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What to watch

Can a bipolar tanker market find equilibrium in 2021? Read the first of our exclusive annual Outlook articles and find out. For the first time ever, the future of tanker shipping in 2021 appears to lie in the hands of big pharma, argues out Markets Editor Michelle Wiese Bockmann. The old shipping adage that cargo is king applies more than ever for 2021. A rising east-west divide, post-Trump geopolitical policies, and post-pandemic consumer behaviour are recasting tanker market dynamics over the next 12 months.

Publicly, the UK shipping establishment is not commenting on leaked strategy documents aiming to turn London into a post-Brexit maritime rival to Singapore. Privately, there is flurry of red-faced back-pedalling as officials point out that the confidential plans drawn up by the UK Ship Register were more proposal than policy and yet to get anywhere near ministerial consideration.

Analysis

Deutsche Bank’s industry lending has fallen sharply since the shipping downturn and 18,000 jobs were axed at the bank, but it’s still in the game with a leaner and fitter book, argues its head of transport. “We really didn’t want to be one of 25 lenders in a syndicate and not really be meaningful. A view was taken that our capital could be better used in a more strategic manner,” insists Richard Moody.

After raising $925m within eight months, Blue Ocean Funds is closing in on a record year and preparing for the launch of a new environmental strategy that will target greener ships and projects. The $2.1bn alternative finance fund that belongs to asset manager EnTrust Global has already committed over $600m in shipping deals in 2020 to date.

Opinion

We should all be concerned about seafarer mental health. Traditional attitudes to dealing with seafarer stress must be reassessed in light of significant changes to the industry. Failure to do so could have serious implications for recruitment and retention, argues our chief correspondent Richard Clayton.

Markets

The Weekly Briefing: A shortage of equipment is hampering the box shipping sector as trade volumes continue to surge post-lockdown and pre-Christmas. Meanwhile, energy agencies again downgrade crude demand estimates, casting an ever-longer shadow on the tanker market for 2021.

The surge in demand for containerised freight has seen every available ship put into service. A shortage of tonnage is pushing charter rates to once-in-a-decade levels, rising in parallel with freight rates.

LNG prices for the winter on the Asia spot market soared to two-year high, riding on the expectation of a colder winter in China and South Korea.

In other news

Singapore-based shipping conglomerate BW Group has acquired a 39.1% stake in Navigator Holdings held by WL Ross & Co in a $197m deal, paying $9 per share.

Eight crew have been kidnapped as Gulf of Guinea pirates strike for a second consecutive day, boarding 11,990 dwt Cameroon-flagged cargo vessel Stevia. So far 27 ships have been boarded and 130 crew kidnapped in waters off West Africa.

Russian mining company Elgaugol has signed a strategic co-operation agreement with Fujian Guohang Ocean Shipping in an effort to boost coal exports to China, according to a company release.

A surge in the numbers of boxships on the transpacific crossing is boosting throughput at California’s container ports, with double-digit increases seen in Los Angeles and Long Beach for the month of November.

Shell has signed charter agreements with three owners for four newbuilding liquefied natural gas carriers to be built at South Korean yards.

Norden is continuing to shift its exposure from tankers to dry bulk. The Danish owner and operator sold two tankers in recent weeks and bought two secondhand bulk carriers as it sees more favourable market conditions in dry bulk next year.

TOTE Services and Philly Shipyard have held a steel-cutting ceremony for the new National Security Multi-Mission Vessel, a ship that has been under development for a decade to use in training and humanitarian efforts.