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Shipowners see rise in IMO-compliant fuels, but doubts persist

Shipowners, who are facing one of the biggest changes in the oil industry in decades, are seeing more fuels that will be compliant with new rules on sulphur emissions from ships, but some say the way forward is far from clear.

The United Nations shipping agency the International Maritime Organization (IMO) will from January 2020 limit the sulphur content in fuel ships use to 0.5 percent. With the exception of some zones around northwest Europe and North America known as Emission Control Areas where maximum sulphur content is restricted to 0.1 percent sulphur, the current global cap is 3.5percent. The sulphur switch will be a mammoth task as it requires adapting the 300 million tonne a year bunker fuel market, valued at over $200 billion at current prices.

Oil majors, including BP and Royal Dutch Shell , have announced they are producing very low sulphur fuels that meet the 0.5 percent requirements but the specifications of those products are not yet clear nor are the ports where they will be available.

Shipping rates rising off bottom, still far from recovery

Trade conflicts and geopolitical risks are driving sentiment on ocean shipping rates, particularly in the container market. In liquefied gas sectors, propane transport to Asia is looking increasingly vibrant after a multi-year malaise, while natural gas transport appears to be coming out of its recent doldrums, with hopes for a major revival.

Despite the hype, rates for crude tankers remain unimpressive, and rates for dry bulk shipping are still ominously low. The big question in the container-shipping industry is whether U.S. President Donald Trump’s threat to impose tariffs on an additional $300 billion of Chinese exports will lead to accelerated import activity, and thus an increase in the per-box freight rate in the near-term – or, alternatively, a downturn in both volumes and rates.

In 2018, US imports surged as companies raced to beat the tariff increase on the initial $200 billion slate of Chinese products. Spot rates for liquefied natural gas (LNG) carriers hit an all-time high of around $200,000 per day in November 2018.

One of the few bright spots for vessel owners in 2019 has been the revival of rates for very large gas carriers (VLGCs), a sector that had sunk below break-even for a dangerously long stretch and that desperately needed a breather. There’s a great deal of talk about a recovery in rates for very large crude carriers (VLCCs) – tankers that each have a carrying capacity of about two million barrels of crude oil.


Hamburg port volume up 6.4pc in first quarter

Hamburg, Germany’s big box port, has posted 6.4 percent year-on-year growth in first quarter container throughput to 2.3 million TEU.

Both general cargo throughput at 23.9 million tons – up 5.4 per cent – and bulk cargo throughput at 10.7 million tons – up 7.5 percent – rose substantially in the first three months. A total of 121,000 TEU for container transport with the US represented an almost fourfold jump, catapulting the America into second place among Hamburg’s top trading partners. Twelve liner services now link the Port of Hamburg directly with 29 ports in the US, Mexico and Canada. Some 14.1 million tons, in the general cargo segment German foreign trade with the US now constitutes the second strongest market after China with around 21 million tons.

The first quarter feeder traffic and landside seaport-hinterland services were up eight percent to 1.45 million TEU. Of the total of 2.3 million TEU handled, 865,000 TEU – up 3.8 percent – were transported by feedership to other European ports.

Mangaluru port gets mechanised coal-handling facility

New Mangalore Port Trust (NMPT) has added a new facility for mechanised handling of coal at the port. Chettinad Mangalore Coal Terminal Pvt Ltd has executed the mechanised common user coal terminal project at a cost of Rs. 469.46 crore at New Mangalore Port.

Addressing media persons at the inauguration of the newly constructed terminal for mechanised handling of coal at berth no. 16 on Wednesday, V Chandramoleeswaran, Director of Chettinad group, said the capacity of the fully automated coal terminal is 10 million tonnes per annum (MTPA) of common user coal. Now the port is handling around 4 MTPA of common user coal. The facility has two ship unloaders with designed discharge rate of 4,000 tonnes per hour (TPH). Two stacker-cum-reclaimers with capacity of 4,000 TPH for stacking and 4,000 TPH for reclaiming are part of the coal terminal. He said the coal would be transported from storage yard to wagon yard in fully enclosed conveyor belt system. The wagon loading system can load seven rakes per day. A rake includes 59 wagons. He said a wagon can be loaded in a minute. The 325-metre-long and 25-metre-wide berth at the port has the capacity to handle vessels up to 1 lakh DWT (deadweight tonnage) with maximum permissible depth of 15.1 metres.

The terminal will become fully operational next month.

Asia LNG spot price drops below $5/mmbtu as supply floods market

The Asian spot price for liquefied natural gas (LNG) has dropped to below $5 per million British thermal units (mmBtu) this week as sellers flooded the market with spot cargoes, trade sources said.

The price is at its lowest level since the beginning of April. Oil majors Shell and BP each offered a July loading cargo at $4.60-$4.65/mmBtu on Wednesday in Platts market on close (MOC) window, at a price well below the $5.35/mmBtu levels seen last Friday, they added. A large tender by Egypt to sell up to 13 cargoes, as well as several sell tenders by Indonesia’s Pertamina, Angola and Australia are also weighing on the market, sources said.

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