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Daily Briefing October 14 2019

Free to read: VLCC spot charter breaks key level on market disruption | Supply tightness prompts upgrade on forecast LNG shipping rates | The Lloyd’s List Podcast: Containers, shipmanagement and the casualty code | Iran probes ‘cowardly attack’ on tanker

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


Spot charter contacts for very large crude carriers broke $300,000 as the industry digested the fallout from the US focusing its spotlight on sanctions on oil and from the latest security incident in the Middle East.

Platts Analytics has lifted its projections on LNG shipping day rates by about $13,300 for the next three months, citing tight supply arising from high floating storage in Europe and potentially slow-steaming of ships delivering cargoes to Asia.

Shippers that have to build their 2020 box shipping budgets are probably scratching their heads over uncertainties about fuel prices.

Iran said at the weekend it will respond to the “cowardly attack” in the Red Sea on Friday when one of its tankers, Sabiti, was hit by two missiles off Saudi Arabia, Iranian media reported. The official news agency IRNA quoted government spokesman Ali Rabei as saying: “Iran is avoiding haste, carefully examining what has happened and probing facts.”


Analysis


Industry regulators will have to decide whether unmanned vessels can properly be regarded as ships within the meaning of current international conventions, and if so, how to adapt those conventions to a new reality, a heavyweight industry figure has argued.

As supply continues to outstrip demand and spot rates trend below fixed contract rate levels, flat ocean freight demand is attributed to front-loading earlier in the season leading to higher inventory levels as well as less demand in the market and some US sourcing shifting to Southeast Asia.


Opinion


The Lloyd’s List Podcast: This week our containers kingpins James Baker and Linton Nightingale discuss the peak season that never was and why flexibility trumps size; our chief correspondent Richard Clayton offers up the key lessons he’s learned from talking to the leading shipmanagment executives; and Nidaa Bakhsh explains why governments are considering their options when it comes to casualty reporting.

Vincent Power, who takes over as chairman of the European Maritime Law Organisation later this month, says there will be no escape from European law for UK businesses involved in international trade, and sees Emlo as a potential vital source of legal expertise in the maritime sector after Britain leaves the EU.


Markets


Conventional reefer ships are gradually being phased out as the perishables market increasingly leans towards the cheaper reefer box alternative, but will the sulphur cap accelerate this trend and seal their fate? Some believe the end is nigh, while others in the industry suggest there may still be life for this traditional form of reefer shipping yet.

Muted growth in the short to medium term for the seaborne transport of perishable goods will have little impact on reefer rates. The continued modal shift from conventional reefers to containers, combined with an equipment shortage, will support significant rate rises in 2020.

Despite being at the vanguard of container technology, the reefer industry is accused of resting on its laurels. Maersk Line’s head of global reefer solutions says it is still lagging behind in terms of what existing technology can bring to the table.


In other news


China’s demand for imported cement is rising as its domestic industry puts on the brakes in a bid to reduce pollution. The imports are mainly from Vietnam, with some shipments from the United Arab Emirates, helping to support the smaller bulker sizes, according to brokers Braemar.

The first of 10 liquefaction units at the $2bn Elba Liquefaction Facility at Elba Island near Savannah, Georgia, is in service, said Elba Liquefaction Co LLC.

The UK government has signed contracts with Brittany Ferries, DFDS, P&O ferries and Stena Line worth as much as £86m ($109m), to ensure medicines will arrive uninterrupted into the country after it leaves the European Union.

Holyhead, the UK’s second-biggest ro-ro port, is ‘absolutely not’ ready for a WTO Brexit and lacks the infrastructure needed to avoid a backlog of lorries to the key UK-Ireland road freight crossing, according to one of the Welsh port’s freight users. However, Stena Line Ports, which manages the port of Holyhead, says it has ‘taken all prudent steps’ to prepare for a WTO Brexit.

Italy’s maritime economy lacks the central oversight and organisation that benefit other European governments.

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