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Daily Briefing February 20 2020

Free to read: P&I renewal round sees 7.5% ‘going rate’ fail to stick | Venezuela crude exports going ‘dark’ as US imposes sanctions on Rosneft | EU chiefs warned that green rules hinge on global co-operation | Korea vs Japan at the WTO — who will blink first?

Good morning. Here’s our quick view of everything you need to know today.

The Lloyd’s List Daily Briefing is brought to you by the Lloyd’s List News Desk.

What to watch   |   Analysis   |   Opinion   |   Markets   |   In other news




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What to watch


The 2020 renewal round has seen P&I clubs achieve firmer pricing for the first time in several years, but only by around 3% or so, rather than the 7.5% widely seen as the ‘going rate’ general increase last autumn, according to P&I brokers who spoke to Lloyd’s List. Meanwhile, the number of fleets changing hands ahead of the February 20 deadline appears limited, in marked contrast to the past, when speculation about which owners were ready to take their fleets elsewhere was a regular feature of the marine insurance world at this time of year.  

Drylog, Peter G Livanos’ principal dry bulk shipping vehicle, has acquired ED&F Man Shipping in a move that seems conceived to further its ability to source cargoes. For Mr Livanos, who has traditionally been low profile on the dry bulk sector, the move is the second headline-making acquisition in the space of two months

Venezuela is poised to further obfuscate crude exports after new US blocking sanctions were imposed yesterday on the trading arm of Russian oil company Rosneft, which charters as much as 80% of all tankers involved in these trades

A reefership and a handysize bulk carrier are the only vessels over 5,000 dwt tracked at the port of Tripoli since it was bombed Tuesday amid claims a Turkish ship had berthed carrying arms and ammunition. The attack saw Libya’s internationally recognised government withdrew from peace talks in Geneva

Europe’s biggest shipowners and ports associations have emphasised the need for a global approach to emissions regulation and for the EU to use its power in the international arena.


Analysis


Very low sulphur fuel oil is expected to make up 55% of Singapore’s bunker sales this year, down from a 70% lion share seen in January, as more marine gas oil or distillates enter the marine fuel stream in the coming months.

DNV GL’s maritime chief executive has rejected a report that suggested LNG fuel may worsen shipping’s climate impact, saying its conclusions were too short-term and focused on the wrong kind of vessels

Canada’s Prime Minister Justin Trudeau has come under criticism from the maritime community for his government’s failure to respond quickly enough to protests over a natural gas pipeline that are impeding the nation’s transport network.


Opinion


Japan is fed up with the scale of subsidies for South Korea’s rival shipbuilding sector. But action at the WTO may not offer it the best chance to win the case until the US changes its mind, argues our China Editor Cichen Shen.


Markets


Coronavirus-linked disruption to supply chains is feeding hedging interest in both the wet and dry markets. Tanker FFAs extend gains post-IMO 2020, expanding their share to 30% this month.

The dry bulk market is expected to stay in the doldrums in the coming weeks, weighed down by the coronavirus and persistent oversupply of tonnage. With the infectious disease clause being introduced, a number of fixtures have failed, leading to weak market sentiment.

Container carriers’ capacity on East-West main trades has swung sharply lower as virus-hit China is struggling to resume domestic production. A total of 33 sailings, or 46% of the scheduled departures, on the Asia-North Europe trade have been cancelled in the last four weeks, according to an Alphaliner survey.


In other news


Following last week’s UK government reshuffle, the new ministerial briefs have been assigned and Brexit Britain has a new shipping minister. Kelly Tolhurst will also have to pick up the aviation brief in addition to her maritime responsibilities, which notably include the introduction of up to 10 new freeports.

Regional and local standardisation may suit port operators but is of little use to their international customers. For collaboration to take off, ports need to settle on interoperable standards.

Navios Maritime Holdings has offered a window of optimism onto dry bulk market prospects as it confirmed the acquisition of two modern capesize bulk carriers.

Hapag-Lloyd’s stronger focus on more profitable trade lanes and active revenue management helped it raise average freight rates by 2.6% to $1,072 per teu in 2019 versus $1,044 per teu in the previous corresponding period, which in turn helped the German line to raise full-year revenue by 9% to €12.6bn ($13.6bn).

Dubai-based dry bulk outfit Tomini Shipping has gained a listing on the Norwegian over the counter market. The owner says it will continue to look for new investment and acquisition opportunities.

Performance Shipping has set its sights on becoming a dedicated aframax tanker owner.

The Port of Cork has said that its new container terminal, due to be opened this month, has been pushed back to the fourth quarter due to construction delays.

Correction: Nakilat position on LNG. On Tuesday we published a story relating to Nakilat's position on LNG. Due to an internal systems failure in our editing process, the story was inadvertently published before being fully edited. As a result, some of the views attributed to Nakilat were incorrectly published. We regret the error on our part

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