This collaboration comes following the agreement between DNV GL and Tianjin Desail
This collaboration comes following the agreement between DNV GL and Tianjin Desail
By MarEx 2015-08-20 20:00:24
The currently crippled global dry bulk freight market is expected to take at least a year to hit the road to recovery, a Platts survey of shipping market participants showed.
The survey conducted in July involved more than 100 dry bulk market participants, with respondents including shipowners, ship-operators, charterers, shipbrokers and analysts. Those polled represented all dry bulk segments across the Capesize, Panamax, Supramax and Handysize markets.
As it turned out, optimists find themselves in a minority as the bulk of respondents, 89 percent, felt the dry bulk freight market will need a minimum of one year to find its way to the thorny path of recovery. The majority (54 percent) of industry players questioned are not expecting any positive changes for at least three more years.
Among participants occupying various roles, shipowners were more pessimistic than charterers. While 73 percent of shipowners said the market would need 3-5 years to recover, 41 percent of charterers felt the turnaround would happen in less than two years. However, both camps were unanimous that freight rates will not be shooting up within the next 12 months.
Respondents in the Capesize segment had the gloomiest outlook of them all. Some 66 percent of all respondents who focus on Capesize business pegged the recovery to take longer than three years, while 53 percent of Panamax, 54 percent of Supramax and 45 percent of Handy market respondents saw recovery occurring in two years.
THE MORE THE MERRIER?
According to the survey’s results, shipping professionals are still naming tonnage oversupply as the main reason for the current state of the dry bulk freight market. Despite reasonable growth in demand across the key commodities, it remains outstripped by the availability of dry bulk vessels around the globe.
This is a message from the shipowner that is saying, “There are enough ships now. Don’t order new ones,” said a ship-operator respondent. In the meantime charterers seem to argue that the currently depressed dry bulk market can provide the right people with great investment opportunities if recovery does happen in the next two years. According to sources among charterers, shipowners with the cash may be smart to take advantage of historically low asset prices by placing new vessel orders now and having them delivered by the time freight rates rebound.
This opinion however is not shared by some analysts, who believe that a new wave of newbuilding activity may only further increase the supply of tonnage and keep the lid on any potential upswings.
NOTHING LIKE A BLOWTORCH
With the oversupply of tonnage being identified as the main factor behind the bearish dry bulk market, it comes as little surprise that tonnage recycling is seen by respondents as the primary driver for its recovery. As many as 39 percent of respondents place their hopes on scrapping.
However, looking at the dry bulk tonnage profile, many could argue that even if tonnage scrapping is to be the solution for the troubled market, it is unlikely to take effect within the next twelve months.
The inflow of newly built vessels is easily outpacing the scrapping so far this year. According to Braemar ACM Shipbroking, 302 dry bulk vessels of various sizes, totaling 21.8 million dwt have been scrapped so far in 2015. At the same time, total deliveries to date have reached
30.7 million dwt. So, the global dry bulk fleet already grew by a net 8.9 million dwt in 2015. A further 36.3 million dwt of dry bulk vessel capacity is expected to hit the water by the end of 2015. Scrapping forecasts are unclear, but the volume of tonnage recycled is unlikely to be greater than potential deliveries.
A total of 118 Capesizes are expected to be delivered in 2015 compared with 74 in 2014, while 139 Panamaxes (147 vessels last year), 300 Supramaxes (155 ships last year) and 217 Handys (137 vessels last year) are expected to enter the market by the end of 2015. As some shipping sources indicated, the volume of scrapping might gradually improve due to the heavily regulated environment in which shipowners have to operate.
Additional incentive may come from long periods of unemployment, as some shipowners may find that selling their older vessels for scrap may grant them similar income to the scattered earnings they make in the freight market. According to a shipping analyst, eventually the pressure of both tougher regulations and lack of cash flow from chartering operations will push some companies to part with their ships sooner rather than later.
KEEP CALM AND STAND ALONE
Except for the blowtorch factor, industry participants had little faith in other potential drivers for market recovery. For example, while China and Europe are determined to steer their economies towards the happy age of green energy, which certainly would not help coal demand, most respondents are not expecting to feel the effect of that in the near future.
Similarly, shipowners do not seem to believe that strength may come in numbers as none of them saw consolidation as an effective measure to increase their clout in freight negotiations. If there is a chance for consolidation to be effective, it is likely to happen on the Atlantic side of the dry bulk market as it is much less fragmented than its Pacific counterpart and is limited to fewer players, sources said.
According to the vast majority of respondents, the imbalance between supply and demand is the ultimate weight on the shoulders of the troubled dry bulk market. At this point the only factors that could tip the scales in the other direction would be those that would substantially cut the supply of tonnage or drastically improve the volume of cargoes.
By MarEx 2015-08-20 19:24:29
The Indonesian government has promised tax cuts to investors involved in developing the country’s untapped renewable energy potential.
The announcement was made on Wednesday by Energy and Mineral Resources Minister Sudirman Said, reports The Jakarta Post.
“We need regulations that give more opportunities for investment, such as the elimination of import taxes for capital goods used for developing new and renewable energy,” said Sudirman.
The new power is expected to come from geothermal power plants, solar photovoltaic, wind energy, biomass, mini or micro-hydro plants and ocean energy.
In June, the minister announced that he would specifically encourage the use of energy generated from the sea, a program that suited the government’s marine centered development policy. Some trial projects have already been undertaken, for example, a 10 kilowatt system in East Nusa Tenggara. A current power trial is anticipated later this year.
In its long-term energy strategy, the Indonesian government projects that renewable energy will account for at least 23 percent of the nation’s total energy consumption by 2025.
By MarEx 2015-08-20 17:27:55
The Petroleum Safety Authority of Norway has completed its investigation into two incidents which occurred on the Eldfisk complex on August 6-8, 2014, and written a “please explain” letter to ConocoPhillips.
The highest emergency shutdown level (yellow ESD – abandon platform) was initiated on the Eldfisk complex and Embla on the morning of August 6. This caused total loss of power and all systems shut down on the Eldfisk A, Eldfisk FTP and Embla installations, while Eldfisk E lost main power.
The ESD was unplanned. Its direct cause was the technical failure of an electronic component combined with a design error.
When restarting production after the ESD, a blowdown valve remained in the open position. It should have been reset to the closed position as part of the start-up procedure. That caused produced oil to flow into the flare system, on into the drain system and from there to the sea.
At dawn on August 7, oil was observed on the sea. Production was not shut down until 13.30 on August 7, since the size of the oil slick was increasing. The oil spill is estimated to have been in the order of 50-70 cubic meters.
The PSA’s investigation of the incident has identified several breaches of the regulations of a technical and operational character. Some of the technical nonconformities relate to Eldfisk FTP’s condition at the time of the incident.
Eleven non-conformities were identified by the investigation. These relate to:
• risk management during start-up of production after the emergency shutdown
• off-duty periods
• safety clearance when restarting production
• robustness against single errors and faults in safety systems
• verification of design requirements for the safety systems before start-up and
• lack of independence between control and shutdown functions for level measurement
• barrier management, risk assessments and analyses in connection with modifications
• updating of documentation in connection with modifications
• consequence classification of systems and equipment
• maintenance program for the drain system.
Two improvement points were also identified:
• performance requirements for emergency response
• training and drills.
The facility has subsequently been shut down and now functions primarily as a bridge support.
The PSA has written and asked the operator ConocoPhillips to describe how it intends to deal with the nonconformities. ConocoPhillips has until September 15 to respond.
The full investigation report is available here.
By MarEx 2015-08-20 16:50:03
Greek Prime Minister Alexis Tsipras has resigned and along with his government to seek a clear mandate for early elections on September 20.
In a televised speech, he told the nation that he felt he needed to allow the nation to vote on the financial bailout compromise with the EU.
“The present parliament cannot offer a government of majority or a national unity government,” Tsipras told Pavlopoulos during a meeting on Thursday night.
Government sources cited by the official news agency ANA said he had proposed elections on September 20. The resignation comes after a divide within the governing left-wing party over the terms of the country’s latest bailout.
In recent parliamentary votes, a number of Syriza’s 149 lawmakers have withheld their support for laws pushed by Mr. Tsipras’s government to secure a new bailout from Europe.
In an Aug. 14 vote to approve Greece’s latest loan package, worth €86 billion over three years, 32 Syriza deputies voted no while another 11 abstained. The package passed, thanks to support from opposition parties.
Energy Minister Panos Skourletis said Thursday that the government should go for elections as early as possible. “The political landscape must clear up. We need to know whether the government has or does not have a majority.”
By MarEx 2015-08-20 15:05:42
Portuguese Navy officials arrested a crewman aboard the Liberian-flagged M/V Celine after receiving reports that the mariner brandished an axe and threatened to set fire to the wood pulp the vessel was transporting to North Africa’s Ceuta port.
The Special Forces unit received distress signals from the 4,757 dwt cargo ship about 50 nautical miles west of Setubal. Officials are not sure what angered the mariner but he had a falling out with his crewmembers early in the voyage. The crewmembers took refuge in the ship’s bridge while awaiting rescue.
The Celine was built in 2011 and is owned by Turkey’s Vento Deniz Isletmeleri. The ship owner has decided not to press charges and the mariner is being repatriated to Turkey.
By MarEx 2015-08-20 14:52:04
Maritime piracy has experienced a resurgence recently, and the U.S. Navy has developed a method of identifying pirate ships before they strike. The Navy Research Laboratory’s (NRL) new model combines weather and wave analysis with maritime piracy behavior profiles of a specific region to predict when commercial vessels are most at risk.
The profiles are based on the type of vessels typically used by regional pirates, their attack speed and the speed in which they return to their hideouts. Pirates primarily use small, fast watercrafts that are highly vulnerable to high winds and rough seas. The system also analyzes wind and wave data to determine the conditions in which vessels are most susceptible to attack.
The pirate model predicts the track of pirate attacks as a function of time under the impact of environmental constraints. The NRL states pirates typically attack in areas with higher shipping density and when seas are relatively calm. Wind is also a deterrent in the frequency of attacks. Pirates generally attack ships when they are vulnerable and the weather conditions are favorable.
The U.S. Navy states piracy costs the U.S. maritime industry about $16 billion annually. The NRL report models could be particularly vital in slowing Southeast Asian piracy. Piracy in the region is reaching all-time highs as oil demand and the thriving black markets fuel attacks.
In July, Regional Cooperation Agreement on Combating Piracy and Armed Robbery against Ships in Asia (ReCAAP) said incidents of piracy and armed robbery had risen 18 percent in the first half of 2015 when compared to the same time period in 2014.
Click here to read the NRL’s full report.