Strong capesize, panamax rates push baltic index higher
The Baltic Exchange’s main sea freight index rose on Wednesday for the third straight session, supported by firmer rates for capesize and panamax vessels. The overall index, which factors in rates for capesize, panamax, supramax and handysize shipping vessels, gained 43 points, or 3.72 percent, at 1,200 points.
The capesize index climbed 151 points, or 9.9 percent, at 1,676 points. Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as iron ore and coal, were up $1,273 to $13,421. The panamax index rose 52 points, or 3.7 percent, at 1,456 points. Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 to 70,000 tonnes, increased $407 to $11,669. Among smaller vessels, the supramax index was down 3 points to 908 points, while the handysize index also fell 2 points to 584 points.
Shipbuilding firms threatened as orders slump to 3,158 vessels
The shipbuilding industry recorded a very low orderbook last year with 3,158 units of 196.9 million deadweight tonnage (dwt), falling below 200 million dwt for the first time in 13 years. According to the latest Clarksons Research report, low ordering activity meant that some yards have been left idle for quite some time and may be forced to close their business. As reported earlier, the number of ‘active’ yards (those with at least one vessel of 1,000+ GT on order) fell from 440 at the start of 2017 to 360 as of start 2018. A total of 902 orders of 72.8m dwt were reported globally, only the third year in the past twenty in which less than 1,000 new orders were reported. Clarksons report showed that bulk carriers were most in demand with orders for 286 vessels placed last year, followed by tanker orders which increased to 271 vessels, but fell well below the level of ordering in 2015.
Mediterranean crude oil flows to east muted for February despite cheap suezmax freight rates
The flow of Mediterranean crude to the Far East in February is currently expected to be relatively light, with a wide Brent/Dubai EFS currently cancelling out cheap Suezmax freight rates from the Black Sea. While lower Suezmax freight rates from the Black Sea could be viewed as supportive of the arbitrage of CPC Blend and Urals to the Far East, Mediterranean crude traders have said the wide Brent/Dubai Exchange of Futures for Swaps and the backwardated Brent paper structure were weighing on arbitrage economics to Asia.
The front-month EFS was seen trading at around $3.47/b Tuesday, having traded at below $2/b as recently as October 4. A wide Brent/Dubai EFS generally makes Brent-linked crudes like Urals and CPC Blend more expensive to Asian refiners than Dubai-linked crudes. The Black Sea to Mediterranean Suezmax route, basis 135,000 mt, was assessed at $5.40/mt January 23, the lowest level since July 20 last year when the route was assessed at $5.38/mt.
McQuilling services predicts weak freight market for 2018
McQuilling Services is pleased to announce the release of its 2018-2022 Tanker Market Outlook. This 200-page report provides a five-year spot and time charter equivalent (TCE) outlook for eight vessel classes across 23 benchmark tanker trades, plus four triangulated trades. Also included in the report is a robust five-year asset price outlook as well as a one and three-year time charter forecast through 2022. With 21 years of tanker rate forecasting expertise, McQuilling Services is a leader in the industry and continues to support a variety of stakeholders in the energy, maritime and financial services industries with its annual Tanker Market Outlook.
India eases rules for issuing CDC for seafarers
The government has eased rules for issuing a so-called Continuous Discharge Certificate (CDC)-cum-Seafarers’ Identity Document, removing the hurdles for those intending to work on ships but faced hurdles in obtaining the certificate. Without a CDC, a person is not eligible to work on ships. If an Indian national of 18 years, holding an Indian passport and a Class 10 pass certificate, completes the five basic STCW safety courses spread over two weeks, he is entitled to apply for a CDC.
The International Convention on Standards of Training, Certification and Watchkeeping for Seafarers (STCW), 1978, sets qualification standards for masters, officers and general-purpose ratings on seagoing merchant ships. The new rules on issuing CDC took effect on January 14.
Environmental organizations and shipping industry call for carriage ban on non-compliant fuel
Leading environmental organizations and the global shipping industry have joined in calling for an explicit prohibition on the carriage of non-compliant marine fuels when the global 0.5 percent sulphur cap takes effect in 2020. IMO has agreed that from 1st January 2020 the maximum permitted sulphur content of marine fuel (outside Emission Control Areas) will reduce from 3.5 percent to 0.5 percent.
Unless a ship is using an approved equivalent compliance method, there should be no reason for it to be carrying non-compliant fuels for combustion on board. The 2020 sulphur cap will provide substantial environmental and human health benefits as a result of the reduced sulphur content of marine fuels used from 1 Jan 2020. At the same time, the 2020 cap will significantly increase ships’ operating costs and will present major challenges to governments that must ensure consistent enforcement across the globe.