 7.33 MT, JNPT Port at 5.75 MT, Mumbai at 5.33 MT and Visakhapatnam at 4.92 MT, the data revealed. Kolkata Port including Haldia handled 4.23 MT of cargo while Chennai port handled 3.93 MT of cargo.

BALTIC EXCHANGE INDEX EDGES DOWN ON WEAKER SMALLER VESSEL DEMAND

The Baltic Exchange’s main sea freight index, tracking rates for ships carrying dry bulk commodities, was marginally down on Wednesday as demand for smaller vessels eased.

The overall index, which factors in rates for capesize, panamax, supramax and handysize shipping vessels, was down two points, or 0.2 percent, at 1,005 points. The supramax index was down four points to 790 points, while the handysize index fell two points to 510 points.

The capesize index rose 10 points, or 0.61 percent, to 1,645 points. Average daily earnings for capesizes, which typically transport 150,000-tone cargoes such as iron ore and coal, fell $42 to $12,404. The panamax index halted a 14 session losing streak and rose four points, or 0.4 percent, to 1,011 points.

MOODY’S OUTLOOK FOR SHIPPING INDUSTRY IS STABLE; EBITDA TO STAY

Moody’s Japan K.K. says that the outlook for the global shipping industry is stable, given that — after excluding M&As and spinoffs — the aggregate EBITDA of rated shipping companies will remain at similar levels in 2017 as last year.

Unlike 2016, when the industry saw double-digit EBITDA declines, the operating environment has bottomed and earnings will remain stable, although at a low level during 2017.

However, a material level of industry wide earnings growth will be beyond our 12-month horizon. Moody’s conclusions are contained in its recently released report on the global shipping sector.

Moody’s further notes that the continued scrapping of Panamax-class vessels driven by the expansion of the Panama Canal and of older ships driven by tightening environmental regulations are likely to continue, partly offsetting global capacity expansion, a credit positive.

 

LB PORT BOX VOLUMES IN APRIL SURGE 16.5PC

Southern California’s Port of Long Beach handled 558,014 TEU in containerized cargo in April, a 16.5 percent increase from the same month a year ago.

The port benefitted from the return of a Hyundai Merchant Marine (HMM) service and the launch of new South Korean container carrier SM Lines’ transpacific offering. Loaded inbound container volumes jumped 16.5 percent year over year to 288,207 TEU for the month, while loaded outbound containers were up 3.1 percent to 116,260 TEU and empties were up 29.3 percent to 153,547 TEU compared with April 2016. Through the first four months of 2017, the Port of Long Beach has handled 2.14 million TEU, a 5.1 percent increase from the same 2016 period.

SHANGHAI PORT BOX THROUGHPUT INCREASES NEARLY 5PC

China’s Shanghai port handled a total of 3.28 million TEU in April, a 4.9 percent increase from the throughput of 3.12 million TEU in the same month last year.

However, last month’s volume dropped by 4.6 percent compared to 3.43 million TEU in March. From January to April 2017, the world’s busiest container port Shanghai recorded a total throughput of 12.67 million TEU, an increase of 8.7 percent from 11.66 million TEU in the same period of last year.

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