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Medium range tanker freight rates return to 2018 low

Clean freight rates for Medium Range tankers have returned to 2018 lows seen earlier in the summer after a brief surge in activity in the second half of July.

A weaker US Gulf market has again attracted ballasting ships to European waters, while West African demand, which led to increased fixing activity in mid-July, has waned. Tonnage on European waters is again building up faster than shipping demand, according to shipping sources.

The UK Continent-US Atlantic coast route for 37,000 mt cargoes was assessed at Worldscale 100 Tuesday, back to where it was on July 18, after rising to w112.5 at its peak in late July. The Alpine Mary was heard on subjects to carry 37,000 mt of gasoline from Mongstad on Norway’s west coast across the Atlantic at w105, laycan August 7. Mongstad loadings usually come at a w5 premium over UK Continent equivalents.

Coal exports from Australia’s Port Kembla Terminal fall last month

Coal exports from the Port Kembla Coal Terminal in Australia’s New South Wales state fell to 386,280 mt in July, from continuous impact of lower volumes coming from South32’s Illawarra Metallurgical Coal’s operations.

The figure is down 22% year on year from 494,942 mt and 59% weaker than the approximate 951,151 mt seen in June, data from the port operator showed.

The monthly total extrapolated implies an annualized rate of 4.55 million mt, which is fairly well in tune with the 2017-2018 fiscal year (July-June) total of 4.72 million mt, but far below the 8.04 million mt shipped the year prior which was before the current ongoing issues at IWC’s Appin mine.

Port of Savannah volume sets peak

The Georgia Ports Authority (GPA) posted an 8.4 percent year-on-year increase in container throughput in fiscal 2018 to achieve a record-breaking 4.2 million TEU.

This was also the busiest June ever, the Port of Savannah handled 370,725 TEU, up 9.8 percent year on year. At its recent meeting, the GPA board approved construction of an US$8.8 million overpass, part of the $127 million Mason Mega Rail project that, upon completion, will allow 10,000-foot unit trains to be built on terminal. This, along with other improvements, will increase Savannah’s annual rail lift capacity to one million containers by 2020, thereby cutting transit time to markets such as Memphis, St Louis, Chicago and Cincinnati by 24 hours.

Scrubber adoption rate varied by vessel type

A variety of strategies have emerged among shipowners as they contend with the prospect of marine sulphur emissions limits under IMO rules set for implementation in 2020.

Owners of tanker fleets, containership fleets and dry bulk vessels have all ordered scrubber installations as one mechanism for coping with the change, but are installing the scrubbers at widely varied paces on diverse timelines, although none of the fleets have hit a high proportion of scrubber installation despite the looming implementation deadline.

In early April, Koch chartered two newbuild VLCCs from Kyklades Maritime for two years. The newbuild VLCCs will be delivered from the shipyard in 2019. They were chartered at $31,500/day for the first two years with an option to extend the charter for another year at $34,500/day.

 

Japanese shipbuilders look for smoother sailing in other sectors

Japanese heavy machinery makers are seeing their fortunes sink in the shipbuilding sector amid tough competition from South Korean and Chinese competitors.

Decades ago, large tankers and cargo ships symbolized Japan’s remarkable economic strength. Now, the country’s struggling shipbuilders are looking for more profitable sectors. Mitsubishi Heavy Industries plans to halve shipbuilding operations at Koyagi Shipyard, one of its main dockyards in Nagasaki in southern Japan.

Saudi VLCCS gather off Oman after Bab El-Mandeb ban

Saudi-owned VLCCs have started to gather off the southern coast of Oman after state-owned Saudi Aramco temporarily halted oil shipments through the Bab el-Mandeb strait at the bottom of the Red Sea, impeding its access to Europe.

Three part-laden VLCCs owned by Saudi state shipping company Bahri — the Marjan, the Khuzama and the TI Hawtah — have interrupted their voyages over the past 24 hours to wait at the port of Salalah in south-west Oman, according to S&P Global Platts trade flow software cFlow.

State-owned Saudi Aramco temporarily suspended its oil shipments through the Bab el-Mandeb strait on July 25 after it said two of its VLCCs were attacked by Houthi militants.

Malaysia’s Westports profits plunge 18pc

Malaysia’s Westports Holdings Bhd’s second quarter net profit fell 18.1 percent year on year to MYR121.81 million (US$2.99 million), drawn on revenues of MYR394.04 million, which declined 21 percent. Nevertheless, the group an interim dividend totaling to MYR184.1 million for the financial year ending December 31, 2018.

The weaker quarterly performance dragged the group’s first half net profit down 15.2 percent to MYR245.61 million while revenue fell 24 percent to MYR779.13 million. Westports said it also handled 4.3 percent fewer containers in the first half to 4.5 million TEU. Yet local cargo rose 20 percent year on year in the first half reflecting favourable domestic economic activities growth, according to Malaysia’s The Edge Markets.

Saudi Arabia halting oil shipments through the red sea

Saudi Arabia announced last week it was suspending oil shipments through the Red Sea’s Bab al-Mandeb strait after Yemen’s Iran-aligned Houthis attacked two ships in the waterway.

To date, no other exporters have followed suit. A full blockage of the strategic waterway would virtually halt shipment to Europe and the United States of about 4.8 million barrels per day of crude oil and refined petroleum products. Western allies backing a Saudi-led coalition fighting the Houthis in Yemen expressed concern about the attacks, but have not indicated they would take action to secure the strait. That would risk deeper involvement in a war seen as a proxy battle for regional supremacy between Saudi Arabia and Iran.

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