Daily Briefing September 19 2019
Free to read: Insurers investigate scrubber risk and expect 2020 engine damage claims| Owners want a level playing field come 2020 | Oil supply is fine says IEA, but security is a concern | Market outlooks on capes, containers and VLGCs
Good morning. Here’s our quick view of everything you need to know today.
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What to watch | Analysis | Markets | In other news
What to watch
Marine insurers are investigating at least two separate incidents involving scrubbers, one of which has been described as “catastrophic”, amid growing concern regarding additional risk associated with exhaust gas cleaning systems.
Untested but 2020-compliant lower-sulphur marine fuel oil with the capacity to damage ship engines will be introduced, boosting hull and machinery claims, the IUMI conference in Toronto has been warned.
A coalition of shipowner representative bodies has urged international governments to avoid any backtracking and ensure consistent global enforcement of the new global marine fuel sulphur cap when they enter into force on January 1, 2020.
Cargo insurance rates remain unsustainably low, despite premium growth last year and anecdotal and research evidence of hardening rates in the year to date.
Efforts to decarbonise shipping can only be achieved through the development of viable alternative methods of propulsion. But to achieve that will require an internationally coordinated approach, argues the World Shipping Council, which represents the world’s leading container lines.
China's Shandong Shipping Co and ICBC Financial Leasing have worked together on a series of dry bulker and tanker newbuilding projects worth $600m, backed by long-term charters.
Analysis
Avoiding the pitfalls of digitalisation: Shipping is finally catching up with the rest of the world when it comes to digitalisation. But while the benefits are immense, companies should be focused on the processes rather than the technology. A workforce is needed on the ground to check everything, even though it is digital. Otherwise unreliable data entry will become commonplace, argues our containers kingpin James Baker.
Markets
There’s no need for emergency oil supply, but security does need a re-think, according to the International Energy Agency. With almost 4.5bn barrels of oil in reserves, the countries of the IEA have enough oil stored to meet more than a month-and-a-half of global demand. But IEA leader Fatih Bitrol does not believe deploying any reserves is necessary at the moment. Instead, he warned policymakers to be vigilant about security in oil production and supply.
Freight markets for very large gas carriers are firming up in both the Middle East and the US Gulf amid supply disruption worries following attacks on Saudi Arabian oil facilities.
The capesize market should remain profitable for the rest of the year, bar any iron ore cargo volume issues arising out of Brazil and Australia, shipping association BIMCO said.
Slowing intra-Asia trade points to a difficult remainder of the year for the wider container shipping sector, according to a new report from BIMCO.
In other news
After 15 years, Sergey Frank seems set to leave the position of chief executive at Sovcomflot, to be succeeded by its executive vice-president.
Orient Overseas International Ltd, now part of China Cosco Shipping Corp, has named Wang Haimin as its new chief executive. The official announcement has verified an earlier report by Lloyd’s List in August about the management reshuffle within the state conglomerate’s liner shipping business.
Robbers armed with guns and knives boarded a combined chemical and oil tanker off Guinea, held the crew, looted cabins and stole property.
Dryships has posted a loss in what may be the company’s last quarterly earnings report on the Nasdaq before being taken private by founder and chief executive George Economou.
Growing Indonesian bulker operator Pelita Samudera Shipping has completed a cash and shares deal to acquire a handysize dry bulk carrier from Singapore’s IMC for $7.52m.
Woodside Energy has signed a 13-year liquefied natural gas supply deal with Uniper that will put it in good stead to move ahead with expansion of the second train at its Pluto liquefied natural gas facility in Western Australia.
Peel Ports’ expanded Twelve Quay terminal in Birkenhead in the northwest of the UK is due to open early next year, following a £17m ($21.2m) investment.