Sep 16, 2020

September 21st – 24th

MARINE MONEY’S VIRTUAL SHIP FINANCE WEEK includes two days of webinars on the all-important topic of ESG.   

Arlie Sterling will be contributing to the second ESG discussion on Wednesday 23rd September at 10.45 (US Eastern time)

Decarbonization: How it will be Achieved, How it can be Financed

Learn more about bringing the power of scale, profits and Co2 reduction to owners and financiers with Arlie’s presentation

Managing the Transition from Zero Emission Fuels to the Marsoft MIT Labs Retrofit Study.

Register here

Please let us know if you are interested in discussing this topic further with us – contact info@marsoft.com

Aug 20, 2020

After sliding downward for much of the first half of 2020, rates in both the LNG tanker and LPG tanker markets are set to rebound in the second half of the year.  Although trade was weakened in Q2 by Covid-19 slowdowns, Chinese LNG imports rebounded, and Europe continued to increase imports.  In LPG, India's import demand has remained robust despite Covid restrictions, and rising naphtha prices are boosting LPG demand. A rising forward curve is likely to contribute to LNG tanker market recovery by encouraging short-term floating storage. 

Detailed analysis and information are available in Marsoft's 2020Q2 LNG and LPG/VLGC tanker market reports.

Aug 20, 2020

At the start of 2020, the price differential between 0.5% Low Sulfur Fuel Oil (VLSFO) and 3.5% heavy sulfur fuel oil (HSFO) was running at more than $300 per tonne, before collapsing to $70 per tonne in March and averaging just $60 per tonne in 20Q2. Going forward, the differential is expected to increase modestly to $90 per tonne during 2021, and to an average of $100 per tonne from 2022 through 2024, as oil prices recover in the coming years. This projection reflects the forward curves for HSFO and VLSFO prices, as of early August.

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Presuming that spot rates are set by the ships burning VLSFO, and that owners trading spot will realize the full cost savings offered by burning HSFO vs. VLSFO after they have invested in scrubbers, the average spot rate differential for a VLCC in 20Q2 was estimated to be $2,500 per day, which is seen rising to $3,000 per day in 20H2. For a Cape bulker, we see the differential rising from $1,800 per day in 20Q2 to $2,100 per day in 20H2.

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We expect the sulfur differential to increase slightly over the next two years, as indicated by the forward market, bringing the scrubber premium back up to about $4,000 per day for a VLCC and to $3,000 per day for a Cape.

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Marsoft is monitoring developments in the scrubber and fuel markets closely and we have integrated the scrubber premium models into our Flagship System, which provides financial performance and risk assessment services for numerous types of specific ships.

Aug 19, 2020

It took the worst global economic crisis we have seen in over a century for the liner industry to report its most profitable performance in the span of several years in 20Q2. The steep correction in trade volumes was met by even steeper capacity withdrawals, resulting in high vessel utilization of the trading fleet and pushing liner freight rates to 5-year highs. Such unprecedented disciplinary actions helped boost liner revenues in the second quarter despite the drop in liftings, and in combination will lower OPEX (mainly due to low fuel prices) led to solid profits.

Aug 19, 2020

MARSOFT Q3 2020 RELEASE is now available for the Dry Bulk, Tanker, LNG and VLGC/LPG Markets. The LNG Regas & Liquefaction Supplement will be issued later in August and the Containership Report will be available in September.

For further information please contact one of our offices.

Jul 29, 2020

FLAGSHIP for Poseidon Reporting with Neutral Platform

Marsoft announces the immediate availability of FLAGSHIP for Poseidon Reporting.  The Poseidon Principles are a ground-breaking initiative launched by a group of ship finance banks to integrate climate considerations into their lending decisions.  The initiative requires signatories to measure the climate alignment of their portfolios by November each year.  Signatories can now rely on FLAGSHIP for Poseidon Reporting, and take advantage of the PoseidonConnector™, a common platform free to join by any party, to meet their 2020 Poseidon Principles reporting commitments.

Jul 15, 2020

Recent reports from China and the United States confirm that economic growth has rebounded.

China reported 3.2% GDP growth in Q2, up from -6.8% in Q1. The Q2 growth report exceeded the IMF’s forecast, released just last month, of 2.6% growth.

Retail sales reports in the US showed a 7.5% improvement from last month, after a (revised) 18.2% rebound in May. Retail sales are up by 5% relative to June 2019.

Unemployment claims in the United States fell in the latest weekly reports, to 1.4 million on a 4-week moving average basis. Although the trend is encouraging this is the fourth month in which claims exceed 1 million; prior to the pandemic claims were averaging about 0.2 million.

These signals are an encouraging development for global economic recovery and increased trade.  In contrast, some parts of the US economy will suffer as COVID-19-related restrictions are (re)imposed and political tensions with China are worsening. We will consolidate all this information in our upcoming market report to be released next month.

Jul 12, 2020

Marsoft’s July eBrief market reports are now available.  These summaries for the dry bulk and tanker markets have got everything you need to know this month, with current market developments and implications for forecasts of rates, newbuild and secondhand prices, and more.

In our Dry Bulk market eBrief, we are talking about Cape spot rates, which have staged an impressive rally over the past two weeks. As we head into early July, they have topped $30,000 per day, approaching the peak level seen just about a year ago. The jump in rates is even more impressive given the current macro climate, with a deadly pandemic crushing demand for steel in much of the world.

But a big question is whether the recent recovery in Cape rates is likely to have any staying power. In this eBrief we talk about why we think the answer to that is ‘No.’ See why we forecast Cape rates will fall by some 30-40% in the second half of this year and again in 2021.

Jul 08, 2020

Klapton Insurance Company recently cited Marsoft’s FLAGSHIP risk management platform as part of the expert infrastructure supporting the successful development of their new maritime residual value policy. 

Klapton recently closed a Residual Value Guarantee – more detail can be found here.

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Marsoft welcomes the opportunity to demonstrate the advantages that FLAGSHIP can offer to your company.

Jun 28, 2020

The International Monetary Fund (IMF) released a revision to its previous economic outlook data, showing a further downward revision of global GDP through 2021 due to the covid-19 pandemic. The IMF’s update quotes a larger-than-expected negative impact to markets than it forecasted in April, but as shown in the chart below, we at Marsoft had already expected a similar drop and subsequent recovery weeks earlier in our published Q2 2020 reports.  

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To learn more about how we help our clients mitigate risk in times of uncertainty please contact one of our offices.

Jun 21, 2020

The Trillion Dollar Opportunity: Decarbonizing the Shipping Industry

Click here to see Marsoft’s 1st Steps towards

CLIMATE ACTION & THE $24 BILLION MARKET

Arlie Sterling, President of Marsoft, was a panelist at

CELEBRATING MARINE MONEY WEEK :  STAYING CONNECTED: THE FUTURE OF SHIP FINANCE

Click here to listen to the panel discussion of June 14th

May 19, 2020

Since our Q1 20 Release there have been many changes in the markets – Marsoft has therefore released a one-off Special Report for all clients reflecting this fresh perspective.

The Report summarizes Marsoft’s assessment of likely developments and risk factors across the markets.

Detailed market reports can be obtained on subscription and will be available at the end of the month.

For further information contact one of our offices.

Apr 09, 2020

In this current state of global uncertainty and mixed messages concerning markets and the economy, it is reassuring to know Marsoft’s shipping forecasts are clear and reliable.

We continuously monitor the accuracy of our scenario analysis.  The results from our performance review through 2019 have just been released.  Our performance for the VLCC market is representative.  Marsoft’s Base Case charter rate forecasts were 80% more accurate that the standard rolling-average benchmark and our one-year-ahead turning point calls were right almost 75% of the time.  Our High and Low Case scenarios have proven to provide a reliable indicator of market risk.  VLCC TC rates have fallen below our Low Case scenarios just 24% of the time over the past decade and exceeded the high case just 29% of the time.

We are here to answer questions and discuss markets with you! 

From all of us at Marsoft - stay safe.

Apr 06, 2020

Wednesday April 8th

MARSOFT AND MARINE MONEY WEBINAR Wednesday 8th April 10 am EST

The Marsoft Team: Arlie Sterling, Kevin Hazel and Aditya Trivedi will be discussing

The Oil and Tanker Market Outlook – Key Issues and Opportunities

If you wish to join this webinar you will need to register & click this link https://register.gotowebinar.com/register/6408553406579464204

Or for more information contact one of our offices

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!