Nov 27, 2019

Kevin Hazel, head of Marsoft’s shipping economics team, notes that although no progress has been made on the trade war front the shipping markets have been anything but dull.

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Crude tanker rates went sky-high in October driven in large part by the ban on companies with ships trading with Iran - spot rates have since come back to earth.  Other indicators remain strong and we expect the market to remain buoyant in the short term.

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After a robust third quarter, dry bulk spot rates fell back significantly in early November, with Cape rates remaining relatively firm.  Looking ahead, we expect a mild pullback in 2020. 

Despite the worsening macroeconomic environment charter rates for large containerships are at four and half year highs, benefitting from an ever-increasing number of liner-operated vessels idled for scrubber retrofitting.  Our updated 5-year outlook will soon be available to outline longer-term prospects, as will our updated gas tanker market analysis.     

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With the IMO 2020 deadline now just 6 weeks away, concerns about the availability of 0.5% sulfur fuel have largely dissipated, and the differential between the price of this fuel and conventional fuel is expected to average $235/tonne over the course of 2020, based on forward markets. Another noteworthy development has been the relatively low level of ordering in most shipping sectors so far this year. We attribute the slowdown to uncertainty about what the ‘fuel of the future’ will be. Of course, the longer that ordering stays low, the more likely it is that shipowners should be able to enjoy a relatively prolonged period of healthy earnings.

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For further details on Marsoft’s approach and our shipping markets outlook do get in touch via one of our offices or on twitter.  

Marsoft produces regular market reports and risk analysis to guide our clients with an objective and independent viewpoint.

Nov 19, 2019

Wednesday, November 20th, 2019 from 1:30-2:30pm (EST)

to be live streamed here.

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Arlie Sterling: President of Marsoft 

Hauke Kite-Powell, Head of Gas Tanker Research, Marsoft

with MIT Sea Grant College Program

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A tax on carbon emissions is widely perceived (by economists) as the most efficient way to reduce carbon emissions and mitigate the costs of climate change.  We will briefly review the structure of integrated assessment models of climate and the economy, and show how these models determine a socially optimal climate policy (emission reduction path) and the social cost of carbon. Application of the framework to guide research into the capacity of the oceans to absorb carbon will be described.

The shipping industry accounts for approximately 3% of global carbon emissions, roughly equivalent to the carbon emissions by Germany. The International Maritime Organization (IMO) has set a goal of at least a 50% reduction in carbon emissions from shipping by 2050 and a complete decarbonization as soon as possible thereafter.  A “carbon levy” on bunker fuel could contribute to that goal and the concept has recently been endorsed by influential owners, charterers, and banks. The proposals will be reviewed along with the considerations (including speed reduction) motivating the specific recommendations. 

Nov 19, 2019

Marsoft’s latest FLAGSHIP update as well as Dry Bulk Market and Tanker Market Reports for the 4th quarter 2019 have been distributed.  The Container Market Report and LNG/LPG Tanker Market Reports will be issued shortly. 

For further information on our publications and all our services please contact one of our offices or get to us via Twitter

Nov 15, 2019

Costas Bardjis, Head of the Containership Market Researchat Marsoft comments:

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"Even though European import volumes (especially from Asia) are very strong this year, Marsoft’s base case view shows a slowdown in US imports:  we expect only +1.5% growth in 2019.

Furthermore, we see volumes in the Transpacific Eastbound main lane (Asia to the US) contracting in 2019 by 1%, registering the first decline since 2019.

Looking at the trade to GDP multiplier, it is of course not a new phenomenon that it is below 1, and as can be seen in this table showing the ratio of trade to GDP it was 0.5 back in 2015, a very poor year on the trade front.  Marsoft expects the multiplier to be closer to 0.8 in 2019.

It seems clear from recent developments that the trade war does have an impact on global trade.  Nevertheless, we expect global volumes to expand by 2.5% in 2019."

Our next market update is out shortly. 

We are always happy to discuss these issues so please contact us via one of our offices.

Nov 12, 2019

Marsoft’s Arlie Sterling attended the Global Maritime Forum in Singapore and will share his reflections and impressions on developments and implications for the world in a super-informal, conversational gathering at the Marine Money 20th Annual Ship Finance Forum in NYC on 12-Nov.

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“A maritime green fund could accelerate decarbonization in shipping, support scaling and infrastructure to deliver new fuels, while taking into consideration the impact on trade and developing states,” said BW Group Chairman Andreas Sohmen-Pao, who helped shape the plan.

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GMF has supported the development of the Poseidon Principles and, more recently, the Getting to Zero Coalition, both of which were also focused on.

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To register, and/or for information on membership, please contact:

Mike McCleery at mikemccleery@marinemoney.com

Nov 12, 2019

The Poseidon Principles

Julia Zhan, Senior Business Development Specialist at Marsoft will be interviewed by Greg Chase, Partner at Reed Smith

The Poseidon Principles provide a framework for integrating climate considerations into lending decisions to promote international shipping and decarbonization – but what does that mean for borrowers, lenders and the professionals who support ship finance transactions?

To register for this forum contact MikeMcCleery@marinemoney.com

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About the 20th Annual Marine Money Finance Forum

Nov 11, 2019

Marsoft and UMAS co-authored “A Quick Guide to the Poseidon Principles” for the latest Marine Money Magazine. UMAS is a world leader in providing decarbonisation solutions for maritime shipping. It co-authored the Poseidon Principles (PPs) in collaboration with the UCL Energy Institute and led the IMO’s 3rd GHG study. Marsoft has successfully forecasted and helped clients manage past shipping cycles. Both Marsoft and UMAS believe the PPs will catalyze a Green New Cycle in shipping, and aim to help stakeholders capture the climate wealth to be created in this cycle.

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!

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

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 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 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.