Seacurus Daily: Top Ten Maritime News Stories 02/10/2018
1. VLCC Rates Soar
VLCC rates are finally showing signs of life with many analysts now saying the market has bottomed out and is poised for growth. Platts is reporting that freight rates for VLCCs making long-haul voyages east out of the US Gulf Coast and Caribbean leapt yesterday, climbing by $1m in just two trading sessions as tonnage availability becomes scarce and Asian buyers seek cheaper US crude cargoes. Mighty Unipec from China, the world’s top tanker charterer, has reentered the US crude buying market after a three-month hiatus helping boost rates.
2. Bolivia Blocked from Sea
The International Court of Justice (ICJ) has ruled against Bolivia in its dispute with neighbouring Chile over access to the Pacific Ocean – a feud dating back to the late 19th Century. Landlocked Bolivia lost access to the sea in 1884 after a war with Chile and has tried to regain it ever since. The court said Chile was not obliged to negotiate granting Bolivia access. The ruling, which comes after five years of deliberations, is final and binding. Despite the final nature of the ruling, Bolivian President Evo Morales said “Bolivia will never give up”.
3. New US Trade Deal
The United States has reached an agreement with Canada on a revision of the North American Free Trade Agreement (NAFTA), ending concerns over the potential for American withdrawal. Last year, U.S. President Donald Trump threatened to leave the treaty altogether, and in August he warned that he would exclude Canada if it would not agree to his administration’s terms. The administration negotiated new terms with Mexico separately in August, and the final treaty contains the results of both sets of talks. The new version of NAFTA will now be called the U.S.-Mexico-Canada Agreement (USMCA).
4. Fears of Fuel Non Compliance
The Organization of the Petroleum Exporting Countries (OPEC) expects a significant level of non-compliance with the 2020 sulphur cap, especially in the early implementation years. In its recently released Reference Case, the organization assumed that about 70 percent of shipowners will comply with the new rules, i.e. have scrubbers or switch to low sulphur bunkers or other compliant fuels. However, despite the IMO’s efforts to enforce the regulation, OPEC expects that there will be up to 30% of noncompliance.
5. Terrible Migrant Death Toll
According to the UN, the rate of death or disappearance on the Central Mediterranean maritime migration route rose to nearly one in five last month, the highest level since accurate recordkeeping began. In September, about eight people died or went missing on the route daily. Researchers at Italian think tank ISPI believe that the sudden spike is linked to the policies of Italy’s anti-immigration interior minister, Matteo Salvini. Salvini has blocked most vessels with rescued migrants aboard from calling at Italian ports, thereby cutting down arrivals by half relative to the levels seen under his predecessor’s administration.
6. Canal Cooking on Gas
The Panama Canal Authority says it has reached a new milestone with the successful transit of four liquefied natural gas (LNG) ships with beams of up to 160 feet (49 meters) in a single day through the Neopanamax Locks. With this milestone, the Panama Canal breaks the record set on April 17, 2018, when three LNG vessels transited through the waterway on the same day. The new record was achieved today, October 1, 2018, with the northbound transit of Ribera del Duero Knutsen with a cargo capacity of 173,000 m3 and Maran Gas Pericles with cargo capacity of 174,000 m3.
7. Owners Will Not Be Ready
The International Maritime Organization’s low-sulfur regulation for shipping fuel is shaping up to become one of the biggest shocks to ripple through the oil complex, one which could cause price spikes, change in trade flows and hit every sector that consumes petroleum fuels or uses seaborne trade. The disruptive influence of the marine regulation will be far reaching, much beyond the shipping sector, as industries and entire economies get caught up in a wave of unintended consequences, industry executives said at the S&P Global Platts Asia Pacific Petroleum Conference in Singapore this week.
8. Do Not Wait for Ballast
Japanese classification society ClassNK is advising owners to fit ballast water management systems (BWMS) well ahead of time as it sees a large spike in retrofit numbers in 2022. For be compliant with the IMO’s Ballast Water Management Convention for existing vessels shipowners have to install a BWMS at the vessel’s next special survey after 8 September 2019, essentially giving a five year window for retrofits between September 2019 and September 2024 depending on when the special survey is due.
9. Sanctions Tanker Detained
On Saturday, port state authorities in Busan detained the tanker Sevastopol, which has been blacklisted by the U.S. Treasury Department for allegedly violating sanctions on North Korea. In August, the Treasury’s Office of Foreign Asset Control (OFAC) added Gudzon Shipping Co. of Vladivostok, Russia, to the list of entities that are suspected of violating sanctions on North Korea. In particular, the Gudzon-owned tanker Patriot allegedly violated the UN Security Council ban on ship-to-ship petroleum transfers to North Korean tankers.
10. Yards Getting Smart
The South Korean government is planning to build smart shipyards equipped with artificial intelligence (AI) technology to boost the cost competitiveness of the nation’s small to mid-size shipbuilders. BusinessKorea reports that the government will begin a feasibility study this year. Around $360 million will be spent on the Korean Smart Shipyard (K-Yard) project which aims to first develop a smart shipyard simulation model and set up a virtual reality-based production platform to track production flow using the internet of things. Two shipyards are expected to take part in testing between 2020 and 2025.
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