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Demolition market off to a good 2020 begin

With the majority of shipping markets on a downward path, market delegates were expecting an increase in ships’ recycling activity and this scenario is now materializing. In its latest weekly report, shipbroker Clarkson Platou Hellas said that it seems the positivity seen last week has carried forward into this week as various market negotiations pushed price levels further and proved that any previous sales were not just a flash in the pan. This stability has come from the Indian steel industry remaining positive on the back of their improved domestic steel rates and also the Bangladeshi steel market again active in their enquiries to purchase inventories from the ship recyclers. This has resulted in the Chattogram shores awakening from their New Year slumber and again offering competitive rates. Cash Buyers who gambled on this positive bounce will now be reaping the rewards from purchasing tonnage that was deemed ‘above the market’ at the time, pre-Christmas holidays’ and starting the year off on a strong foothold.


How decarbonizing shipping could unlock a worldwide energy transition

Climate change requires urgent action in all sectors of the economy – including maritime shipping, which carries close to 80 percent of global trade and accounts for 2-3 percent of global greenhouse gas emissions (GHG) annually. This is comparable with the emissions of large economies such as Germany and Japan. As global trade flows increase to serve a growing and more prosperous world population, emissions from shipping could grow between 50 percent and 250 percent by 2050 if no action is taken. Shipping is not included in the Paris Agreement. However, to curb emissions, member states of the International Maritime Organization (IMO), a specialized agency of the United Nations responsible for regulating shipping, adopted an initial GHG strategy in April 2018. The strategy prescribes that GHG emissions from international shipping must peak as soon as possible and that the industry must reduce its total annual GHG emissions by at least 50 percent of 2008 levels by 2050, with a strong emphasis on zero emissions.

China’s thirst for crude oil pushes Brazil’s Dec exports to all-time high

Brazilian crude oil exports hit a record high in December 2019 with a total 8.7 million tonnes of crude oil exported, as China continues to turn to Brazil for crude. Annual export volumes grew by 5 percent compared to 2018. The December picture matches the overall trend which shows that China has increasingly gone to Brazil to cover part of its crude oil demand. The previous monthly record for Brazilian crude oil exports of 8.1 million tonnes was set in July 2018, at which time 41 percent of the crude oil was sent to China. In December 2019, 64 percent of total crude exports want to China. In 2019, 63 percent of Brazil’s total crude oil exports went to China. That was a 42 percent jump over a five-year period, from 20 percent of crude exports in 2014. Brazilian exports to China grew by 21 percent in 2019 compared to 2018. While the lion share of Brazilian crude oil was shipped to China, Brazil only accounted for 8 percent of Chinese crude oil imports through the first 11 months of 2019.


Newbuilding orders focus on lpg, lng and tanker markets

Ship owners have shown an appetite for newbuildings in the energy segment, with tankers, LPGs and LNGs taking center-stage. By contrast, demand for dry bulk carriers has taken a back seat since the start of 2020, with market sentiment particularly weak at the moment. In its latest weekly report, shipbroker Banchero Costa said that “a fair level of activity to report with a focus on tankers, LNG and LPG markets: Greek owners Dynacom increased their commitments with a close shipbuilder, New Times in China, for 4 x Suezmax tankers to be delivered in 2022 at price of region $ 55 mln each. Greek owners, Monaco based, Central Mare ordered 2 x Suezmax tankers of 158,000 dwt (scrubber fitted) at Hyundai for delivery first half 2021 at price of region $ 65 mln.


2020-2021 better for container shipping

Sluggish activity at ports around the Greater China region has been one of the most visible effects of the downturn in world trade in 2019. But port operators – as well as shipping lines, logistics providers, and others engaged in the sector – may now be able to look forward to gradually improving conditions in 2020 and beyond. In our view improving global business sentiment and a range of local factors should mean that world trade starts to recover from mid-2020 onwards. Our forecasts indicate global trade growth picking up to 2.5 percent in 2021 and 3 percent in 2022, driving a similar rate of growth in the container sector. The outlook is uncertain, though, especially with respect to trade policy. While the phase one trade deal offers hope of better relations ahead, the risk of further barriers being erected especially between the US and China – remains. In our view, a re-escalation of trade stresses would trigger a slump in world trade and container throughput in the coming couple of years.

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