Mar 25, 2020

LNG prices in Asia are on the rise after reaching record lows in February amid the COVID-19 pandemic. By the 24th of March, Wuhan – ground zero for the coronavirus outbreak – reported no new cases of the virus for five consecutive days, and LNG prices had posted week-on-week gains for several weeks straight.

While Chinese imports of LNG are expected to be down in Q1, with March taking the hardest hit (down some 23% YoY), we are now starting to see an upturn in LNG charter rates and expected loadings for April delivery in China, signaling a recovery could be on the horizon.

Mar 19, 2020

The oil and tanker markets have experienced a rollercoaster of events since we published our
quarterly report in February. After rocking the Chinese economy in January and February, the
COVID-19 virus then spread further west, into Iran, Europe and the US, leading to sharp
downward revisions for oil demand in 2020. Furthermore, on 6th March, to everyone's
surprise, OPEC+ members failed to come to a new oil production agreement.
Since then, Saudi Arabia and Russia have publicly announced their intentions to reverse their
strategy of cutting production to support prices, and instead increase production to regain
market share. According to the latest reports, Saudi Arabia has announced the Kingdom will
increase production to more than 12 mbd, up from 9.7 mbd in February. Russia and the UAE
have also announced plans to increase output. Such an immediate reversal of production
strategy completely changes oil market dynamics and by extension, tanker market dynamics
as well.

Mar 11, 2020

Marsoft's Julia Zhan, along with Paul Taylor (Global Head of Shipping & Offshore at Societe Generale CIB), was interviewed by Lindsey Keeble (Partner and Global Head of Maritime Sector at Watson Farley & Williams) at Marine Money Hamburg on 27th February to discuss the Poseidon Principles. Download a presentation and listen to the audio here.

Marsoft has launched a range of services to align with the goals of the Poseidon Principles and to support our clients as they make decisions about their climate alignment strategy. To learn more about our services please contact one of our offices.

Feb 21, 2020

April 2nd – 3rd 2020

The 7th International Symposium on Shipping Operations, Management and Economics (SOME 2020)

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Arlie Sterling, President of Marsoft will be giving a paper at this symposium entitled:

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Replace or Renew - Evaluating Renewal Options for Middle-Aged Ships

Modern commercial vessels are built to meet increasingly stringent efficiency standards and owners have aggressively adopted energy saving designs. The relatively high fuel consumption of conventional ships puts them at a competitive disadvantage and lenders may no longer consider them to be acceptable collateral.  Initiatives like the Poseidon Principles will put increasing pressure on borrowers in that regard.

At the same time there has been considerable progress in technology suitable for retrofitting conventional vessels.  This paper considers a wide range of retrofitting options and their likely performance impact is evaluated using resistance and engine performance models developed by the MIT SeaGrant Lab and based on extensive and proven tank tests. The financial performance takes the output of the vessel performance models and optimizes speed choice to maximize profitability under a wide range of market and fuel prices.

The results to be presented are relevant not only for owners considering retrofitting their fleet but also for the choice of building a new ship instead of investing in an existing fleet. 

Arlie will summarise the financial implications for a VLCC and describe the scope of the remaining research underway.

For more details of the symposium, Arlie Sterling’s presentation and Marsoft’s approach to decarbonization and the Poseidon Principles contact one of our offices.

Feb 11, 2020

A brief comment from Kevin Hazel, Head of Marsoft’s Shipping Economics Team:

Marsoft’s  base case view is that the virus will have a significant impact on the Chinese economy for the next 3-4 months, before conditions return to normal in the second half of the year.

We see this having a significant negative impact on Chinese oil demand and imports in 20H1, with OPEC likely cutting production in response, so this is a clear negative for the tanker market.

On the dry bulk side, we see a modest negative impact for steel production.

Our Low Case sees a much worse coronavirus situation, lasting through all of 2020, and helping to push the global economy into recession during the second half of the year.

We will comment further on the coronavirus impact in our upcoming 20Q1 release, scheduled to come out later this month.

Jan 29, 2020

Hauke Kite-Powell, Head of Marsoft’s Gas Market Tanker Teams comments:

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The Phase 1 trade deal between the US and China has the potential to boost LNGC tonne-mile demand.  But for now, it is only potential.  While China's import tariffs on US LNG remain in place, it is not likely that US LNG flows to China will rise significantly.  If China were to reduce or remove tariffs, and cover most of its 2020/21 uncontracted LNG demand from the US, this could increase lng tonne-mile demand by 3-4% over current trading patterns.

Oct 14, 2019

Marsoft and the MIT Sea Grant Design Lab hosted students and faculty from the Oslo Handelsgymnasium, one of the largest high schools in Oslo, Norway, on October 16th.  The students were part of an intensive program integrating training in programming with a rigorous science, technical, and mathematics curriculum.

Professor Chrys Chryssostomidis, head of the MIT Sea Grant Design Lab, observed “The visit was a wonderful way to introduce the Oslo Handelsgymnasium students to MIT – the lab experience plus discussion of research illustrated MIT’s “mind and hand” learning approach.”

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Arlie Sterling, President of Marsoft Inc., commented: “The MIT/Marsoft decarbonization in shipping research program is intended to identify and take advantage of opportunities to quickly reduce carbon emissions from shipping.  The visitors had a chance to see the close links between the laboratory and the business of shipping.”

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“We really appreciate the opportunity to learn more about MIT and the shipping business.  And the projects presented by Professor Chryssostimidis are a great way for our students to participate in important research relevant for the environment and business” commented Vigdis Oskarsdottir, faculty leader for the visit to MIT.

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MarineTraffic provided vessel tracking videos for the program.

Oct 18, 2019

Arlie Sterling gave Marsoft’s views about the shipping markets of the future at the ShippingInsight conference in Stamford on 17th October.  Arlie discusses the key concerns of the current market and then the spotlight increasingly falls on decarbonization.  You can see his presentation, Shipping Markets of the Future, here.

Oct 18, 2019

Hauke Kite-Powell, head of Marsoft's gas tanker markets team, gave a thought-provoking presentation at Marine Money in Athens on Tuesday.  He then went on to moderate a spirited panel discussion of leading LNG tanker owners.  They briefly discussed emissions and LNG as a bunker fuel, acknowledging the challenge of decarbonisation for the whole industry, not just for owners. You can view his presentation, "LNG Shipping and LNG Fuel: A Shifting Landscape" here.

Oct 31, 2019

There is still uncertainty surrounding the impact of the COSCO ban on VLCC earnings. We are continuously updating our models to reflect current market events, and here we show expected rate sensitivity for two cases: one where the COSCO ban remains in effect, and one where the ban is lifted by Q1 next year.

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How sensitive do you believe rates will be to a ban remaining in place? Get in touch with us to discuss!

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By Megan Kennedy - Marsoft Analyst

Nov 06, 2019

SINGAPORE - Arlie Sterling, President of Marsoft, the world’s largest independent maritime advisory service, was a participant at the recent Global Maritime Forum in Singapore.

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Decarbonization was a fundamental theme of the forum and one key outcome was the endorsement by the GMF of a carbon levy for shipping. Leading owners, charterers and banks have recommended that the IMO take the necessary steps to impose a carbon levy on bunker purchase. The proceeds of the levy would be to fund R&D, de-risking first movers, and the upstream investments, necessary to provide the new fuels required to decarbonize the industry. The specific levy proposed amounted to $30/tonne of bunkers in 2020 rising to $100/tonne by 2030.

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The likely impact of the industry’s decarbonization initiatives and carbon levy will emerge later in 2020; in particular whether ships more than 10 years old will depreciate more rapidly than historically observed. There was widespread discussion that the decarbonization/carbon levy initiatives could slow the pace of ordering until the net zero carbon “fuel of the future” was identified. LNG is likely to be getting a lot of interest because it is so cheap and because the cost of the incremental dual fuel capability (for large ships) has fallen so much.

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We are happy to discuss all these issues with you by email, phone and twitter – just get in touch!