Coronavirus, shipping’s greatest black swan event of the century so far, dominated all headlines. Container carriers braced for plummeting demand, and severe equipment shortages in western countries. Dry bulk carriers have had to factor in port and mill closures at key load areas, while the industry as a whole has had to work out how to get crew changes done when so few ports are willing to allow seafarers ashore.
Oil price wars between Russia and Saudi Arabia sparked a tanker fixing frenzy. The price for a barrel of oil slumped below $30 as OPEC+ broke up. Led by Saudi, a VLCC chartering binge took off with ships taken on subs for as high as $411,000 a day and the record firmly fixed deal being the Sea Splendor, a Chinese VLCC taken by Bahri for $351,961 per day. The rates
percolated down into other tanker segments while demand for floating storage options hit record levels.
Shipping passed peak scrubber with the price spread between high and low sulphur fuel oil going as low as $50 per tonne. For most of March the price
differential between shipping’s main two fuels has been in double-digit territory. Most advocates for the installation of scrubbers had said last year that $150 was the outlier pricing-wise in the justification case.
Periods of extended market uncertainty in shipping tend to see pools come back into vogue, something clearly in evidence in recent weeks. Maersk Tankers took over the operation of 27 Team Tankers International chemical tankers and established two pools for the vessels. Womar announced it will take over the operation of Chembulk’s entire chemical tanker fleet, while in dry bulk Klaveness sold its supramax pool to Clipper, while teaming with Marubeni and U-Ming to create a panamax pool.
March 11 saw South Korean owner Heung-A Shipping apply to start a debt
restructuring with state-run Korea Development Bank. The company has 19 tankers, having sold its container business to Sinokor last year.
This month saw a notable container comeback for one of the sector’s most famous pioneers. Graham Porter-led Tiger Group Investments, via subsidiary Greathorse Tiger, has gone to a favoured yard, Yangzijiang in China, to order two firm LNG-fuelled 14,000 teu ships plus six options. The firm ships start to deliver from May 2022 with the options spreading into 2023.
The financial health of SS Teo-led Pacific International Lines (PIL), the world’s tenth largest container carrier, has been the source of much conjecture of late with ships being detained and late charter and bunker payments all making headlines. The privately held Singapore liner quit the transpacific tradelane this month, having exited the Asia-Europe trades in April last year. It also sold its stake in Pacific Direct Line (PDL), which operates in the South Pacific as well as selling four of its largest ships.
State-run ASYAD Group merged Oman Shipping Company (OSC) and Oman Drydock Company (ODC). OSC has a diverse fleet of 50 ships while ODC is one of the largest shipyards in the Middle East.
Hong Kong’s Orient Overseas Container Line (OOCL) entered into shipbuilding contracts with two Cosco yards for the construction of a total of five 23,000 teu mega containerships, the most significant ship order of 2020 in what has been a muted year for shipbuilders to date.