BALTIC EXCHANGE SNAPS 16-SESSION LOSING STREAK
The Baltic Exchange’s main sea freight index, tracking rates for ships carrying dry bulk commodities, rose on Wednesday, snapping a 16-session decline on better rates for capesize vessels.
The overall index, which factors in rates for capesize, panamax, supramax and handysize shipping vessels, was up 3 points, or 0.37 percent, at 821 points. The capesize index gained 13 points, or 0.95 percent, to 1,379 points. Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as iron ore and coal, were up $218 at $10,178. The panamax index was flat at 783 points.
OIL SHIPPING BEARS BRUNT OF QATAR DIPLOMATIC CRISIS
In the aftermath of the Saudi Arabia, UAE and Bahrain’s decision to cut diplomatic ties with Qatar, their respective port authorities have issued restrictions on movement of ships to and from the country, which will have implications on crude and oil product loadings in the Middle East and could push up bunker prices elsewhere.
One of the world’s largest oil importers changed its VLCC loading plans overnight to steer clear of issues arising from the diplomatic impasse between Saudi Arabia, the UAE, Bahrain and Egypt on one side and Qatar on the other.
RESTRICTIONS EASE ON OIL TANKERS GOING TO AND FROM QATAR
Abu Dhabi Petroleum Ports Authority issued a new circular on Wednesday removing previous restrictions on non-Qatar owned, flagged or operated vessels sailing to and from Qatar. This effectively allows direct trade between the two ports and co-loading of crude cargoes.
A Middle East-based industry source said there had been no official notification on halting the co-loading of crude cargoes. The ban on vessels carrying the Qatari flag and vessels owned or operated by Qatar is still in place. But given there are few Qatari-flagged or owned vessels, this is unlikely to have as big an impact on the market as the previous circular. Source reported on Wednesday two very large crude carriers (VLCCs), which can each carry up to 2 million barrels of oil, loaded Abu Dhabi grades on Wednesday, despite having taken Qatari crude in an earlier leg of the voyage.
PORT OF LOS ANGELES CREATES US$1.17BN BUDGET
The Port of Los Angeles has set aside a budget of US$1.17 billion for fiscal 2017/18, which commences on July 1. The FY 2017/18 adopted budget’s operating receipts, which are the principal mechanism for funding day-to-day port operations, are forecast to total $475.4 million.
Shipping service revenues are expected to comprise 83.4 percent of operating receipts. However, with a budget of $97.7 million, the FY 2017/18 Capital Improvement Program (CIP) is smaller than in previous years. This is due to less spending on major terminal and transportation-related projects as most have already been completed, such as improvements at the TraPac and Yusen (YTI) terminals, the port explained.
INDIA’S SHIPPING INDUSTRY COST OPTIMIZATION
Port infrastructure development has witnessed a sharp improvement in cost optimization over the last three years. While in the financial year 2013-14, the 12 major ports added 55.61 million tonnes in additional capacity and saw an expenditure of Rs2,458 crore on upgradation of ports, the numbers have significantly improved since then.
According to data, the year ended March 2017 saw capacity addition of 86.59 million tonnes (11 months), which is 1.5 times of that added in FY14, the ports spent only Rs 1,196 crore during the last financial year, which is less than half of what it spent in FY14.
US PARIS EXIT MAY SPUR SHIPPING EMISSIONS COOPERATION
US President Donald Trump’s decision to remove the US from the Paris climate accord, which aims to prevent temperatures from rising 2°C above pre-industrial levels by curbing carbon emissions, is going to have a ‘coordinating’ effect on other countries to limit carbon emissions through the International Maritime Organization (IMO).
The shipping sector, which the IMO estimated accounted for 2.2 percent of global carbon emissions in 2012, was not included in the Paris agreement.
MOL TO LEVY US$300 PER TEU ASIA-SOUTHERN AFRICA RATE HIKE
Japanese shipping giant MOL has announced it will levy a general rate increase (GRI) on all cargo moving from Asia to southern Africa. Starting July 1 2017, the GRI will be US$300 per TEU and $600 per FEU on cargo from Asia including Indian subcontinent and Middle East to southern Africa, including South Africa, Lesotho and Zimbabwe. No reasons were given for the GRI in the company announcement.