Cruel Summer for Container, Dry Bulk Stocks as Sun Shines on Tankers

Stocks of container and dry bulk shipowners took a beating this summer. Tanker stocks continued their ascent, with many U.S.-listed tanker owners hitting fresh 52-week highs on Tuesday.

The consensus on tanker earnings: They’ve moved past their trough and are headed up from here. “The tanker sector can be characterized now as officially firing on all cylinders,” said Jefferies analyst Omar Nokta in a report this week.

The consensus on container shipping and dry bulk earnings: They’ve moved past their peak. Many of these shipowners still earn exceptional profits. Container-ship lessors have locked up enormous sums of charter revenue for years ahead. Even so, equities are following the negative trend in spot freight rates. Continue reading here (Source: American Shipper).

IMO's Carbon Intensity Indicator Comes in for Further Criticism

With 111 days until its introduction, critics of the International Maritime Organization’s (IMO) Carbon Intensity Indicator (CII) are growing.

The CII, which debuts on January 1 alongside the IMO’s Energy Efficiency Existing ship Index (EEXI), are the most significant pieces of green legislation from the United Nations body since the 2020 introduction of the global sulphur cap.

For the first time, the decisions made by charterers will fall within the scrutiny of an IMO instrument. CII’s real impact on the freight market is expected in 2024, as throughout next year, shipowners will aggregate a track for each of their ships that will set the basis for the first A to E CII rating, similar to the energy rankings seen on household appliances, the difference being in the complexity with how these rankings are derived. Continue reading here (Source: Splash247).

EU's Ban on Russian Fuel to Spark a Jump in Global Tanker Demand

The European Union’s ban on Russian fuel imports is likely to actually increase the world’s need for oil tankers, according to vessel owner Torm A/S.

Seaborne arrivals of crude from Russia into the EU will be outlawed from early December, and imports of diesel, jet fuel and other oil products will be banned a couple of months after. That means the region will have to bring in replacement supplies from farther away, while Russian barrels will also have to find new homes.

“The EU ban on Russian oil products from February 2023 will spark a recalibration of the oil trade ecosystem,” Torm said in a statement. “Some of this trade recalibration has already started.” Continue reading here (Source: Bloomberg).

Shipping's China Syndrome: Demand Sinks Across Multiple Cargo Markets

In the mid-2000s, when shipping stocks first became popular on Wall Street, the shares were commonly bought as a play on China’s economy. China is pivotal to ocean shipping, whether it’s container ships, oil tankers, bulkers or gas carriers.

“There’s a saying that everything that moves out of China in containers has to come into China as raw materials,” noted Oeyvind Lindeman, chief commercial officer of Navigator Gas (NYSE: NVGS), on his company’s latest conference call.

Ominously, signs of China’s weakening economy are showing up across all shipping sectors at once. Continue reading here (Source: American Shipper).

Japanese Make Breakthroughs in Ammonia Ship Race

Japan is pressing ahead with its own ammonia carrier plans. Nippon Yusen Kaisha (NYK), Japan Engine Corporation, IHI Power Systems, and Nihon Shipyard has received approval in principle (AiP) from ClassNK for an ammonia-fueled ammonia gas carrier.

At present, there are no international regulations for the use of ammonia as marine fuel. Therefore, the consortium have been conducting research and development to ensure that the planned gas carrier has the same safety features as vessels using existing fuel oil or LNG fuel.

The consortium conducted a HAZID risk assessment of the safety of using ammonia as marine fuel – an important component if ammonia, a highly volatile substance, is to gain acceptance as a shipping fuel of the future. Continue reading here (Source: Splash247).