Low prices, high Chinese inflation and low freight rates leads to tough decisions. After running the Yard for many years with a notable Korean flavor however without any profits Daeyang Group decided to sell their shares to CSSC Dalian Shipbuilding and step down from the Management. According to rumors the intention of CSSC is to continue operating in the Shiprepair Market however at a later stage may shift to Navy Projects. Shanghai Shipyard one of the oldest running Shiprepair Yards in China is stopping Shiprepairs and concentrating in Newbuildigns with a possible Management takeover by Hudong Zhonghua Group. Fishermen in Fujian are trying to get rid of Fujian Huadong Shipyard protesting and not allowing any Vessel to exit the Yard. One Japanese Owner has a Vessel trapped in the Yard for about one month now. The Local Government seems too indecisive to handle the situation while at the same time no workable solution is on the table. Troubled waters may be over for Haizhou Shipyard since changes in the Management and a possible Government Deal may ease the cash flow problems which will certainly assist to smooth the workflow in the yard Chinese New Year is 19th February 2015 after which more changes in the Shiprepair Market are...
Read MoreA transformation in US gas production could prove the basis for new export trades in ethane, according to a study published by Lloyd’s Register (LR) this week. Produced from natural gas and a by-product of the oil refining process, ethane is a vital component in the production of ethylene which is itself used to make polythene, PVC, ethylene glycol and styrene. If the LR analysis proves correct, long-haul trades from the US to Europe and Asia could prove the catalyst for a new generation of so-called VLECs – very large ethane carriers. The shale gas revolution in the US and soaring production of gas is leading to growing volumes of ethane in the US for which there is no demand and which is therefore potentially available for export. The LR analysis suggests that 200,000 barrels of ethane are currently being “rejected” in the US every day because there is insufficient domestic demand. “Rejected ethane represents a potential surplus to drive increased domestic demand or exports,” the report states. “When domestic demand is insufficient there currently is no mechanism to export the surplus to balance the market.” However, new capacity to distribute ethane domestically and to pipe it to new export terminals will come on stream in the US soon. The 50,000 b/d Mariner East pipeline, for example, is scheduled to become fully operational in the first half of 2015 and will facilitate the delivery of propane and ethane to Marcus Hook. The project is being undertaken by Sunoco and will enable ethane and other products to be processed, stored, chilled and distributed to local, regional and international markets. Ethane exports to Europe will flow through a new export terminal. Meanwhile, a new LPG export terminal also capable of exporting ethane is under development in Houston. Mostly concentrated in the Middle East and the US, global ethane production last year totalled about 2.6m tonnes, according to the LR study. But the ability to handle and process more ethane in the US and make it available for export means that volumes could more than triple in the coming years – to around 8.5m tonnes by 2020. However, most seaborne movements of ethane are shipped in relatively small liquefied ethane/ethylene carriers with...
Read MoreMuch has been made of soaring US shale gas production and the dramatic effect it is having on the country’s LNG import/export trades, but fundamental changes in traditional US tanker trades, notably to and from West Africa, have been less well reported. Changing US energy patterns are having a far-reaching impact on the country’s conventional tanker trades, notably in the Suezmax and products tanker sectors. In July, spot fixtures for Suezmax tankers out of West Africa reached 95, almost double the June figure and a sharp increase on every monthly figure for the last two years. The reason, according to New York broker Poten & Partners, is the narrowing of the spread in price between Brent crude oil and West Texas Intermediate. Refinery closures in the US have reduced the requirement for West African imports, the broker says, whilst the ramping up of US crude oil production to the highest levels in 22 years has further impacted the traditional trade for Suezmaxes between Bonny and Philadelphia. Increased activity last month soon had an impact on Suezmax rates. “Timecharter equivalents responded accordingly,” comments Poten in a recent report, “to the delight of many shipowners.” Rates for Suezmaxes between West Africa and the US have averaged about $12,000 a day in the year to date, but plunged to just $6,000 a day in June. But increased activity in July saw rates break through the $20,000 threshold. However, Poten believes the long-term health of the Suezmax trade out of West Africa remains vulnerable. Demand for West African crude depends to a large extent on short-haul Atlantic Basin trades and therefore the spread between Brent crude prices and West Texas Intermediate. The narrowing in spread may have given a short-term boost to the Suezmax business, but the US Energy Information Administration (EIA) expects the spread to return to a more normal $6 a barrel by year end. There are also supply factors to consider, Poten points out. The current Suezmax fleet of around 440 vessels will grow by another 50 vessels or so as today’s orderbook is commissioned in the months ahead. But each 100,000 bbls of West African crude export to the US or Europe only generates demand for two to three...
Read MoreThe Syrian problem remains unresolved. The UK Government decided last week not to participate in military strikes against the Assad regime, President Obama has now decided to follow suit and go to Congress before taking any action and the French Government has also discussed the subject at its Government, but President Hollande is determined to support the US. Meanwhile President Putin has now indicated that Russia would support a UN resolution – although it is still unclear what China would do. So the situation remains unresolved – and it looks as is the Syrian problem will be with us for a few more months. The main problem is that – should a Syria military intervention be sanctioned by the UN, or the US takes the decision to go ahead alone without UN agreement, consequences could spread all around the region, resulting in two major factors for the maritime world. Firstly, the closure of the Suez Canal is now a real threat, the first such possibility for many years. Those of us having long careers in the marine industry can only shudder about this situation – we remember all too well the results of previous closures. Of course, the Syrian problem, even if military action is taken, may not result in closure – however, adding the current political problems in Egypt, the possibility may well become a reality. Some 1.4m bbls/d transit the Suez Canal – so it is clear that any closure would have a significant affect upon the oil and tanker markets. Secondly, the subsequent problems facing the Middle East if such military action is taken will have a substantial affect upon tanker market. We have already seen Saudi Arabia start pumping oil at a record pace of above 10m barrels/day, which in turn could create havoc in the tanker market, as major oil production countries could face output issues. According to the latest weekly report from London-based shipbroker Gibsons, “the price of oil will always be at the mercy of global political tensions. Building hostility in North Africa and the Middle East has forced the price of crude oil up to a six month high over the course of the past week. It has also driven Brent...
Read MoreDuring the time elapsed since the origin of the present depression the Shiprepairs Market in China is beginning to show signs of progressive recovery with consequent trends for increased Prices etc however these signs may not withstand for long. Although all the major Shipyards in Mainland China are presently quiet busy the fact is that the majority of the Vessels perform short Drydocking periods with limited amount of Works leaving the Shipyards eager to compete for Vessels with sufficient Scope of Works and therefore are ready to squeeze Drydocking slots as necessary. The usual competition between Chinese Shipyards will always prevail despite efforts of increasing their Prices therefore it is expected that Owners may continue to secure till the end 2010 discounted Price Levels etc. Our Company through more than 20 years of long term cooperation and personal relations with the Management of certain Shipyards is always in a position to secure favorable Terms & Conditions for our Clients ensuring that their Projects are completed to Owners’ satisfaction. In more detail kindly find below a List of Mainland China Shipyards which are securing for us Dockspace and Services in priority: North China: QINGDAO BEIHAI SHIPYARD – Facilities for Drydocking up to VLCCs Shanghai Area: CHENGXI SHIPYARD – Facilities for Drydocking up to Capesizes HRDD – HUARUN DADONG DOCKYARD – Facilities for Drydocking upto Capesizes Ningbo Area: ZHOUSHAN IMC YY SHIPYARD – Facilities for Drydocking up to VLCCs South China: GUANGZHOU DOCKYARDS CO. LTD. – Facilities for Drydocking up to VLCCs Our competitive Services are offered also in other Ports and Locations Worldwide including SINGAPORE, HONG KONG, FRANCE, TURKEY & NORTH...
Read MoreIt was Clarkson’s Martin Stopford who recently highlighted the fundamental change in day-to-day operating economics of global shipping. Instead of the assets themselves constituting the largest single cost centre, it was now the fuel required to run them, he said. And there was unlikely to be a let-up, he warned: low-sulphur fuels required in the world’s ECAs will, of course, cost more as demand grows, and ship operators who run ships in such areas will face some major decisions on how they manage their ships. His comments have been amply illustrated in recent days by the voyage of the Greek-owned 134,000 m3 ice-class LNG tanker Ob River, which has just shipped a cargo of gas from Hammerfest in northern Norway to Japan’s Tobata port through the Arctic Ocean. Admittedly with the support of a nuclear-powered Russian icebreaker, shrinking ice cover in the Arctic means that such a voyage is now technically possible. And if northern ice continues to melt as it has done recently, new routes through northern seas will dramatically alter tonne-mile shipping demand and ship type requirements. Whether you call it global warming or climate change, our planet’s environment today is radically different as compared with ten years ago, with fundamental implications for shipping. Aircraft burn the highest grades of hydrocarbon fuel and, arguably, carry the world’s most valuable commodity. Mostly, the rising costs of operation can be passed on. Ships, on the other hand, burn the residues that no-one else wants, and transport essential raw materials and manufactured goods which few people even think about. Rising running costs cannot be passed on, and if ship operators fail to cover direct costs, something has to give. Leading shipping companies are keen to highlight their emissions-cutting initiatives, and a growing number of charterers – estimated to foot the bill for as much as 70% of bunkers – are focused on fuel efficiency as never before. Cynics argue that shipping companies’ initiatives have little to do with reducing emissions, and are fundamentally survival strategies in over-tonnaged markets where rates don’t stack up by a long way. Mostly, so far, shipping companies’ policies have centred on speed reductions. The exponential nature of the speed:power curve means that even a small...
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