In its latest weekly report, shipbroker Allied Shipbroking said that “undoubtedly, we are amidst one of the best rallies seen for many years now in the dry bulk sector, with many market participants already anticipating a similar trend to take place during the 2nd half of the year. Both market sentiment and various momentum metrics support the idea of a “strong” trajectory in shipping market. However, under the current tail-risk regime, all this cannot be taken for granted.
According to Allied’s Research Analyst, Mr. Thomas Chasapis, “the recent spikes of the COVID-19 Delta variant spread have quickly reminded us that the recent postpandemic recovery is still very fragile and at risk of any negative developments. Moreover, the fear of rising inflation can easily shift the monetary mechanisms and transfer the pressure onto global economic growth (and as a result in trade). On the dry bulk sector, throughout the 1st half of this year, the spot freight market has been the barometer for the current abundant bullish sentiment. The steep upward track in many core indicators is but a mere reflection of a hefty recovery from the side of earnings. A robust and fundamental change in the supply/demand dynamic took place which has been the driver to this and not some exaggerated kneejerk movement with over-speculative and over-enthusiastic plays that the shipping markets are so prone to”.
Source: Allied Shipbroking
Chasapis added that “on the other hand, we could say that there is seemingly a sense of “conservatism”, partially at least. Given the current spot/period TC numbers, while taking into considerations the current ease of access to finance and SnP market liquidity, asset price levels are somehow still lagging their respective freight figures. This, of course can have multiple interpretations. We may assume that this type of conservatism can help overall stability, with the idea of less exposure to potential market shifts and overshooting what the market will do over the next couple of months. However, lagging prices can result in higher price jumps in intermittent periods which could inevitably be a source of instability”.
Allied’s analyst adds that “getting back to the spot market, while measuring the recovery from a different angle, we have mentioned in many different situations in the past that the average figures can be somehow misleading and “skew” perceptions. This is because a periodical strong market can boost average returns, but it has not been taken into consideration that this periodical trend can be narrowed to only a fraction of the fleet and involves those market participants of a given size that have part of their fleet open and can afford taking risks and speculate in any potential market shifts. That is the difficult part of having a homogeneous sentiment over all parties involved of various types of units and fleet profiles”.
Source: Allied Shipbroking
“That is a key step forward that has been made in the dry bulk sector, especially for medium to smaller sizes. In the Panamax, Supramax and Handysize units, looking at the dispersion of freight rates on a year-to-date basis, almost 75% of the values for all these size segments are above the highest figures noted respectively in at least a 3-year comparison. A good market for everyone then. All-in-all, the upcoming months will be very interesting. The recent trends in period TC rates and FFA contracts have built a strong optimism for the market. If we are not about to see any further excessive peak numbers, we will probably remain on a “good” track. That is why, we should not be in hurry to take seasonality pattern assumptions of recent years as a direct link, as we are in a different market regime. Finally, even in a relatively “stagnant” freight market, the upward pressure will theoretically continue on asset prices until they reach be on par with the respective buying appetite”, Chasapis concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide
The non-operating container ship owner Seaspan Corporation announced Wednesday that it has raised $750 million in “blue”-branded bonds, up 50 percent from a planned $500 million issuance. The funds will be used for sustainability-linked purposes in line with a previously-released “blue transition bond framework,” which names LNG as the transition fuel of choice for the short to medium term.
In March, Seaspan entered into an agreement to build ten new 15,000 TEU dual-fuel LNG powered boxships, with delivery scheduled for the first half of 2023. They will be chartered to a major shipping line for 12 years. It ordered ten more 7,000 TEU dual-fuel LNG boxships in early July for long-term charter to Zim.
According to Graham Talbot, Seaspan’s CFO, the company has invested $1 billion in containerships, all attached to long-term charters that will bring in a combined $1.8 billion of contracted cash flow over time. This managed-risk strategy is part of the company’s approach to obtaining an investment-grade credit rating, Talbot said.
The incentive for the upgraded status is strong: Seaspan’s latest bonds pay an interest rate of 5.5 percent, above the prevailing rate of 2-3 percent for investment-grade corporate bonds. Seaspan and its holding company, Atlas, are raising large sums to build a targeted $2.5 billion portfolio of vessel investments.
The $750 million bond issuance reflects investor interest in the exceptional financial opportunities in the global container freight market, as well as a growing interest among financiers for “green” lending products. Seaspan’s bonds are designed to align with the International Capital Market Association’s Green Bond Principles and are informed by the Climate Transition Finance Handbook.
There is an active debate in the shipping finance community over LNG’s role as a green fuel or transitional fuel, Standard Chartered executive director Roger Charles told Platts in April. The Poseidon Principles – the green lending standard used by two dozen large shipping banks – notes concern about LNG’s role as a marine fuel, citing the climate-warming influence of methane leakage.
On the same day as the European Commission’s announcement of its decarbonization plans for shipping, including the status of LNG as a transition fuel, German carmaker Volkswagen announced that it is chartering four more newbuild LNG-powered car carriers.
Each year, Volkswagen loads 2.8 million new cars on ro/ros for delivery, using chartered space on hundreds of vessels making about 7,700 total departures from ports around the world. The company charters eleven car carriers for its own full-time use.
When delivered and added to its current roster of two LNG-powered ro/ros, the vessels will make VW the first automaker to transport most of its overseas sales using LNG, the company said. All four should be in service by the end of 2023, and they will be deployed on its North American service for deliveries between Germany and Veracruz, Mexico (and points between). On the return trip, the LNG-fueled ships will transport new vehicles destined for Europe. Their engines will be high-pressure injection models with no methane slip.
“In line with the Group’s commitment to e-mobility and climate-neutral production, the LNG fleet . . . represents a major contribution to making Volkswagen net carbon neutral by 2050,” said Simon Motter, Head of Volkswagen Group Logistics. “The new ships will also permit the use of non-fossil fuels in the future, thus reducing CO2 emissions even further.”
VW says that the switch to LNG is consistent with its climate goals. In Germany, the group has already switched all rail transport with Deutsche Bahn to green electricity, and it is extending this to transport throughout Europe. On coastal routes, the group already operates two car carriers with biofuel produced from plant-based residues, including waste oil from the food industry. The company estimates that its biofuel-powered voyages yield an 85 percent reduction in CO2 emissions on a well-to-wake basis.
The non-operating container ship owner Seaspan Corporation announced Wednesday that it has raised $750 million in “blue”-branded bonds, up 50 percent from a planned $500 million issuance. The funds will be used for sustainability-linked purposes in line with a previously-released “blue transition bond framework,” which names LNG as the transition fuel of choice for the short to medium term.
In March, Seaspan entered into an agreement to build ten new 15,000 TEU dual-fuel LNG powered boxships, with delivery scheduled for the first half of 2023. They will be chartered to a major shipping line for 12 years. It ordered ten more 7,000 TEU dual-fuel LNG boxships in early July for long-term charter to Zim.
According to Graham Talbot, Seaspan’s CFO, the company has invested $1 billion in containerships, all attached to long-term charters that will bring in a combined $1.8 billion of contracted cash flow over time. This managed-risk strategy is part of the company’s approach to obtaining an investment-grade credit rating, Talbot said.
The incentive for the upgraded status is strong: Seaspan’s latest bonds pay an interest rate of 5.5 percent, above the prevailing rate of 2-3 percent for investment-grade corporate bonds. Seaspan and its holding company, Atlas, are raising large sums to build a targeted $2.5 billion portfolio of vessel investments.
The $750 million bond issuance reflects investor interest in the exceptional financial opportunities in the global container freight market, as well as a growing interest among financiers for “green” lending products. Seaspan’s bonds are designed to align with the International Capital Market Association’s Green Bond Principles and are informed by the Climate Transition Finance Handbook.
There is an active debate in the shipping finance community over LNG’s role as a green fuel or transitional fuel, Standard Chartered executive director Roger Charles told Platts in April. The Poseidon Principles – the green lending standard used by two dozen large shipping banks – notes concern about LNG’s role as a marine fuel, citing the climate-warming influence of methane leakage.
In another indicator of the booming shipbuilding market, Korea Shipbuilding & Offshore Engineering (KSOE) – the holding company for Hyundai Heavy Industries – reports that it has already surpassed its annual sales targets.
With a new $400 million order for two new LNG carriers – on top of $800 million in orders for four LNG carriers announced earlier this week – the company has now raked in new sales totaling more than $15 billion in the span of seven months. This is more than the entire amount that its sales team brought in last year.
“KSOE will push ahead with a strategy to win more orders focusing on profits this year,” KSOE spokesman Park Joon-su told Yonhap.
The company is also expected to win a groundbreaking $2 billion contract from Maersk for a series of 12 methanol-fueled, 15,000 TEU container ships. One of the conglomerate’s subsidiaries won the contract for Maersk’s first methanol-powered boxship, a trial-size 2,100 TEU feeder, in a deal signed in June.
However, the outsize sales numbers may not translate into outsize profits – at least not right away, according to KB Securities analyst Jeong Dong-ik. The cost of steel plate is soaring, cutting into the profitability of the yard’s backlog of signed newbuild contracts. Given the rising cost, Jeong predicted a second-quarter operating loss for KSOE of about $500 million – and potentially more.
KSOE has also been dealing with a strike movement amongst its unionized workforce, which has been working without a contract for the past two years. On Wednesday, its union announced that it had reached a tentative pay raise agreement with KSOE covering last year’s wages, ending a one-week walkout.
In what is seen as a significant step forward in the development of floating offshore wind farms, the WindFloat Atlantic project located off Portugal became the world’s first offshore wind farm to achieve class certification. The ABS Class Committee accepted three floating turbines from the projects, which is continental Europe’s first larger scale floating wind farm.
“It’s a historic first and, we believe, the first of many more to come,” said Matt Tremblay, ABS Senior Vice President, Global Offshore. “It underscores the potential of Class and industry working together for the safe adoption of new technologies. ABS has supported innovation in offshore energy and this landmark project underlines how we continue to support promising offshore technology”
ABS noted that it has been working closely with the project through all the phases of its development. The acceptance into class is the latest step in a process that began with the launching of the first demonstration platform at the site in 2011. ABS supported the development of the 2MW WindFloat 1 that was attached to the power grid in December 2011 and has made a significant contribution both to this project and the development of offshore floating wind in Portugal.
The WindFloat Project developed a new technology for the installation of offshore wind turbines at depths of more than 130 feet. The project developed a floating foundation, based on the experiences from the oil and gas industry, to support multi-MW wind turbines in offshore applications. The floating foundation is semi-submersible, anchored to the seabed. Its stability is due to the use of “water entrapment plates” on the bottom of the three pillars, associated with a static and dynamic ballast system.
“The WindFloat Atlantic project is again showing its technology reliability,” said Jose Pinheiro, Ocean Winds Southern Europe BU Country Manager. “Having achieved formal ABS classification for the three floating platforms is, therefore, an important milestone for the project shareholders and also for the offshore floating wind industry.”
The three 8.4MW floating turbines classed by ABS are SEMI Submersible Type units designed by Principle Power housing MHI Vestas turbines make a total of 25 MWs of floating offshore wind power. Located approximately 12 miles off the coast of Viana do Castello, Portugal, the project has been developed in phases as a prototype for the float offshore wind sector. The installation of the first Windfloat Atlantic turbine on its floating platform took place in July 2019, Spain, making it the largest turbine ever to be installed on a floating platform. The first turbine was connected to the power grid at the end of the year, and the third turbine was moved to the site in May 2020.
The WindFloat Atlantic project was developed by the Windplus consortium, which is jointly owned by Ocean Winds. Which is a joint venture between EDP Renewables and ENGIE, along with Repsol, and Principle Power.
According to the project managers, floating foundations mean that offshore wind farms are not subject to the same depth restrictions as fixed structures and can be at any depth. With the development of larger turbines above 10 MWs and research focused on shallow water moorings, the floating technology may be an alternative in the future to traditional fixed-bottom technologies in intermediate water depths.
ABS is the leading classification organization for floating offshore wind and continues to lead the development of design standards and concepts for floating offshore wind turbine foundations. ABS certified the first commercial-sized semisubmersible floating offshore wind turbine and released the ABS Guide for Building and Classing Floating Offshore Wind Installations in 2013. ABS also was the first class society to venture offshore, certifying the world’s first mobile offshore drilling unit in 1958 and classing the first jackup, semisubmersible, drillship, FPSO, TLP and spar.
Shown here in dry dock in Marseilles, France, Carnival Dream is the latest Carnival Cruise Line ship to be adorned with a stunning new hull design, joining Carnival Magic and Carnival Glory which were completed over the past few weeks.
The eye-catching livery is inspired by design that debuted on the line’s newest and most innovative ship, Mardi Gras, while serving as an homage to maritime tradition with patriotic red, white and blue hues, also the colors of Carnival Cruise Line which proudly sails as America’s cruise line.
The next ship in line is Carnival Valor, which is currently in dry dock with work scheduled to be done by the end of July, marking the fourth ship to feature the new livery. Going forward, the new design will be added across all Carnival Cruise Line ships.
MSC takes its commitment to decarbonisation extremely seriously. However, this is a complex endeavour that requires commitment and long-term vision. To reach carbon neutral future is a long journey that will take years and significant investments with strategic partners and enablers.
Despite the disruptions to the supply chains and the huge demand for cargo transportation in an extremely challenging, congested and evolving market, the company continues to focus on improving energy efficiency in its fleet of over 600 ships.
In 2020, MSC recorded a 44.3% reduction in relative CO2 emissions (compared to 2008 baseline).
The ratio of CO2 emissions per ton of cargo the company moves is among the lowest in the industry – latest EEOI 13.98*.
MSC operates one of the most efficient fleets in the industry – MSC Gülsün, the flagship of its latest class of vessels, emits just 7.49g CO2/ton/mile by design.
The data reported in the EU MRV database reflects MSC’s leadership position (volume) in Europe and should be put into context with the amount of cargo carried – MSC deploys around 58% of its vessels and carries almost 64% of its TEUs on services calling the EU**.
In 2020, MSC recorded that while its emissions rose by 1%, the amount of cargo moved increased by 3%***. This clearly indicates that MSC’s long term commitment to investing in low-carbon technologies and extensive new-build and retrofit programmes helps boost performance and minimise environmental impact.
MSC fully supports the IMO’s policy goals to decarbonise shipping and is actively exploring and trialling a range of alternative fuels and technologies on top of significant energy efficiency improvements across its fleet.
MSC believes some form of global market-based-measure, incorporating carbon pricing, could help the industry to decarbonise by reducing the price gap between fossil fuels and zero-carbon fuels as they become available. However, only with options at scale for commercially-viable low or zero-carbon vessels can carbon pricing be a truly effective tool to catalyse the shift towards a zero-carbon future for international shipping.
Further to the company’s own efforts to minimise environmental impact, MSC actively contributes to a number of industry and multi-discipline groups, coalitions and associations to accelerate decarbonising across the entire shipping sector.
Evergreen Line was notified by the owner of the EVER GIVEN yesterday
(7th July) that a formal agreement has been signed with the Suez Canal
Authority to settle the compensation claim and the ship’s arrest order has
also been lifted.
The chartered vessel has departed from the Great Bitter Lake in the Suez
Canal and safely arrived at Port Said for inspection. According to the ship
owner, the classification society planned to complete the inspection on July
10th. As soon as the certificate of seaworthiness is obtained, the EVER
GIVEN will depart for Rotterdam and is estimated to arrive around July 23rd
to discharge cargoes.
Evergreen sincerely appreciates the efforts of all concerned parties and will
keep in close contact with the ship owner to resume the chartered vessel’s
voyage.
In a year where seemingly every last transaction sets a new container shipping S&P record, Cyprus Maritime has pulled off an extraordinary coup.
The Cypriot owner has sold the 2006-built, 5,060 teu S Santiago to fast growing OM Maritime for $58m with a forward delivery of March 2022. The forward delivery allows the sellers to capture the extremely lucrative short term charter market in the interim, Braemar ACM noted in a weekly report, adding that similar ships on the basis of prompt deliveries are said to have now seen closer to $70m.
Cyprus Maritime bought the S Santiago four years ago for $17.8m. The Cypriot owner recently clinched a highly lucrative 80-day charter for the ship at $120,000 per day from China’s BAL Container Line, giving it a stunning $9.6m extra revenue and still another six months of potential charter earnings before the ship gets handed over.
Singapore-based OM Maritime has had a busy year, buying six ships to date with another two due before the end of the summer, according to Alphaliner.
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