PUBLISHED OCT 18, 2021 7:19 PM BY THE MARITIME EXECUTIVE

Days after saying that it was preparing its 15MW wind turbine to begin certification testing in 2022, Veritas announced the turbines which are currently on track to be the industry’s largest have been designated for two of the US’s largest planned offshore wind farms. Empire Offshore Wind, a joint venture between Equinor and bp, has named Vestas as the preferred turbine supplier for the proposed 2.1 GW Empire Wind 1 and Empire Wind 2 offshore wind projects planned for offshore in New York. This is one of the largest preferred supplier agreements to be announced in the U.S. industry.

If the projects gain approval and proceed, Vestas will provide 138 V236-15.0 MW turbines for Empire Wind 1 and 2, located 15-30 miles off the coast of Long Island. With this project, New York, Equinor, bp, and Vestas together would take a leading role in the development of the offshore industry in the U.S. Combined, the two projects would play a significant role in New York’s goal of installing 9 GW by 2035 and contribute to the U.S.’s overall goal of 30 GW of offshore wind capacity installed by 2030.

“We are honored to partner with Equinor and bp as preferred supplier for the Empire wind projects and provide our V236-15.0 MW turbine to help New York achieve its ambitious offshore wind energy goals. To be part of a landmark project like Empire Wind 1 and 2 is a testament to the hard work of Vestas colleagues across the world dedicated to developing offshore technology capable of delivering, reliable, resilient, and sustainable wind energy to communities around the world,” said Laura Beane, President of Vestas North America.

These two projects are also viewed as a catalyst for developing New York State’s sustainable energy. To that end, the companies also announced agreements designed to establish the infrastructure to support these projects.

The tower sections for Empire Wind 1 and 2 are planned to be sourced from the Marmen/Welcon plant, which is being developed in Port of Albany. For staging of turbine components, Vestas reports it will utilize the upgraded port at South Brooklyn Marine Terminal, developing a local, New York-based, supply chain to provide the services in the staging, pre-assembly, and installation activities.

In addition, Vestas will deliver a comprehensive multi-year solution to service the wind farm when operational, with the goal to establish a New York-based service organization.

Last week, Veritas announced that it planned to install the first prototype of the 15 MW wind turbine at a test facility in Denmark during the second quarter of 2022. Testing is expected to begin in the fourth quarter of 2022. The V236-15 MW will stand over 900 feet with the ability to produce over 80 GWh per year. In July 2021, it was also pre-selected for a 900 MW wind farm planned for Germany.

Equinor and bp received their first award from New York State in 2019 for Empire Wind 1. At the beginning of this year, they were selected for what would become Empire 2 along with a second project further to the east known as Beacon 1. Combined the two projects represented one of the largest renewable energy procurements in the U.S. to date.

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https://www.maritime-executive.com/article/new-york-wind-farms-to-get-giant-15-mw-turbines

PUBLISHED OCT 18, 2021 6:55 PM BY THE MARITIME EXECUTIVE

The U.S. Navy is pushing back on Russian claims that the destroyer USS Chafee was ejected from the area of a recent Russian-Chinese joint naval exercise.

On Friday, Russia’s Ministry of Defense claimed that a Russian destroyer forced the Chafee to alter course after Chafee attempted to “violate the state border of the Russian Federation in the Peter the Great Bay.” When the Russian Navy challenged Chafee’s movements “in an area closed to navigation due to exercises with the use of artillery weapons,” the Chafee raised colors for aviation operations, according to the ministry. After a warning, the Russian destroyer Admiral Tributs approached Chafee to within 60 meters and successfully “stopped [her] attempt to violate the state border,” according to the ministry.

“After becoming convinced of the Russian warship’s resolve to prevent the violation of the state border, the guided missile destroyer Chafee reversed its course at 5:50 p.m.,” the ministry said in a statement.

In a response, the U.S. Navy asserted that the run-in occurred differently. USS Chafee was in international waters in the Sea of Japan, according to the Navy, and was preparing for flight ops when a Russian destroyer approached. No Russian military exercise notices were in effect at that time for the area, and Chafee “conducted operations in accordance with international law and custom,” the Navy said.

Though the Russian destroyer approached to within about 65 yards – a clear close-quarters situation – the Navy said that “the interaction was safe and professional.”

The incident occurred in the middle of a four-day joint exercise for Russian and Chinese naval forces. The exercise involved mine countermeasures; joint tactical maneuvering; artillery fire at mock targets, including a towed “surface combatant” target; and air defense operations.

In addition to the Admiral Tributs, the exercise involved the the large anti-submarine destroyer Admiral Panteleev; the corvettes Aldar Tsydenzhapov and Gromkiy; two minesweepers; and the improved Kilo-class sub Ust- Bolsheretsk. The PLA Navy was represented by the destroyers Kun Ming and Nan Chang; the corvettes Bin Zhou and Liu Zhou; and one diesel-electric submarine.

Previous run-ins with Russian forces

The destroyer USS John S. McCain had a similar run-in with Russian Navy forces in the Sea of Japan last year. When the McCain conducted a freedom of navigation operation (FONOP) near Peter the Great Bay on November 24, 2020, the Russian anti-submarine destroyer Admiral Vinogradov responded to the scene and warned McCain to depart “Russia’s territorial waters.” After the Vinogradov threatened to ram McCain and altered her course, McCain departed, the Russian Defense Ministry asserted.

The U.S. Navy denied this claim. “USS John S. McCain was not ‘expelled’ from any nation’s territory. McCain conducted this FONOP in accordance with international law and continued to conduct normal operations in international waters,” the service said in a response.

The Royal Navy destroyer HMS Defender had a similar encounter with Russian forces off Crimea in June 2021. Using a charted traffic separation scheme, Defender passed close by Russian-occupied Sebastopol during a transit between ports in the Black Sea. Her route prompted an angry response from the Russian Defense Ministry, which claimed that an Su-24M fighter dropped four bombs “on the course” of the vessel to force her to depart. The Royal Navy denied that any shots were fired or bombs were dropped nearby, except for a previously-scheduled Russian gunnery exercise some distance away.

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https://www.maritime-executive.com/article/russia-claims-to-have-chased-u-s-navy-destroyer-out-of-exercise-area

Well over $35 billion and several years would be saved by making Australia’s submarines in the US.

PUBLISHED OCT 18, 2021 9:20 PM BY THE STRATEGIST

[By James Kell]

The first of anything is expensive. Theodore Wright studied this in the 1930s and found a mathematical relationship between how many of a thing have been made and how much cheaper and faster production becomes. Wright’s Law states that for every doubling of production, the cost drops by a certain percentage determined in large part by how complex the production line is.

It’s hard to imagine a more complex production line than that for nuclear submarines. Look at Britain’s difficulties as it builds seven boats in its Astute-class nuclear-powered attack submarine (SSN) program.

Wright’s Law suggests that by the eighth and final nuclear submarine made in Australia—provided everything goes well—our production will be about half as efficient as the Americans who have already produced 19 out of a planned 66 Virginia-class nuclear submarines.

America’s shipyards currently produce 2.6 Virginia-class submarines each year, and some in Washington are lobbying for that to be increased. These American-designed and -built boats, bought in batches, are finished on time and on budget—two concepts that Wright’s Law doesn’t assume for the first dozen of anything so complex.

After a 17,500-man-year design investment, the sail-away cost of an American-made Virginia-class submarine currently stands at $4.8 billion. Generally, the total program cost (including things like support facilities in Australia) is 1.5 to 2 times the sail-away cost. This puts the total program cost per American-built submarine between $6.7 billion and $9.6 billion. Having them made in Australia will add billions to this figure, with a current upper estimate of $14 billion per boat. Going by our recent experience with the Attack class, and observing Wright’s Law, the final figure could be well beyond this.

Then there’s timing. In the US, a recent batch of nine Virginia-class subs was scheduled to take 10 years to produce. In a period when timing is critical to our national security, setting up production lines in Australia will add years, most likely over a decade, to the program. This isn’t due to any inherent weakness in Australian manufacturing; it’s largely due to the inefficiencies suffered in making the first batch of anything so complex.

Yet having our SSNs built in the US would depend on America’s willingness to increase its own production capacity. The US Congress has listed “the contributions that SSNs make to fulfilling [defense and national security] strategies,” and funding, as two factors influencing its decision to increase production. In terms of the US building our submarines, the AUKUS pact satisfies the first requirement, and Australia providing the funding answers the second. This means America would be able to scale up production to suit Australia’s demand.

Well over $35 billion and several years will be saved by making Australia’s submarines in the US.

And if the Americans build the submarines, Australia can leapfrog a generation of technology while refining the engineering skills required to design and manufacture autonomous underwater vehicles. Submarine design is far simpler when humans don’t need to live inside them. Breathable air, water, food, waste, medical, living spaces and some elements of protection from attack are all off the table with AUVs.

Fewer personnel are needed to operate AUVs. With the money saved by building the submarines in the US, Australia can invest a further $20 billion in developing an AUKUS industrial hub for AUVs in South Australia, using the formidable engineering skills already available there. Autonomous submarine technology will spur more innovation in Australia than building the non-nuclear parts of eight nuclear-powered boats. Australia will be able to export these autonomous submarines to its AUKUS partners.

The AUKUS announcement was a watershed for Australia. Nuclear submarines are clearly more effective than conventional submarines, yet we must choose carefully where to focus our efforts. The next generation of US nuclear submarine, the SSN(X), may be the last to require human crews. While there is understandable pressure to partly manufacture the nuclear submarines in Australia, it would be a bad decision.

Theodore Wright’s analysis provides us with a clear way forward. Building the submarines in the US won’t just save a prodigious sum of money and take precious years off the schedule. It will also dramatically improve Australia’s defense capabilities, aid the AUKUS alliance and foster a domestic supply chain for the next generation of defense equipment.

James Kell is a postgraduate research student at the National Security College at the Australian National University in Canberra and is vice-president of the ANU Democracy Society. These views are his own.

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https://www.maritime-executive.com/editorials/op-ed-australia-s-nuclear-powered-subs-should-be-made-in-america

General cargo ship MARE I was disabled in the evening Oct 13 in Myrtoan sea, south of southernmost Attica, Greece, while en route from Diliskelesi Turkey to Port de Sagunt Spain, Balearic sea. Understood it was a mechanical issue. The ship reportedly, didn’t request assistance, but nevertheless, was taken on tow and towed to Lavrio anchorage, southeast Attica, where she was anchored at night same day. As of 0220 UTC Oct 15, she remained in the same position, detained until proven seaworthy.

New FleetMon Vessel Safety Risk Reports Available: https://www.fleetmon.com/services/vessel-risk-rating/

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https://www.fleetmon.com/maritime-news/2021/35765/disabled-freighter-towed-lavrio-anchorage/

Kent Fire Service was alerted at around 0730 UTC Oct 15 and responded to fire on board of general cargo ship ODETTE, berthed at Sheerness Docks, UK, English Channel. Fire reportedly, broke out in cargo hold. Fire was extinguished by 1300 UTC, with all fire engines returning to stations. Character of materials which caught fire, and the extent of damages, are yet unknown. No injures reported. ODETTE docked at Sheerness on Oct 14, on arrival from Bremen. The ship was remained berthed with no fire boats or tugs at her side, as of 1410 UTC Oct 15.

New FleetMon Vessel Safety Risk Reports Available: https://www.fleetmon.com/services/vessel-risk-rating/

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https://www.fleetmon.com/maritime-news/2021/35773/general-cargo-ship-fire-sheerness-uk/

Chinese regulators’ decision to include all coal-fired power generators and commercial and industrial (C&I) users in market trading is a key step towards power market liberalisation, Fitch Ratings says. The widening of the trading price’s floating band will also mitigate earnings pressure from surging coal prices for China’s power generation companies (gencos).

The National Development and Reform Commission (NDRC) issued a notice allowing the market trading price of coal-fired power in sales contracts signed between gencos and users or distributors to be raised or lowered by up to 20% of the benchmark on-grid tariff, from the current 10% and 15%, respectively, effective 15 October 2021. The 20% limit for raising prices will not be applied to energy-intensive users, which are likely to pay a higher price when power is in short supply. There are also no limits on the spot power price.

China set the base-price-plus-floating mechanism in late 2019, but upward revisions were suspended by the government last year to control electricity costs for downstream users. More than 70% of coal-fired power was traded in the market in 2020 and sold at a discount to the benchmark tariff due to fierce market competition as well as low coal prices, which put pressure on power gencos’ profitability. This was heightened in 2021 when Chinese power gencos’ profit margins were substantially squeezed by a coal price rally.

The notice requires all coal-fired power to be sold under the market trading mechanism and encourages all C&I users to participate in the market, while currently only 44% of the C&I power consumption is traded in the market. Coal-fired power accounts for over 60% of China’s total power supply while C&I demand accounts for over 70% of China’s total power consumption, among which, energy-intensive users accounted for 28% in 1H21.

Fitch believes the move is a crucial step in Chinese regulators’ aim to meet their target to ‘regulate the middle and open up the two ends’ in power reform, as the power transmission and distribution tariff is now under strict regulation, while most of the power supply and demand are matched in market trading. C&I users that exit the market and purchase power through a grid company have to pay a higher price, according to the notice, which will keep them in the market when gencos raise prices.

The regulator also requires the coal-fired power tariff to be more closely linked with the peak-trough retail tariff to better reflect market supply-demand dynamics and shave peak load more effectively. The NDRC set the peak retail tariff at no less than 4x the trough for regions with peak load exceeding the trough by over 40%, and no less than 3x for all the other regions.

Fitch expects the wholesale power market to also gradually adopt a higher peak tariff, which will help to raise the realised market power tariff for power gencos. This will allow power gencos to pass through their costs on a more timely basis to C&I users when fuel costs increase. It will also provide greater incentive for C&I users to better manage their energy efficiency, especially when the market is in short supply. Some users may choose to avoid peak hours or lower power usage in peak seasons, which means the demand load can be more evenly distributed, which will lower the peak load pressure for the power system.
Source: Fitch Ratings

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China’s New Power Tariff Mechanism Enhances Cost Pass-Through

The US soybean acreage in marketing year 2022-23 (September-August) is expected to rise with a simultaneous cut likely in corn acreage amid soaring fertilizer prices, according to analysts.

As the fertilizer price indexes hit record highs, the input cost pressure on fertilizer-intensive corn planting will be markedly higher than soybeans in 2022, analysts said. As a result, there could be a notable shift in planting decisions in favor of soybeans when the next planting window opens in May.
Global fertilizer prices have been supported primarily by supply-side tightness, coupled with a strong price rally in crop commodities since mid-2020.

According to the US Department of Agriculture’s latest World Agricultural Supply and Demand Estimates report Oct. 12, while the average soybean prices for the marketing year are projected at $12.35/bu, up 14% on the year, corn prices have risen 21% year on year to $5.45/bu at this point in the marketing year.

S&P Global Platts assessments of soybean and corn prices have seen notable hikes as well.

SOYBEX FOB New Orleans was assessed at $493.19/mt Oct. 12, up 11% year on year, while CIF New Orleans corn was assessed at $234.05/mt, up 23.5% on the year.

Buoyed by multiyear-high crop prices, the fertilizer rates have soared to significant levels.

The Green Markets North America Fertilizer Price Index touched a record $996.32/st on Oct. 8, up 7.9% on the year.

The low-supply-driven spike in energy costs in Europe and China, especially natural gas – on which fertilizer manufacturing is heavily dependent – has pushed the prices of all nitrogen-based fertilizers to unprecedented levels, analysts said.

The current uptick in fertilizer prices is expected to continue in 2022 as easing coronavirus pandemic restrictions are likely to sustain global economic recovery and boost oil and natural gas prices.

Natural gas is a key input in the production of nitrogen-based fertilizers. And since corn is a fertilizer-intensive crop, its returns on planting are expected to be hit the hardest in 2022-23.

For US farmers’ cost of production budget, fertilizer is a large component when it comes to corn, as producers need to treat fields during the fall ahead of winter and again in the spring after plantings, according to Terry Reilly, senior commodity analyst, Futures International.

As fertilizer cost accounts for almost 40% of the operating cost for the US corn farmers every year, it is expected that a sizable number of US farmers might opt for soybeans planting instead of bearing the high operating cost of corn planting.

The higher fertilizer prices will see farmers switching corn crops to soybeans (which naturally nitrogenate the soil) leading to lesser corn acres planted in 2022, Platts Analytics said.

Echoing a similar sentiment, the University of Illinois in its latest crop budget report said that the fertilizer, seed and drying costs for soybeans are forecast to be $226/acre cheaper than for corn in 2022-23. Consequently, a corn farmer in central Illinois is forecast to make $24/acre profit compared with $150/acre in soybeans.

This is a considerable difference in returns between the two crops and is likely to be a deciding factor in the next year’s planting decisions.

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US soybean acreage likely to rise in 2022-23 amid soaring fertilizer prices

Indian imports of vegetable oils in September rose 67% month on month to 1.76 million mt as lower duties helped push palm oil imports to a historic high, according to data released by the country’s vegetable oil trade body on Oct. 13.

September palm oil imports surged to 1.26 million mt, up 68% month on month since it attracts a lower import duty compared to soft oils like soybean oil and sunflower oil, the Solvent Extractors’ Association of India said.

India — the largest buyer of vegetable oils in the world — imports about 14 million-15 million mt/year. Due to its cost advantage, palm oil accounts for more than half of those imports.

However, as prices of all vegetable oils climbed to record highs this year, palm oil’s share of the price-sensitive Indian market has risen to 63% in the current 2020-21 marketing year (November-October) from 54% in 2019-20, the October trade data showed.

Between November 2020 and September 2021, palm oil imports increased by 18% year on year to 7.63 million mt, while import of soft oils including soybean and sunflower fell 19% to 4.46 million mt, according to the SEA.

Malaysia remained the major supplier of palm oil products to India, edging out shipments from larger rival Indonesia. For soybean oil and sunflower oil, Argentina and Ukraine were India’s largest suppliers in the 2020-21 marketing year.

September’s jump in imports has pushed India’s total vegetable oil imports in the 11 months of the 2020-21 marketing year to 12.09 million mt, which is about 1.1 million mt lower than the full 12-month import of 13.18 million mt in 2019-20.

India cuts import taxes

Separately, India’s Ministry of Finance reduced import taxes on edible oils on Oct. 13, the fourth time they have been slashed since June as the government tries to ease surging retail prices of essential cooking oils.

According to the latest directive, the effective import tax on crude palm oil has been reduced to 8.25% from 24.75%. Refined palm oil products will be taxed at 19.25%, down from the earlier 35.75%.

The directive has also reduced taxes on crude and refined soybean oil, sunflower oils and will be in effect from Oct.14 to March 31, 2022, the ministry notification said.

India had previously changed its edible oil duties on Sept. 11 and before that on June 30.

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https://www.hellenicshippingnews.com/india-sept-veg-oil-imports-balloon-67-on-month-on-record-palm-oil-buying/

Delays at UK ports are having a severe impact on retailers, who are warning that customers might not be able find the same range of products this Christmas as they may have in previous years.

We talk to four firms to find out how it’s affecting them.

There is currently a shortage across the country affecting official Harry Potter merchandise, two retailers have told the BBC.

“First Brexit hit, and then the pandemic hit. The combination of both, the manufacturers got scared and work stopped and they couldn’t ship big containers by sea,” Elvijs Plugis, co-owner of fandom-themed collectible shop House of Spells, based in Charing Cross, London, says.

“A Harry Potter wand used to be £20, now it’s going to be £35-£40. All of the shops are running out of stock.”

Many of the wands, other official movie replicas and some of clothing merchandise are currently difficult to source, he says.

Mr Plugis added that House of Spells is now trying to focus on other fandoms as well as Harry Potter, although the business is still buying up as many licensed Harry Potter-themed product lines as it can find.

“Today at 8am in the morning, we received calls from the official Platform 9 and 3/4 shop [in Kings Cross Station] referring customers to us as they have run out of stock,” he says.

Typically, House of Spells makes a 20-30% margin on each wand it sells, but now the shop also has to pay another 25-30% in container shipping costs, as well as up to 30% more on customs charges.

“At the moment we have not raised prices – we don’t know how long it will be possible though,” says Mr Plugis.

‘Container prices are up 900%’

London Toy Company, which imports Harry Potter toys, as well as designing its own British-themed toys for familiar brands, says it has now sold out of all of its stock of Harry Potter products.

Container prices are up 900% for the firm, according to London Toy Company’s director Joel Berkowitz.

The firm now has 35,000 toys held up at ports, worth a quarter of a million pounds.

“We’ve had to redirect containers shipping around 10,000 toys, which would have gone straight to Felixstowe, to Tilbury Port in London, via France and Belgium,” he says.

“It’s adding a 2.5-3 week addition to the timeframe [of when customers will receive products].”

London Toy Company makes toys for brands such as the London Underground, JCB and several military museums across the UK.

Currently, its clients, including retailers like Amazon, Audi, Harrods and Moonpig, are all waiting to receive orders of toys.

“We are having to absorb the extra costs as much as we can and take a hit on our margin,” says Mr Berkowitz.

“There’s a ceiling for the products that clients are willing to pay, so we’re putting only a maximum of 10% on top of the cost of the product.”

‘People will not have the choice’

Alan Simpson, managing director of Toytown, a chain of independent retailers based in Belfast, is urging customers to start their Christmas shopping early this year.

“If you’re looking for choice, don’t expect to come in December and see what you would normally experience in a toy store,” he tells the BBC.

“I have 42 years in business [but] I cannot remember ever having to come through any issues like this that we’ve been dealing with.”

He says that although Toytown can try to pre-empt some of the price rises to help mitigate them, the problem is “right across the board”, affecting many retailers.

Mr Simpson uses the example of a toy construction truck: In October 2020, it cost 70p to ship from the Far East to the UK. Today, it costs £7 to ship.

The truck currently sells for £15, but he says the price will need to rise soon, as almost half of the retail price is now taken up by shipping costs.

“Come January, all suppliers are going to have to increase prices again, having [already] increased them in June, July and August this year,” he says, stressing that there is likely be an effect on inflation.

“They’re feeling the impact because they get the product from the same sources that we do.”

‘We are paying a heavy price for poor forecasting’

Other retailers who also rely on products being manufactured on the other side of the world are now gravely concerned, like London-based lighting company Houseof.

The firm says it is now being charged £14,000 per container – double the price last year, and seven times the cost compared to prior to the pandemic.

“Our containers are now being redirected to the northern ports, as Southampton, Felixstowe and London Gateway are all congested with static empty containers,” says Houseof co-founder Michael Jones.

“This increases our road transport costs significantly.”

He added that Houseof was also having to book road transportation for goods up to five weeks in advance – often before the container even leaves China.

“Given that it takes between 60-90 days to produce an order, we are paying a heavy price for slow communication and poor forecasting,” he says.

“Orders with retail partners are level with this time last year, but overall stock reserves are much lower, which will have implications as we enter the ‘peak season’.”
Source: BBC

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https://www.hellenicshippingnews.com/port-delays-weve-run-out-of-harry-potter-stock/

Russian oil producer Gazprom Neft SIBN.MM expects its hydrocarbon output to exceed 100 million tonnes in 2021, CEO Alexander Dyukov said on the sidelines of an energy forum in Moscow on Thursday.

Gazprom Neft reported output of 96.06 million tonnes of oil equivalent for 2020.

“The market is (now) a little overheated. The market (by winter) will be stabilised (without further OPEC+ action),” he said.
Source: Reuters(Reporting by Olesya Astakhova; writing by Tom Balmforth; editing by Jason Neely)

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Gazprom Neft’s hydrocarbon output to exceed 100 mln T in 2021