Germany’s commercial shipping fleet shrinks by a third
Germany, one of the world’s main maritime players, saw its commercial fleet shrink by a third over the past six years, becoming the biggest loser in a vicious industry slump that has reshaped global shipping.
Once the world’s predominant shipping lenders, most German banks have abandoned ship finance as they’ve written off tens of billions of nonperforming loans to cope with around $100 billion in toxic debt and sold scores of vessels to foreign owners at knockoff prices. The contraction in German shipping stems from an unprecedented downturn over the past decade in which a glut of ships in the water, exacerbated by easy lending practices, pushed freight rates well below break-even levels. Germany’s crumbled ship-finance structure is the most visible result of overleveraging in the business in the period leading up to the global financial crisis in 2008. VDR data show that German owners operate 2,400 vessels compared with 3,800 in 2012.
Asia coal demand drives Panamax rates up 7.5pc
Panamax dry vessel rates have risen 7.5 percent over the past week, as tight domestic Chinese coal supply spurs import demand and Indian buyers also look to replenish stocks, participants said on Wednesday.
The Baltic Panamax Index (BPI), which reflects the 60,000-80,000 deadweight tonne segment, was assessed last at 1,639 points, only marginally below August’s eight-month high of 1,643 points. As a result, the Baltic Dry Index, which tracks all dry bulk markets, was 7percent higher on the week, at 1,450 points. Domestic shipments in China had been hampered by stringent inspections at the nation’s largest coal port of Qinhuangdao, said a dry bulk analyst with a large shipbroking firm.
Is your charter party ready for 2020?
As the deadline for the IMO’s global low-sulphur fuel requirements fast approaches, it is necessary to carefully check the bunker clauses in the charter parties. The time to start thinking about what is in the charter party is not 1 January 2020. There will be an important transitional period in the run up to this date, during which owners and charterers need to prepare and plan for the switch to compliant fuels.
Many older forms of standard time charter parties do not contain the detailed and comprehensive provisions required to deal with modern bunkering issues. The industry needs to start thinking now about the implications of low-sulphur fuel requirements on long-term contracts of affreightment (COAs) and time charters that may begin before 2020, to avoid contractual disputes.
Iranian oil tankers go dark with 1 1/2 months to go to sanctions
Iran’s oil tankers are starting to disappear from global satellite tracking systems with just under six weeks to go until US sanctions are due to hit the country’s exports, making it harder to keep track of the nation’s sales. No signals have been received by shore stations or satellites from 10 of the Persian Gulf nation’s crude oil supertankers for at least a week, according to tanker tracking data compiled by Bloomberg.
The most likely explanation is that the vessels’ transponders have been switched off, making it more difficult to track the movements. When they were last seen, the 10 vessels, which are listed below, were holding around 13 million barrels of crude and condensate, a light form of crude extracted from gas fields. If they’re now full, that would rise to about 20 million barrels.
No delays to implementing shipping fuel sulphur cap in 2020
The International Maritime Organization (IMO) will not delay implementing a reduction in the amount of sulphur in marine fuel in 2020, officials with the UN’s shipping agency quoted as saying on Tuesday.
From 2020, IMO rules will ban ships from using fuels with a sulphur content above 0.5 percent, compared with 3.5 percent now, unless they are equipped with so-called scrubbers to clean up sulphur emissions. This will be enforced by fines levied by the IMO’s member states. The IMO regulations will create a level playing field for the global shipping industry and if it were to back down, it could lead different rules being implemented in different regions, creating greater levels of uncertainty for the global industry.
S Korean bunker premiums drop to 2-month low, but demand to improve in q4
South Korea’s delivered 380 CST bunker fuel premium to the Mean of Platts Singapore 380 CST high sulfur fuel oil assessment fell to a two-month low at $20.92/mt last Tuesday on weak demand amid the holidays, according to S&P Global Platts data. It was last lower at $19.58/mt on July 26, the data showed. Market sources, however, expect demand to improve in the fourth quarter. Premiums averaged $43.52/mt in August, compared to $33.58/mt from the start of September to September 25, according to Platts data. Bunker premiums had soared end-August due to a lack of fuel oil supplies, market sources said. The supply tightness eased in early September with the arrival of replenishment cargoes, while demand fell, sources added.
Singapore 380 cst HSFO hit 46-month high on higher crude, tightening supply
The Mean of Platts Singapore 380 CST high sulfur fuel oil jumped to a 46-month high last Tuesday due to strong crude oil prices and tightening supply, S&P Global Platts data showed.
The MOPS 380 CST was assessed at $474.08/mt Tuesday, the highest since October 31, 2014, when it was assessed at $476.05/mt, the data showed. The stronger price followed an upward movement of crude oil, traders said. The front-end Brent futures price at Asian close jumped to $82.17/barrel Tuesday, the highest since November 10, 2014, Platts data showed. Singapore is likely to receive only 3 million-4 million mt of arbitrage cargoes from the West in October, down from 4.5 million mt in September, fuel oil traders said. The traders attributed the decline to refinery turnarounds especially in Europe and the start-up of new cokers.