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Tag Archives: Tops

Capesize Market in the Doldrums: Cyclones and Dam Collapses Plague Dry Bulk Rates for Larger Ships

With the first quarter of 2019 already in the past, most dry bulk ship owners will be looking to forget it as soon as possible. Dry bulk rates have plunged as a result of a lack of cargoes, on the back of physical and other disasters, ranging from cyclones in Australia to Vale’s dam collapse in Brazil. As a result, dry bulk ship owners have sought to alleviate the supply side of things in the beleaguered dry bulk market, with scrappings already close to the whole of 2018 mark, while ...

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Listed Shipping Companies Invest In New Ships

Has it been a good year for shipping? Shipping has faced another challenging year as excess yard capacity and the resulting surplus of ships has continued to weigh on spot and term market rates. However, green shoots are appearing, and several long term trends are developing that will reward those with the tenacity to stay in the shipping markets. Has it been a good year for the global economy? The shipment of goods around the world has been surprisingly resilient despite fears around the US China trade dispute. Media hyperbole ...

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Chinese Purchases Of US Soya Beans Bounce Back In January

Exports to China rose in January, reaching 1.4 million tonnes, up from only 69,079 tonnes in December and accounting for 30.7% of total US soya bean exports in January. This is the highest monthly exports to China since March 2018 which marked the start of the trade war, and is largely due to good will purchases by Chinese buyers in an effort to advance trade talks. In January, for the first time since October 2018, exports of US soya beans were higher than those in the previous month. Exports grew ...

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Strong Chinese Oil Imports Could Offer Boost to the Tanker Market

After a dismal 2018, tanker owners could harbor further hope for a freight rate market revival, as China’s thirst for crude oil imports is stronger than ever. In its latest weekly report, shipbroker Banchero Costa said that “as recorded at the end of 2018, China’s crude oil imports still exceed previous year’s levels. In February 2019, supported by the risen demand of new private Chinese buyers and with new plants set to start commercial operations this year, crude oil imports rose 21.6 percent year-on-year to reach 39.2 mln tonnes, as ...

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More than words

At Softship, as provider of IT software solutions designed specifically for the international liner shipping and port agency markets, we see first-hand the gap between perception and reality when it comes to digital adoption by shipping companies. The truth is that many shipping companies often talk a good talk when it comes to their increased use of digital technologies, but if dig a little bit deeper, beyond the rhetoric, you are often likely to find something very different. In many respects, this is due to a disconnect between using IT ...

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IMO 2020 = M&A?

Financially vulnerable carriers could be pushed into M&A by the extra costs associated with the new low-sulphur fuel law. If that happens, how might competition on key trades be affected? Most of the major carriers have now reported full-year 2018 financial results and thanks to a 4Q18 rising trend in demand and freight rates, boosted by the sugar-rush of the threatened US tariffs, the industry was able to return a small profit in the region of $1.5 billion, as reported in Drewry’s newly published Container Forecaster report. Welcome as that ...

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Product Tanker Rates Facing More Volatility Moving Forward

A number of factors have been coming into play, when it comes to determining freight rates in the product tanker market. In its latest weekly report, shipbroker Gibson said that “over the past few weeks, MRs trading out of Europe have continued to outperform expectations. In recent years, such volatility has typically been driven by erratic buying from West Africa, or stronger demand in Latin America. Volumes destined for the United States have rarely been a driver of volatility, generally ticking over at a steady and predictable pace. However, a ...

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Dry Bulk Market: Frustration Abound for Capesizes

Capesize The Capesize market endured another week of frustrating troughs as rates languished at near historical lows. Monday’s Baltic Capesize Index (BCI) route 5TC posted an index down -145 to settle at $4,035 and by Friday finished at $3,796. The beginning of the week had the Pacific market enveloped, with news of category four Cyclone Veronica. While the worst was over by Tuesday, reports of Rio Tinto declaring force majeure on Friday circulated for several Port Walcott berths. This marked an ongoing recent string of bad news events distressing the ...

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IMO 2020’s knock-on effects for Gulf Coast waterborne crude flows

The shipping industry faces a world of uncertainty as IMO 2020’s forthcoming rule changes the makeup of marine fuels to a lower 0.5% sulphur requirement. Ship owners will lean heavily on the supplies of complex Gulf Coast refiners that can turn the heaviest crudes into valuable low-sulphur diesel. To plan for the onslaught of demand for middle distillates that will emerge with the marine fuels transition, refiners are adjusting typical maintenance schedules. Usually, facilities undergo planned outages for upkeep during spring and autumn months. This year, refiners are scheduling a ...

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High Cost Fleet Upgrades to Dominate Shipping Industry in the Years to Come

Ship owners should be prepared for a lengthy and high cost process of constant revamping of the existing fleet of ships, as more and more bans and regulations are being put into force with a view to limiting the industry’s environmental impact. So, while scrubbers and low-sulfur fuels are the main discussion points today, ahead of the IMO 2020 rule, in the future the global agenda will undoubtedly shift towards LNG and other means of decarbonising shipping. In its latest weekly report, shipbroker Allied Shipbroking said that “nine months till ...

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Scrubber installation to ease supply pressure in crude tanker market

The deadline for implementing the IMO’s 2020 low-sulphur bunker fuel regulations is just three quarters away, and the shipping industry is still uncertain over the use of scrubbers. Although most shipowners are expecting tight availability of compliant fuel to widen the price differential between heavy-fuel oil (HSFO) and low-sulphur fuel oil (LSFO) in 2020, estimates for the premium in price vary significantly, ranging from $200 to $600. It goes without saying that the price differential between the two fuels is critical for determining the economic viability of scrubber installation, as ...

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Force majeure success not a sea change

It is difficult to successfully argue that contractual performance has been prevented or delayed by force majeure. This is in part because English courts or arbitration tribunals will interpret these clauses strictly and narrowly against the party seeking to rely on them. Recent decisions, including Triple Point Technology v PTT (2017) and Seadrill Ghana v Tullow Ghana (2018), are evidence of this approach. However, Sucden Middle-East, represented by Nick Fisher of HFW, has recently relied successfully on such a clause in the Commercial Court, on appeal from arbitration. The case, ...

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Dry Bulk Market: No Capesize Transactions During First Quarter of 2019 Highlight Market Decline, as Prices Decline in Smaller Ship Classes

A reduction of 50% in the Baltic Dry Index from mid-December until the end of January has created “waves” in the S&P market as well, with values falling. In its latest weekly report, shipbroker Intermodal said that “contrary to the December 2018 forecasts but in line with the expectations of the dry bulk market, the first quarter of the year closed negatively. The BDI index decreased by around 50% from mid-December until the end of January and moved to the ytd low of 595 points on 11 February. Although a ...

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Secondary offerings steal limelight in 2018, but will IPOs make a comeback in 2019?

The market for IPOs across the global shipping industry has remained understandably muted in recent years but secondary offerings continue to be an important funding mechanism, according to a recent report from Drewry Maritime Financial Research. Despite low interest in shipping IPOs in the US over the last few years, listed shipping companies continue to raise money through secondary/additional offerings and bond offerings in the US market with Oslo emerging as the preferred platform for shipping companies to raise equity. Investor appetite for shipping sector IPOs has remained weak as ...

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IMO 2020: Ready or not?

Analysis by Jonathan Leitch and Gordon McManus, research directors for the EMEARC refining and oil products team. New Year’s Day 2020 is firmly marked in the calendar as the refining and shipping industries prepare for change. The International Maritime Organisation (IMO)’s rules, in force from 1 January 2020, will see the current maximum fuel oil sulphur limit of 3.5 weight per cent (wt%) reduced to 0.5 wt%. This is the largest reduction in the sulphur content of a transportation fuel undertaken at any one time. With less than a year ...

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