BALTIC INDEX DECLINES FOR FIFTH STRAIGHT SESSION
The Baltic Exchange’s main sea freight index, tracking rates for ships carrying dry bulk commodities, slipped for the fifth straight session on Wednesday, hurt by lower rates for larger vessels and supramax. The overall index, which factors in rates for capesize, panamax, supramax and handysize shipping vessels, was down 24 points, or 2.76 percent, at 847 points. The capesize index lost 96 points, or 9.63 percent, at 901 points.
BLACK SEA BUNKER FUEL MARKET SEE HIGHER DEMAND FROM DRY BULK
The bunker fuel market in the Black Sea is waiting for higher demand from the dry bulk sector as harvest season in the region picks up, although the extent to which demand will increase is in question.
Harvest season traditionally ramps up through July and is at its peak in August-September. Russia exported 2.03 million mt of grains in July 2016, 3.31 mt in August and 4.62 mt in September. Black Sea wheat is currently the most competitive origin globally, as a result of the sharp uptick in US and Australian wheat prices.
HONG KONG SET TO HIT EMISSIONS TARGET
The tweak in regulations is set to align with Pearl River Delta emissions control which will take effect on the national level in January 2019.
On Monday, authorities told the Advisory Council on the Environment the move would help cut harmful sulphur dioxide emissions from the marine sector by about 6,340 tones and respirable particulates – called PM10 – by about 710 tones by 2020. Breathe easier, Hong Kong is on course to hit global air pollution target.
SCRAPPING OF OLD SHIPS IN LIMBO
The market for the scrapping of old ships has remained in limbo over the course of the past couple of weeks, as a lingering lack of clarity pertaining to the true outcome of the Bangladeshi and Pakistani budgets that were announce at the end of May and early June respectively has continued to cloud the ship-recycling markets of the Indian sub-continent.
In its latest weekly report, the world’s leading cash buyer GMS noted that “in fact, the Bangladesh Shipbreakers Association (BSBA) has voiced their concerns to the highest authorities in government in an attempt reverse the recently imposed 15 percent VAT on incoming ships.
ASIA CRUDE TANKER MARKET TO REMAIN SLOW IN Q3 2017
Weak supply side fundamentals as well as a seasonal lull in demand are expected to plague the Asian crude tanker market in Q3 2017. The pace of newbuild deliveries continues to be relentless while scrapping remains minimal. A more worrying trend is that according to BIMCO, VLCC orders between January and May this year hit their highest level in 9 years on the back of low newbuilding prices, which could delay a potential recovery in rates. The effect of tonnage oversupply has been clearly felt in the VLCC market. Rates for the benchmark AG/ Japan route have tumbled from w97.5 at the beginning of the year to current levels of w51.
NEWBUILDING ORDERING ACTIVITY KEEPS UP PACE AGAIN
Newbuilding ordering activity has kept up pace over the course of these past few weeks, just as ship owners have taken a step back from the S&P market, especially the one for dry bulk carriers. In its latest weekly report, shipbroker Allied Shipbroking noted that “with a lot of interest seemingly centered around the ability to secure any discounted slots for older vessel designs. With the main driver being the pricing aspect, it is difficult to see how this positive trend in buying interest could continue for much longer.
NIGERIA’S HIGHER OIL PRODUCTION A GOOD NEWS FOR TANKER MARKET
The normalization of the situation in Nigeria has led to an improvement of the African country’s oil industry prospects, which in turn could spell good news for the tanker market. In its latest weekly report, it is said that Nigeria has long been an important source of both crude and product tanker demand. However, in recent times, the West African state has been inconsistent in both its export and import activity, impacting upon the tanker market. The nation, like most other major producers, has suffered immensely from lower oil prices, which continue to strain government finances. However, finally there is some hope on the horizon.