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Korean shipbuilders sweep orders for large LNG tankers

Korean shipbuilders have swept all of the orders for 30 large liquefied natural gas (LNG) tankers from around the world this year. Shipbuilding industry watchers quoted as saying that Korean shipbuilders outweighed those of China, Japan, and other competitors in terms of accumulated experience, technology and price competitiveness.

According to data released by Clarkson, a UK shipbuilding industry analysis organization, on August 6, Daewoo Shipbuilding and Marine Engineering (DSME) received orders for 12 LNG tankers, the Hyundai Heavy Industries Group orders for 14 and Samsung Heavy Industries orders for four this year. The three major Korean shipbuilders swept all of the orders for 30 units.

LNG tankers are the most expensive single vessel type currently in the shipbuilding sector. An LNG tanker is priced at about US$185 million. In particular, their unit price is on a steady rise so it is up about US$5 million from the beginning of this year.

This year LNG tanker orders were concentrated mostly in the first quarter. According to Clarkson, global LNG tanker orders amounted to 19 units (1.6 million CGTs) by March this year. The 19 units are the largest quarterly figure since the fourth quarter of 2014.

Now that LNG tanker orders concentrated in the first quarter, they have somewhat slowed down since then. However, the shipbuilding industry is expecting that LNG tanker orders will increase steadily.

Brazil taking load of gasoline cargoes amid ethanol competition

Several clean products tankers were seen on subjects in Brazil to load gasoline cargoes in August, as increased domestic competition with ethanol led to a surplus of gasoline stocks, sources quoted as saying last week. Hydrous ethanol’s price reached 58.4 percent of the cost of gasoline in Southeast Brazil in the week ending August 4, the lowest relationship recorded in nearly eight years. Hydrous ethanol offers an economic price advantage for flex-fuel cars when its price is below 70 percent of the price of gasoline.

Gasoline sales in Brazil dropped off in the summer months, slipping 16.4 percent in June to 19.8 million barrels, down from 23.7 million barrels in June 2017, according to the National Petroleum Agency, or ANP. Imports of gasoline also decreased year-on year, with 1.33 billion barrels of gasoline in June, down 3.1 million barrels from June 2017’s imports, according to ANP.

This decline in gasoline sales comes after a record-breaking harvest of sugarcane, which has lowered the price of ethanol. Ethanol sales increased 42.4 percent year on year, to 9.4 million barrels in June from 6.6 million barrels in June 2017. Additionally, Brazilian imports of ethanol increased in July to 142.45 million liters from June’s 68.77 million liters, according to US Census Bureau data.

Commonwealth bank of Australia lifts 2018-19 iron ore forecast

The Commonwealth Bank of Australia has raised its fiscal 2018-19 iron ore price forecast for 62 percent Fe iron ore fines, on views that demand for mid-grade iron ore will increase as high-grade premium proves too costly, it said Tuesday in a report.

CBA analysts are now expecting the 62 percent Fe iron ore fines price to average at $61/mt CFR China in the 12 months to June 30, 2019, which is up 9 percent from its previous expectation of $56/mt, it said in its Commodities: Strategy report. Despite the near-term upgrade to prices, CBA still sees a decrease in value in the longer term.CBA forecasts that the 62 percent Fe iron ore fines price will average at $53/mt in fiscal 2019-2020 and $46/mt in the longer term. That compares to $69/mt in the past fiscal year.


Peak season promises better box freight rates but limited charter market upside

After a pattern of divergence at the start of the year, July saw a modest realignment between charter and freight markets as liner operators react to cost pressures and the wider industry awaits the impact of the potential trade war between the US and China, according to the latest Container Shipping Forecaster from MSI.

Following an impressive run since the end of 2017, time charter earnings have leveled off in recent weeks, a slowdown that began with smaller feeder vessels and has now spread to larger units. While the charter market slowdown is partly seasonal, the lower level of activity comes against a backdrop of service withdrawals which will impact larger units, according to Daniel Richards, Analyst at MSI.

Queue at Australian PWCS coal terminals rises on week to nine vessels

Port Waratah Coal Services’ two terminals at Newcastle port in eastern Australia had nine ships waiting offshore Sunday, compared with three a week ago, the Hunter Valley Coal Chain Coordinator said in its weekly report. The queue was expected to comprise six ships at the end of the month, HVCCC said. A total of 1.76 million mt of coal was shipped out of the PWCS terminals in the week ended Sunday, down 662,700 mt from a week earlier. Month-to-date exports totaled 1.23 million mt, according to the report. Coal producers had forecast August arrivals at the terminals at 9.7 million mt, and for September at 10.7 million mt, said the report.

Meanwhile, coal throughput on Newcastle port’s railway last week was 2 million mt, HVCCC said. Around 241,300 mt of coal was shipped through the NCIG terminal at Newcastle last week, S&P Global Platts data showed. The Carrington and Kooragang terminals at Port Waratah had combined stocks of 1.05 million mt available for export on Sunday, down about 500,500 mt from the previous week. Gladstone port had three ships in queue Monday, and an additional ship was loading at the Queensland port’s RG Tanna coal terminal, Gladstone Ports Corporation said.

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