Seacurus Daily: Top Ten Maritime News Stories 04/05/2017
1. ICS Annual Report Released
The International Chamber of Shipping (ICS) has launched its latest Annual Review, ahead of the ICS Annual General Meeting in Istanbul next week. The ICS Annual Review 2017 can be accessed free of charge via the ICS website. Providing an insiderâs view of the key issues affecting shipping, the ICS Annual Review provides a unique insight into the global shipping industry and the complex legislative and economic landscape currently faced by ship operators. The ICS Annual Review explores the challenges presented by the need to reduce CO2 emissions for the Paris Agreement on climate change; the worldwide entry into force of the IMO Ballast Water Management Convention in September 2017; and the implementation in 2020 of the global 0.5% sulphur in fuel cap, each which will have profound implications for the economics of shipping.
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2. Maersk Buy Approved
Maerskâs proposed acquisition of Hamburg SĂŒd, first announced on 1 December 2016, has been approved by both companiesâ boards. In a statement released on 28 April 2017, Maersk said that it will pay âŹ3.7 Bn in cash to acquire Hamburg SĂŒd from the Oetker Group on a debt-free basis, in relation to the sale and purchase agreement signed on 14 March. The acquisition is subject to regulatory approvals and is expected to close before the end of 2017. The price paid by Maersk for Hamburg SĂŒd (about $4.0 Bn in enterprise value) is lower than the valuation of UASC by Hapag-Lloyd (worth about $4.8 Bn in a non-cash business combination agreement expected to be completed by the end of May 2017) and the price paid by CMA CGM for NOL/APL ($2.46 Bn cash offer with $2.70 Bn of net debt that was completed in June 2016).
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3. Nations Pressing On Emissions
A coalition of Pacific Island and European countries have agreed to work together to ensure the UNâs International Maritime Organization delivers an ambitious climate deal for shipping. Ministers meeting in Tonga last week formally endorsed the work of a âHigh Ambition Coalition for shippingâ ahead of IMO negotiations in London. The group â which includes the Marshall Islands, Tuvalu, Tonga, Germany, France and Denmark â intends to ensure IMO provides its contribution of guarding temperatures to well below 2 degrees and aiming for 1.5 degrees Celsius. The Republic of the Marshall Islands (RMI) and Solomon Islands said an overall target for shippingâs emission reductions be consistent with a âfair shareâ of the global burden of reductions necessary to achieve a target of no more than 1.5 degree Celsius temperature increase.
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4. Trump Tanker Bounce
President Trump is proving good for tankers, delegates at the Maritime CEO Forum in Singapore were told. The event, held at Singaporeâs iconic Fullerton Hotel, gathered a stellar line up of panellists and attendees. While quick to distance themselves from the US leader politically panellists at the tanker session all maintained that Trumpâs first 100 days in office had shown clearly he was pro-energy. Pipeline approvals were cited as was the make up of his cabinet with a number of energy figures holding senior positions, most notably Rex Tillerson, formerly the boss of ExxonMobil, who now serves as secretary of state. In terms of the markets Frans van de Bospoort from DVB Bank set the scene, saying he could see crude tanker rates heading north this year by 10 to 20%, while product and chemical tankers will remain flat and under pressure.
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5. Oil Majors Bounce Back
The oil industry’s fiscal recovery is progressing faster than many expected: on Tuesday, BP announced that its profit for the first quarter rose to $1.5 billion, about 20 percent above analysts’ expectations and almost three times its earnings in the same period last year. Brent crude futures began to fall in late 2014 and bottomed out below $30 per barrel last January, hammering an industry that had calibrated its investment strategy towards the steady $100-per-barrel prices of previous years. The market gradually recovered over the course of 2016, and in recent months oil has traded within the range of $50-55 per barrel. While this level is below BP’s long-term target â it says that it needs $60 oil to sustain its current E&P program â it is more than enough to boost profitability for the oil majors.
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6. Sewol Committee Decided
The South Korean government has decided on the makeup and duties of the committee that will investigate the cause of the 2014 Sewol ferry disaster that killed over 300 people, mostly school children. The 53-member committee will be led by a minister-level chairman and will include officials from the maritime, interior, education and personnel management ministries, along with the National Police Agency and the Korea Communications Commission. There will be three investigative groups, reports Yonhap news agency. The first will collect and analyze evidence from the raised ferry to determine the cause of sinking. The second will handle the search for the nine people still missing, and the third will examine the potential for preserving the wreck. Members of this committee will talk with the victims’ families before releasing findings.
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7. Talking Ballast Approval
Latest developments on the entry into force of the Ballast Water Management (BWM) Convention took centre stage at the 8th International Conference on Ballast Water Management (24-25 April) in Singapore. IMO Secretary-General Emeritus, Koji Sekimizu, and Chief Technical Advisor of the GEF-UNDP-IMO GloBallast Partnerships Programme, Jose Matheickal, delivered keynote addresses at the event. Among other key issues, participants discussed the revised guidelines for the approval of Ballast Water Management Systems (G8), challenges facing Port State Control with regards to Compliance Monitoring and Enforcement (CME) and the timeline for installation of BWM systems. The conference also looked at latest technological developments in the field of ballast water treatment and monitoring systems.
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8. Alliance Risks for Panama
The formation of new container shipping alliances and their new mix of vessel sharing agreements could have either positive or negative impact on the number of vessel transits through the Panama Canal, though signs are pointing more toward the positive, according to Jorge Quijano, ceo of Panama Canal Authority. Quijano admitted that there are still uncertainties for transit activities at the canal since the start of operation in April 2017 of the three new carrier alliances â 2M, Ocean Alliance and THE Alliance, housing all of the worldâs leading carriers. âThe forming of the new alliances means better utilisation of hardware so the lines will not have surplus capacity â this becomes a problem for us as we would rather have many more companies competing because they will all be using the canal competing against each other,â Quijano said.
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9. Explosion Survivors Airlifted
The two surviving crewmembers of the bulk carrier Tamar explosion were medevaced at approximately 4:30 a.m. on Wednesday by a Portuguese aircrew. The aircrew arrived in Terceira Island, Azores, at about 7 am, and a Portuguese Air Force jet will bring the injured men to Lisbon, Portugal, for medical treatment. Three New York Air National Guardâs 106th Rescue Wing pararescuers accompanied them on the flight to continue the medical care they had been providing on board the vessel. The captain of the Marshall Islands-flagged 623-foot bulk carrier Tamar contacted watchstanders at the U.S. Coast Guard command center reporting an explosion in the shipâs forward storeroom on Monday. The explosion has left two crew members dead and two others suffering massive burns.
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10. LNG Bunkering Demo
A bunkering demonstration transferring liquefied natural gas (LNG) to a ship was carried out on Tuesday (May 2) â the first time the natural gas has been supplied to a ship from a port in Southeast Asia. The bunkering process involved the transfer of the gas from a truck to a vessel alongside Jurong Portâs berths. The demonstration was carried out by Pavilion Energy, one of the two companies licensed as LNG bunker suppliers in Singapore. âChanges in the global gas market have created exciting opportunities in LNG trading and bunkering, and Singapore offers several advantages for companies seeking to grow their presence in these areas,â said Senior Minister of State for Trade and Industry Koh Poh Koon,. Plans are in place to develop Singapore into an LNG bunkering and trading hub, and to be LNG-bunker ready.
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Daily news feed from Seacurus Ltd â providers of MLC crew insurance solutions www.seacurus.com
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S Jones
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