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What to watch

A tanker managed by Maersk Tankers aborted a ship-to-ship transfer with another vessel carrying sanctioned Iranian refined products after an alert from a non-government organisation, raising questions over the Danish company’s integrity and robustness of risk compliance measures.

In the latest of our markets outlook series for 2021, attention turns to the finance and container sectors. For the former, the underlying trend is the rise of alternative finance. Ship finance has ceased being a matter of banks or public markets and experts say there are potential sources of funding for most shipping companies out there, in spite of the pandemic and other challenges. Meanwhile, in the case of the buoyant box sector, lines will be looking to maintain its newfound capacity discipline to weather the uncertainties of next year.

Analysis

2021 Outlook

LNG: Next year will see fewer cargo cancellations as existing LNG plants ramp up output, boosting LNG fleet utilisation. Bright spots for the sector emerged in 2020, as economies made use of low prices to expand imports. Asia LNG trade in particular showed resilience, rebounding in the second half of the year, with China leading the rest of the pack.

LPG: Strong market fundamentals are expected to present the segment with healthy demand in the coming year, while tight fleet supply, driven by a heavy drydocking maintenance schedule for older vessels, will keep freight rates buoyant.

Markets

Backed by a widening inter-basin arbitrage window, liquefied natural gas trade between the US and Asia is on track to set a new record this winter, bolstering shipping tonne-miles and spot charter rates.

Skuld has recorded a technical deficit of $46.2m at the nine-month stage of the P&I year, which runs from the annual February 20 renewal date, sending its combined ratio to 118%, compared with 116% for the same period last year.

In other news

Chinese refiner Rongsheng Petrochemical is floating a tender to charter in up to 10 very large crude carriers, raising questions about its own long-touted ordering appetite.

A network of four product tankers owned by an anonymous Dubai-based company is shipping sanctioned refined products to offshore Malaysian waters from Iran for onward transfer to other vessels likely unaware of the cargo’s true origin.

The US Treasury Department’s Office of Foreign Assets Control has sanctioned four companies related to the maritime industry for facilitating the export of Iranian petrochemical products by Triliance Petrochemical Co, a Hong Kong-based broker blacklisted earlier this year.

Seafarer and shipowner bodies have welcomed the International Labor Organization’s criticism of governments for their inadequate response to the crewing crisis brought on by the coronavirus pandemic.

No government inquiry is needed into congestion at British ports, despite delays in getting stock to retailers in time for Christmas and fears that food supplies could be disrupted by Brexit, industry voices have insisted.

The Signal Group has added an emissions estimation tool to its digital Signal Ocean Platform in another sign of the importance that the market is increasingly allotting to decarbonisation.

Liquefied natural gas is emerging as the only cost-effective alternative to marine fuel oils this decade, especially once carbon levies are introduced, according to a white paper produced by shipbroker EA Gibson in collaboration with Channoil Consulting.

Keppel Offshore & Marine has secured a newbuilding contract worth $600m from Dominion Energy for a wind turbine installation vessel targeted for work on projects along the US east coast.