News & Media

30 December, 2019

Australian Newsletter - Issue 606

BDO: SHIPPING CONFIDENCE REACHES 18-MONTH HIGH
Source: World Maritime News
BDO: Shipping Confidence Reaches 18-Month High
Confidence in the shipping industry rose in the last quarter to its highest level for 18 months, according to a survey from shipping adviser and accountant BDO. As informed, the average confidence level expressed by respondents to the survey was 6.4 out of 10.0, compared to 5.8 Q3 2019. This is the highest rating since the same level of confidence was recorded in May 2018, and it is necessary to go back to February 2014 in order to see confidence at a higher level.  FULL STORY

2019 ENDS WITH PLETHORA OF NEWBUILDING AND S&P DEALS
Source: Hellenic Shipping News
Ship owners have sought to seal a number of deals prior to the end of 2019, both in the newbuilding and the second hand markets. In its latest weekly report, shipbroker Allied Shipbroking noted that “things remained interesting for yet another week in the newbuilding market. In the dry bulk sector, we witnessed an another good rally for the Kamsarmax size segment, which saw its Orderbook boosted by 4 (optional + 4) units. This may have caught many by surprise, given the steep negative pressure that the overall dry bulk market is currently under.  FULL STORY

INDUSTRY SHOULD BE AWARE OF IMO 2020 TEETHING PROBLEMS
Source: World Maritime News
The fast-approaching entrance into force of the global sulphur cap is a change of a magnitude never attempted before on a global basis. Under the new regulation, the limit for sulphur in fuel oil used on board ships operating outside designated emission control areas will be reduced to 0.5% from 3.5%. This is expected to significantly reduce the amount of sulphur oxides emanating from ships. In order to comply with the upcoming regulations, shipowners can install scrubbers or use compliant fuels. Many shipowners have opted for open-loop scrubbers that use seawater as the process fluid and discharge the treated water overboard. However, the rest of the global fleet is expected to comply by using low sulphur fuels and marine gas oils.  FULL STORY

MISERY LOOMS OVER TOP COAL SHIPPERS AS CHINA TO BUY LESS IN 2020
Source: Dry Bulk Market (International Shipping News)
China isn’t cutting back on consumption of the most-polluting fossil fuel just yet, but it is set to reduce imports. The world’s biggest coal buyer will likely purchase less from overseas in 2020 after a boost this year, according to analysts. With domestic production rising to a record and overall demand nearing a plateau, miners from top exporters such as Indonesia and Australia will find themselves squeezed. China’s coal imports have raced ahead in 2019, surprising many who had predicted that the government would strictly clamp down on shipments in the later months just as it did in 2018. With economic growth at its weakest in decades amid a trade war with the U.S., import curbs were eased on the nation’s most-consumed fuel to help mitigate the pain of a slowdown.  FULL STORY

MIND OVER MACHOISM: WILHELMSEN SHIP MANAGEMENT’S MENTAL HEALTH AWARENESS CAMPAIGN ON BOARD
Source: International Shipping News
Mental breakdowns could happen to seafarers especially in conditions where they work in isolation at sea. There are huge risks involved when seafarers are faced with the possibility of unwanted reactions, unexpected actions, or even inaction that would impact other people, environment and property. Mental health is very important and WSM aims to break the taboo on this subject. To begin with, WSM’s initial release of the mental wellbeing campaign will focus on three areas: stress, sleep and overall psychological health of the seafarers.  FULL STORY

KOREAN SHIPBUILDERS WIN BIG ORDERS NEAR YEAR’S END
Source: Shipbuilding News
Korean shipbuilders are pulling out all the stops to land more orders as the year nears its end.
Hyundai Heavy Industries Group announced on Dec. 22 that it has signed a US$376 million contract for two 174,000-cubic-meter LNG carriers with an overseas shipping company. The vessels ordered this time are 299 meters long, 46.4 meters wide and 26.5 meters tall and will be powered by dual-fuel engines which will greatly enhance their operational efficiency. These ships will be built by Hyundai Heavy Industries in Ulsan and delivered to the client in the second half of 2022.
FULL STORY

EXHAUST GAS CLEANING SYSTEMS (SCRUBBER) GUIDANCE
Source: Marine Insurance P&I Club News
In a few weeks, IMO’s ‘global sulphur cap’ will take effect.
The permitted levels of SOx in ship emissions will be restricted in association with the revised MARPOL Annex VI, ie the current sulphur limit of 3.5% of any fuel oil used onboard ships will be reduced to 0.5% from 1 January 2020, except for ships using ‘equivalent’ compliance mechanisms. It is yet to be proven how reliable the quality and supply of low sulphur compliant fuel (LSFO) is. There is a possibility that the price of high sulphur fuel oil (HSFO) could see a sharp decline in 2020. 
FULL STORY

HOW TO PRIVATISE PORTS, THE AUSTRALIAN WAY
Source: Kris Kosmala (Splash247.com)
Every country in the world views their ports as critical to their ability to trade with other nations. This is especially true of Australia, an island country with no land bridges to other nations. Port infrastructure was always considered to be of utmost strategic importance to the wellbeing of the nation. However, building and maintaining large strategic assets like ports has a downside – it is expensive, and unlike the roads, hospitals, schools, airports, or even rail, the value of ports investments doesn’t register highly with the voters.  FULL STORY

AUSTRALIA: RECORD YEAR OF RESOURCE EXPORTS BUT HANGOVER IS COMING
Source: Freight News (Hellenic Shipping News)
A surge in iron ore exports is holding up the federal budget and delivering record revenue to the nation’s miners but there are fresh warnings both could be hit with a downturn in the next financial year. As new surveys confirm the domestic jobs market is slowing into 2020, a report by the Industry Department into the resources sector to be released on Thursday highlights the dependence of the budget on iron ore.  FULL STORY

ICTSI AUSTRALIA CITED FOR PORT MANAGEMENT EXCELLENCE
Source: International Shipping News
Victoria International Container Terminal (VICT), the Australian unit of International Container Terminal Services, Inc. (ICTSI) at the Port of Melbourne, has been recognized by the world’s oldest maritime publication, Lloyd’s List, for excellence in port management and infrastructure at the recently-concluded Asia Pacific Awards 2019. Located at Port Melbourne’s Webb Dock East, VICT was cited for investing heavily to create Australia’s first fully automated container terminal, adding over 1-million twenty-foot equivalent units (TEU) annual capacity in just two years; and the terminal’s commitment to delivering safer, consistent, predictable and accurate operations.  FULL STORY

COMMITMENT TO NEGOTIATE ON PORT OF NEWCASTLE LONG TERM DEED, AND DELAY TO 33 PER CENT FEE INCREASE FOR SHIP OWNERS AND AGENTS
Source: Rod Nairn (Shipping Australia Limited)
On 16 December Port of Newcastle stunned Shipping Australia’s members with an announcement of 33 per cent increase in coal ship navigation service charges from 01 January 2020. This new fee would apply unless the port user signed a 10 year deed which waives the right to object to matters detailed in the deed such as:
The initial NSC rate of $0.8121 per GT
The initial wharfage rate of $.0802 per RT
The annual increase of 4% on both of the above, and
An unknown additional amount attributable to PoN capital investment.  FULL STORY

CLEANER SHIP EXHAUST RULES HIT LOG EXPORTS
Source: Brent Melville (Otago Daily Times)
Logging companies will be fronting the costs for fuel quality upgrades for freight shipping vessels following new international pollution regulations that start on January 1. The new maritime organisation convention, which aims to radically cut sulphur emissions by 80%, will require international shippers to switch over to fuels with a maximum sulphur content of 0.5% — down from the current 3.5% cap. Some shipping companies have already fitted ‘‘scrubber’’ technology to clean the ships’ exhausts, allowing them to continue burning the higher sulphur fuel, while others are converting to run on liquefied natural gas, which is sulphur-free. FULL STORY

GWADAR PORT TO BE IMPORTANT PLATFORM FOR REGIONAL CONNECTIVITY: CHINESE SCHOLAR
Source: Port News (Hellenic Shipping News)
Gwadar Port is an extremely important platform to extend China-Pakistan Economic Corridor (CPEC) westward to a more distant region and becomes an important platform for regional connectivity. At the same time, the construction speed of Gwadar Port determines the development speed of Pakistan as a whole. Therefore, there is a need to further speed up the construction of Gwadar Port and make it “Shenzhen of Pakistan”.  These remarks were shared by a visiting professor at Southwest University of Political Science and Law, Cheng Xizhong, in his article published by China Economic Net.  FULL STORY

DRY BULK MARKET: WEAKNESS ACROSS THE BOARD
Source: Dry Bulk Market (International Shipping News)
The Capesize market this past week has been attempting to recalibrate itself in consideration of weakening freight levels and increasing IMO bunker costs. A week out from Christmas there was a definite holiday feel, with some traders already absent. Opening Monday, trade was sparse in both Basins, but by mid-week there was signs the Atlantic had bottomed out and improved sentiment was found. The Pacific continued its rout, with the C10 opening the week at $17,000 to close at around $11,200.  FULL STORY

ASIA PACIFIC UPSTREAM – 5 THEMES TO WATCH IN 2020
Source: Oil & Companies News (Hellenic Shipping News)
Wood Mackenzie has identified five themes related to project sanctions, exploration, M&A, energy transition and IMO 2020 that will impact Asia Pacific’s upstream industry in 2020. Australia leads in bumper year for Asia Pacific FIDs
Asia Pacific is expected to see a boost in major project sanctions next year. About US$35 billion of new development expenditure and 4.6 billion barrels of oil equivalent (boe) of resource could be sanctioned in 2020, compared to only US$5.5 billion and 1.2 billion boe of new projects getting the go-ahead in 2019.  FULL STORY

Whilst every effort has been made to ensure the accuracy of the information contained herein, Inchcape Shipping Services accepts no liability nor makes any representations or warranties of any kind, express or implied, as to its completeness, accuracy, reliability or suitability