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Daily Briefing March 12 2020

Free to read: Daily tanker earnings reach $300,000  | IMO planning postponement of latest environmental talks | Scrubber economics weaken | OOCL confirms super-sized newbuilds  

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


Daily tanker earnings reach $300,000 as traders add to Saudi-led tonnage frenzy. Oil traders and Asian refiners have chartered a further 25 VLCCs in past 48 hours, accelerating the upward rates trajectory.

The International Maritime Organization is set to postpone two weeks of environmental negotiations set to begin in late March because of the coronavirus outbreak, Lloyd’s List understands. This delay will potentially complicate the introduction of new carbon-cutting measures for ships.

US shipping showcase CMA 2020 postponed. Coronavirus concerns push back North America’s largest annual maritime conference to the end of June as industry events adapt to public health guidance.

A perfect storm brewing in the oil markets is threatening to undo the financial models used by many shipowners to prove the economic benefits of scrubber investments.

Orient Overseas International Ltd, now part of China Cosco Shipping, has confirmed its long-awaited super-sized newbuilding orders. The carrier has agreed to build five 23,000 teu containerships worth $778.4m, or $155.7m each. The vessels will be built at Cosco Shipping’s joint venture yards and will reportedly only burn traditional fuels.


Analysis


The Sino-US trade war has adversely impacted ports along the Pacific Coast, heavily dependent — as most of them are — on trade with China along the historic transpacific route. Figures from the US Census Department underline a shift in the pattern of trade as some supply chains have moved out of China and into Southeast Asia, Vietnam in particular.

Hutchison Ports’ plans to build a new 700,000 teu capacity deepwater terminal in Quebec could see the start of large ship services to Canada’s east coast, but the port will have to compete with Montreal for services aiming to target the lucrative US Midwest market.


Opinion


Bureau Veritas’ Remote Survey Centre opens at a time when industry resilience demands new ways of doing business. Perhaps the global virus outbreak will bring greater comfort with remote working, writes Richard Clayton.


Markets


Hopes that capesize bulker rates would gain some momentum following the steep collapse in oil prices have not been realised so far. Brokers blame lack of demand in the Pacific for the market gloom, with the sector also facing pressure from the coronavirus and seasonality.

Projects for the production of liquefied natural gas continue to ramp up in North America as investors ignore temporary price drops and focus more on long-term strategy in their pursuit of global market share.

San Pedro Bay ports of Los Angeles and Long Beach reported markedly lower throughput of container traffic in February, citing decreased manufacturing in Chinese factories due to extended closures caused by the coronavirus outbreak. But officials see a “surge” coming and are preparing for it.


In other news


After a very strong 2019, Danish product tanker owner Torm believes market dynamics will favour product tankers even more. But how would a drop in oil demand due to the coronavirus affect this outlook?

Royal Caribbean Cruise Lines and Norwegian Cruise Line Holdings have increased their credit facilities to boost liquidity as the coronavirus hits demand.

South Korean shipping firm Heung-A Shipping will undergo debt restructuring by key creditor Korea Development Bank after its board approved the scheme.

The recent Amalie Essberger decision still leaves “lingering uncertainty” over the correct procedures for demurrage time bar claims, according to an analysis from Watson Farley & William.

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