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Shipping battened down the hatches, bracing for an epic recession as world trade skidded to a halt with the Great Lockdown, the term the International Monetary Fund (IMF) has given to this year’s coronavirus-inspired recession. The IMF warned the recession this year is on track to be the worst since the Great Depression, far worse than the global financial crisis 12 years ago. The IMF is projecting global growth in 2020 to fall to -3%. The World Trade Organisation (WTO) stated that world trade is expected to fall by anywhere from 13% to 32% this year. Clarksons Research warned seaborne trade this year could decline on a scale not seen since the disastrous shipping recession of the mid-1980s. Clarksons warned seaborne trade may contract by 5% through 2020, the biggest decline for over 35 years. Singapore experienced one of its largest corporate collapses with Hin Leong Trading, which controls Ocean Tankers as well as Ocean Bunkering Services, revealing debts of $3.85bn as well as hidden futures losses of around $800m. Accounting firm PwC is set to become the interim judicial manager of the group with founder O K Lim and his family ceding control of the oil trading giant. Speculation is growing that Hin Leong could be rescued by Chinese energy major, Sinopec. Tanker rates leapt across the board with floating storage bookings soaring as oil producers fought against a historic nosedive in the price of crude. Reports suggested that floating storage could grow to cover one third of the entire tanker fleet capacity as producers work out what to do with cheap oil. The world’s largest oil producers agreed earlier in the month to slash production by 10m barrels per day amid plummeting demand thanks to the coronavirus. Saad Sherida Al-Kaabi, president and CEO of Qatar Petroleum, fired the starting gun today on this year’s most sought after ship order. Al-Kaabi put pen to paper last week via video link between Doha and Beijing, signing for sixteen 174,000 cu m LNG carriers at China’s Hudong Zhonghua Shipbuilding in a deal worth RMB20bn ($2.8bn), a record for Chinese ship exports. The deal is for eight firm and eight options with all ships due for delivery by 2027. The contract is the first quarter of a huge order with South Korean yards expected to get the lion’s share of the remaining 45 ships Qatar plans to order in the coming weeks. South Korea’s HMM, which joined THE Alliance this month, held a naming ceremony last week for the world’s largest containership. At 23,964 teu, the HMM Algeciras is 208 teu larger than the current biggest boxships afloat. European shipping reacted with anger on hearing that on the same day HMM took delivery of the ship the first of 12 record breakers - the Korean government unveiled a huge relief fund for its shipping and shipbuilding sectors. Seoul has created a $1bn emergency shipping package, of which $382m will be made available to HMM. Mediterranean Shipping Company (MSC) was hit by a malware resulting in much of its IT infrastructure going offline for five days around the Easter weekend. The MSC malware news means the world’s top three containerlines have all been hit by cyber attacks in the space of the last three years. Energy and commodities giant Vitol entered the Singapore bunkering market with the takeover of local outfit Sinanju Tankers. Vitol Marine Fuels, a subsidiary of the Vitol Group, acquired 100% equity interest of Sinanju Tankers Holdings and renamed the company Vitol Bunkers. It was revealed APL, a shipping brand that dates back to 1848, will bow out of the Indian subcontinent, Middle East and Latin American trades, leaving it to serve just the transpacific and US-flag services. Parent company CMA CGM, which bought APL four years ago, pulled the brand from the Oceania trade in January this year and from the Asia-Europe and transatlantic trades in October last year. APL’s intra- Asia short sea services have been operated via another CMA CGM acquisition, CNC, since December 2018.

April 2020 Review

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