Daily Briefing March 27 2020
Free to read: Dry bulk and containerships lead ‘flood’ of scrubber cancellations | Tanker freight futures spike on floating storage sentiment | Paris MOU relaxes rules as UK suspends port state control | Health crisis exposes need for LNG floating storage
Good morning. Here’s our quick view of everything you need to know today.
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What to watch | Analysis | Opinion | Markets | In other news
What to watch
Dry bulk and containership owners are among the first to scrap plans to retrofit or install scrubbers, according to Alphatanker, which forecasts a “flood of cancellations” as cost-cutting and the erosion of marine fuel oil premiums render the sulphur abatement technology redundant.
New signals have emerged that oil traders anticipate shore-based crude storage to quickly fill up as the value of tanker forward freight agreement contracts for the next six months soared 22% overnight.
The Paris Memorandum of Understanding on Port State Control has responded to the coronavirus pandemic by temporarily relaxing rules on vessel and seafarer certification, handing member states discretion on whether to conduct hitherto obligatory inspections.
Analysis
Liquefied biomethane and liquefied synthetic methane have the potential to be competitive zero-carbon fuels, but carbon pricing policies and greater renewable electricity supply will be necessary, according to a new study.
Opinion
The coronavirus pandemic, in triggering a collapse in energy demand and prices, has made apparent one flaw in today’s liquefied natural gas market, writes Hwee Hwee Tan.
Markets
Shipping has underestimated the threat of coronavirus, with greater impact soon to be felt by the industry, according Cosco Shipping Ports chairman Feng Boming.
J. Lauritzen, a Danish owner and operator in the dry bulk and gas carrier sectors, said it was focusing on short-term trading activities as losses in 2019 mounted.
Maersk, the world’s largest container line, is beginning to prepare itself for a slowdown in demand as the coronavirus pandemic hits global economic activity.
Wallenius Wilhelmsen says it will lay off about 2,500 workers in the US and Mexico because of the disruption caused by the coronavirus outbreak.
Maersk Product Tankers said its posted outlook for 2020 is “uncertain”, despite recovering from a loss last year amid better market rates, vessel sales and lower running costs.
In other news
The extension of the European Union’s Consortia Block Exemption Regulation will probably have “detrimental effects” on the EU’s logistics and supply chains, several industry bodies have warned the European Commission.
CMA CGM has completed the first transaction in the sale of eight terminals to its Terminal Link joint venture, as the French carrier seeks to shore up its finances and reduce its debts in the face of the coronavirus pandemic.
Maersk has said several crew members are infected with coronavirus on its 9,000 teu Gjertrud Maersk. This is thought to be the first time that seafarers working on a containership have tested positive, although there have been many infections on cruiseships.
A pirate attack on a Greek-owned bulk carrier off the west coast of Africa has been thwarted.
The British International Freight Association has joined calls for an extension beyond the end of the year to the UK’s Brexit “transition period” because of the difficulties posed by the coronavirus pandemic.
Three US carriers have jointly applied to the Federal Maritime Commission for permission to implement an emergency co-operative working agreement that would partially exempt them from anti-trust regulations during the coronavirus outbreak.
Most of the ports in India have declared force majeure as the country begins a three-week lockdown to prevent the spread of the coronavirus pandemic.
Finnish technology company Wärtsilä has launched engine trials for ammonia, as part of an effort to develop supply chain services for the zero-carbon fuel.
The Hong Kong Maritime Museum has shut its public galleries and switched to online mode amid worsening coronavirus infection conditions in the city, a major Asian shipping hub.
Class societies are predicting greater uptake of remote vessel inspections as technology improves, costs fall and the coronavirus increases the need for remote processes.