This article examines recent progress and initiatives by the shipping industry to meet new IMO targets and provides Signal Ocean Platform data on emissions developments and trends.
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Over the last thirty days, the supply of commercially available Capes vessels dropped by 40% (from approximately 77 vessels to 44).
The number of liftings has decreased over that period, as well, falling 10% in West Australia and Brazil. When we compare the number of liftings to the same period in 2019, we also see a 10% decrease.
China’s Iron Ore reserves have dwindled since the start of the COVID19 outbreak, which could explain the increase in the number of vessels targeting load dates at the end of June. Over the course of the month of June, China’s Iron Ore inventories have continued to drop steadily, to under 108 million tonnes (Mt), the lowest level since October 2016.
The screenshot above is taken from the Cargo Count Dashboard in The Signal Ocean Platform, using Signal Maritime Services data.
The vessel supply drop that followed this increase in demand was not surprising. In the graph below, we see that the number of vessels that could potentially load in Brazil in the next 20 days, the typical fixing window for Capes, has dropped more than 40% during the last 30 days. Freight rates for the Capes market have reacted accordingly.
In addition to the above, in the screenshot below, we can do a deep-dive on the decrease we see looking at “ballasters” only in specific regions, like South Africa, East Africa, India. The decrease we see there is also significant.
The screenshot above is taken from the Ballasters View Report in The Signal Ocean Platform, using Signal Maritime Services data.
When the spot market experiences such an increase, it is not uncommon to see similar freight market dynamics play out in smaller vessel segments. For example, in the graph below, you can see freight rates for multiple vessel classes for the Brazil to China route.
A market rates time series for Capes, Panamaxes, Supramaxes loading Brazil to China, based on Signal’s data.
The earnings associated with the market increase shown above are reflected in the table below, comparing earnings between beginning and end of June, for a round-trip voyage from Brazil to China (for a non-scrubber fitted vessel).
The question remains whether this market change is here to stay over the next several months. It seems that this will be highly dependent on China’s desire to build reserves not only for Iron ore but also for other commodities like grains. It seems that soybeans reserves build up has already started and corn may not be far behind. Let’s see how these new trends will impact vessel supply and therefore rates.
Creating a sustainable world requires us to embark on a journey towards a zero emission future, where every step is a commitment to preserve our planet for future generations.
Albert Greenway
Environmental Scientist, Sustainability Expert
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Increased Use of Renewable Energy:
Shipping companies are embracing renewable energy sources to power onboard systems and reduce emissions during port operations. Solar panels and wind turbines are being installed on vessels to generate clean energy, reducing reliance on auxiliary engines, and cutting down emissions. Shore power facilities in ports allow ships to connect to the electrical grid, eliminating the need for onboard generators while docked.
Collaboration and Industry Partnerships:
Recognizing that addressing emissions requires collective action, shipping companies, governments, and organizations have formed partnerships and collaborations. These initiatives focus on research and development, sharing best practices, and promoting knowledge transfer. Joint projects aim to develop and deploy innovative technologies, improve infrastructure, and create a supportive regulatory framework to accelerate the industry's transition towards a greener future. The Zero Emission Shipping - Mission Innovation.
To pave the way for a greener future in shipping, the availability of alternative fuels plays a vital role in their widespread adoption. However, this availability is influenced by factors such as port infrastructure, local regulations, and government policies. As the demand for cleaner fuels in shipping rises and environmental regulations become more stringent, efforts are underway to improve the accessibility of these fuels through infrastructure development, collaborations, and investments in production facilities.
Liquefied Natural Gas (LNG) infrastructure has seen significant growth in recent years, resulting in more LNG bunkering facilities and LNG-powered vessels. Nonetheless, the availability of LNG as a marine fuel can still vary depending on the region. To ensure consistent availability worldwide, there is a need for further development of LNG supply chains and infrastructure. For biofuels, their availability hinges on production capacity and the availability of feedstock. Although biofuels are being produced and utilized in various sectors, their availability as a marine fuel remains limited. Scaling up biofuel production and establishing robust supply chains are imperative to ensure wider availability within the shipping industry.Hydrogen, as a fuel for maritime applications, is still in the early stages of infrastructure development. While some hydrogen vessels have been tested or introduced in the first quarter of last year, the infrastructure required for hydrogen production and distribution needs further advancement.
Ammonia, as a marine fuel, currently faces limitations in availability. The production, storage, and handling infrastructure for ammonia need further development to support its widespread use in the shipping industry.Methanol, on the other hand, is already a commercially available fuel and has been used as a blend with conventional fuels in some ships. However, its availability as a standalone marine fuel can still be limited in certain regions. Bureau Veritas in October 2022 published a White Paper for the Alternative Fuels Outlook. This white paper provides a comprehensive overview of alternative fuels for the shipping industry, taking into account key factors such as technological maturity, availability, safety, emissions, and regulations.
Creating a sustainable world requires us to embark on a journey towards a zero emission future, where every step is a commitment to preserve our planet for future generations.
Albert Greenway
Environmental Scientist, Sustainability Expert
Increased Use of Renewable Energy:
Shipping companies are embracing renewable energy sources to power onboard systems and reduce emissions during port operations. Solar panels and wind turbines are being installed on vessels to generate clean energy, reducing reliance on auxiliary engines, and cutting down emissions. Shore power facilities in ports allow ships to connect to the electrical grid, eliminating the need for onboard generators while docked.
Collaboration and Industry Partnerships:
Recognizing that addressing emissions requires collective action, shipping companies, governments, and organizations have formed partnerships and collaborations. These initiatives focus on research and development, sharing best practices, and promoting knowledge transfer. Joint projects aim to develop and deploy innovative technologies, improve infrastructure, and create a supportive regulatory framework to accelerate the industry's transition towards a greener future. The Zero Emission Shipping - Mission Innovation.
To pave the way for a greener future in shipping, the availability of alternative fuels plays a vital role in their widespread adoption. However, this availability is influenced by factors such as port infrastructure, local regulations, and government policies. As the demand for cleaner fuels in shipping rises and environmental regulations become more stringent, efforts are underway to improve the accessibility of these fuels through infrastructure development, collaborations, and investments in production facilities.
Liquefied Natural Gas (LNG) infrastructure has seen significant growth in recent years, resulting in more LNG bunkering facilities and LNG-powered vessels. Nonetheless, the availability of LNG as a marine fuel can still vary depending on the region. To ensure consistent availability worldwide, there is a need for further development of LNG supply chains and infrastructure. For biofuels, their availability hinges on production capacity and the availability of feedstock. Although biofuels are being produced and utilized in various sectors, their availability as a marine fuel remains limited. Scaling up biofuel production and establishing robust supply chains are imperative to ensure wider availability within the shipping industry.Hydrogen, as a fuel for maritime applications, is still in the early stages of infrastructure development. While some hydrogen vessels have been tested or introduced in the first quarter of last year, the infrastructure required for hydrogen production and distribution needs further advancement.
Ammonia, as a marine fuel, currently faces limitations in availability. The production, storage, and handling infrastructure for ammonia need further development to support its widespread use in the shipping industry.Methanol, on the other hand, is already a commercially available fuel and has been used as a blend with conventional fuels in some ships. However, its availability as a standalone marine fuel can still be limited in certain regions. Bureau Veritas in October 2022 published a White Paper for the Alternative Fuels Outlook. This white paper provides a comprehensive overview of alternative fuels for the shipping industry, taking into account key factors such as technological maturity, availability, safety, emissions, and regulations.
Over the last thirty days, the supply of commercially available Capes vessels dropped by 40% (from approximately 77 vessels to 44).
The number of liftings has decreased over that period, as well, falling 10% in West Australia and Brazil. When we compare the number of liftings to the same period in 2019, we also see a 10% decrease.
China’s Iron Ore reserves have dwindled since the start of the COVID19 outbreak, which could explain the increase in the number of vessels targeting load dates at the end of June. Over the course of the month of June, China’s Iron Ore inventories have continued to drop steadily, to under 108 million tonnes (Mt), the lowest level since October 2016.
The screenshot above is taken from the Cargo Count Dashboard in The Signal Ocean Platform, using Signal Maritime Services data.
The vessel supply drop that followed this increase in demand was not surprising. In the graph below, we see that the number of vessels that could potentially load in Brazil in the next 20 days, the typical fixing window for Capes, has dropped more than 40% during the last 30 days. Freight rates for the Capes market have reacted accordingly.
In addition to the above, in the screenshot below, we can do a deep-dive on the decrease we see looking at “ballasters” only in specific regions, like South Africa, East Africa, India. The decrease we see there is also significant.
The screenshot above is taken from the Ballasters View Report in The Signal Ocean Platform, using Signal Maritime Services data.
When the spot market experiences such an increase, it is not uncommon to see similar freight market dynamics play out in smaller vessel segments. For example, in the graph below, you can see freight rates for multiple vessel classes for the Brazil to China route.
A market rates time series for Capes, Panamaxes, Supramaxes loading Brazil to China, based on Signal’s data.
The earnings associated with the market increase shown above are reflected in the table below, comparing earnings between beginning and end of June, for a round-trip voyage from Brazil to China (for a non-scrubber fitted vessel).
The question remains whether this market change is here to stay over the next several months. It seems that this will be highly dependent on China’s desire to build reserves not only for Iron ore but also for other commodities like grains. It seems that soybeans reserves build up has already started and corn may not be far behind. Let’s see how these new trends will impact vessel supply and therefore rates.
