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Dry bulk newbuilding activity took a dive in 2019

While 2019 was a year of great turbulence in the dry bulk market, some silver lining can be found in the fact that future tonnage supply could be limited, at least given the low level of newbuilding activity. In a recent report, shipbroker Allied Shipbroking said that “2019 was one of the slowest in terms of dry bulk newbuilding activity.

New ordering activity has been curtailed significantly (especially when compared with the two preceding years) and the worldwide orderbook has significantly deflated during the past 12 months, as a result of the excessive volatility that has dominated the freight market this year. Beginning with the kingpin of the dry bulk sector, the Capes, has definitely had a remarkable year, with the first half of the year seeing rates hover for several weeks at levels as low as US$3,500 per day, while during the final part this same market managed to reach a peak of just above US$38,000 and held for several months above the US$ 20,000 mark”.

Bunker prices will rise, regardless of typ

As the International Maritime Organization (IMO) sulphur regulation date of 1 January nears, availability of the new, very low-sulphur fuel oil is moving in the right direction – although too slowly – high-sulphur fuel oil inventories are shrinking globally at ports, and demand for marine gas oil is about to rise significantly.

Marine Bunker Exchange, MABUX, outlines what it expects in the first three months of the year. The impact of the new sulphur regulation on the global bunker market and on the price of bunker fuel is starting to show, as players – from shipowners to ports and bunker suppliers – have less than one month left before the deadline. Following the global bunker market closely, the emerging picture is becoming clearer, according to MABUX. It involves price hikes, regardless of whether ships have chosen scrubbers and traditional high-sulphur fuel, the new, very low-sulphur fuel oil (VLSFO), or marine gasoil (MGO) as the route to compliance.

LPG shipping market: USA LPG exports a major growth driver

Over the course of the past few years, many ship owners have invested in the once niche shipping market of LPG carrying vessels. For many of them, this move turned out to be quite lucrative, as demand rose and supply was kept relatively stable.

Having turned into a net exporter of LPG as recently as 2011, the USA now account for 28 percent of all LPG exports by volume. During the whole of 2018, the USA exported 40.7 million tonnes of LPG, based on Refinitiv vessel tracking data. This put them well ahead of the UAE with 14.7 million tonnes, Qatar with 12.6 million tonnes, Saudi Arabia with 12.0 million tonnes, Algeria with 7.1 million tonnes, Norway with 6.5 million tonnes.


2020 freight rate negotiations will be as tough as necessary

Freight rates are under pressure, global trade is hurt by trade wars, fleets are outgrowing demand and, if this was not enough, the price of fuel is about to take a leap, as the IMO sulphur regulation comes into force on 1 January 2020.

Shipping companies are facing the toughest freight rate negotiations with their customers in years. As the industry prepares for the sulphur regulation to take effect in January, a combination of factors, from trade wars to weaker economy fundamentals, is putting shipping companies in a difficult position ahead of negotiations with clients and customers over freight rates that must compensate for a jump in the price of fuel.

India’s container volumes to stay muted

Growth in container trade operator (CTO) volumes is expected to remain muted in this fiscal on account of subdued export-import trade environment. A report by ratings agency Icra shows that the overall CTO volumes recorded some improvement during Q2 of FY20. However, the overall outlook is poised to stay bleak. Container Corporation of India Ltd (Concor), the market leader in the segment has already witnessed moderation in market share as it focused on profitable cargo, the report noted. Across major ports, container volume growth has slowed to 3.5 percent in April-October of FY20 as against 11 percent growth in FY19. Concor has lowered its volume growth guidance for this fiscal from 8-10 percent earlier to 1-2 percent now, indicating anticipation of lower volumes.

Urals oil loading plan from baltic ports revised up

The Urals crude oil loading plan from Baltic ports was revised up by 0.4 million tonnes to 6.3 million tonnes in January as Surgutneftegaz and Rosneft added two cargoes each to the plan, traders quoted as saying last week. Rosneft added two additional cargoes to the loading plan of 100,000 tonnes each: one loading from Primorsk on Jan. 19-20 and one loading from Ust-Luga on Jan. 24-25, traders said. Surgutneftegaz also added two cargoes of 100,000 tonnes each loading from Ust-Luga and Primorsk and sold it in a spot tender earlier on Monday.

The preliminary version of the Urals loading plan for January was issued on Friday last week and planned Urals Baltic exports at 5.9 million tonnes. According to industry sources, the increase in the loading plan was due to a stand-off over Russian oil supplies to Belarus in 2020.

Shippers urged to take another look at cargo insurance

A fundamental misconception of risk is causing many shippers of ocean freight to completely overlook the need for cargo insurance of any kind and to cover against a multitude of eventualities. Many industry professionals fear the endemic perception that insurance is unnecessary or not worth the expense is unlikely to change in the foreseeable future. One estimate is that more than 90 percent of all cargo imported into the United States (US) does so without any insurance, according to the US-based Association for Trade Compliance (ATC).

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