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Insights 📈

Oil & Gas

• All eyes on India (link)

• Middle Eastern Producers continue to provide a strong baseline for the VLCC Segment (link)

• Global LPG trade flows face a myriad of uncertainties in spring 2024 (link)

Dry Bulk

• Capesize Brazil to North China rates experiences an upturn (link)

• Tonnage Supply Key to Capesize Freight Rates (link)

• The stories that are shaping the landscape of Dry Bulk demand (link)

Other

• Featured Insight: The Container Fleet to be flooded with new capacity

• The United States sanctioned another vessel (link)

• Leaked papers reveal inner workings of Iran’s shadow oil trade (link)

• Number of container vessels sold in the second hand market declined for the second year running (link)

Red Sea 🌊

Red Sea - Key Tanker Flows Gibsons

Weekly Red Sea Roundup Windward

How the Red Sea disruptions have effected Dry Bulk Trade Kpler

Bab El Mandeb Strait Passings Drop Further As Carriers Reroute Lloyd’s List Intelligence

Industry associations release updated guidelines for commercial shipping in the Red Sea and Gulf of Aden Maritrace

Meet our new Partner

Tathya.Earth is a geospatial analytics company leveraging Remote sensing, Machine Learning and Computer vision techniques to build proprietary models using satellite data to monitor production, Mining and Inventory of Industrial commodities.

• Near real time production, mining and raw material inventory, indicators for short term demand and supply

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• Unplanned production and supply changes and black

The Container Fleet to be flooded with new capacity Maritime Insight

The IMF has in its January WEO update raised its global GDP growth forecast for 2024 to 3.1% and for 2025 to 3.2%. The upgrade was due to better economic resilience in the US and in some large emerging/developing economies, and higher than expected fiscal support in China.

The Chinese GDP growth looks like it has exceeded expectations and has preliminary come in at 5.2% in 2023. Most forecasts point at a growth of 4.6% in 2024. Negative risks are mounting geopolitical tensions that could heighten economic uncertainty, with negative effects on consumption, foreign and domestic demand.

A higher-than-expected economic growth in China is good news for container ship operators. The decisions to avoid sailings through the Red Sea and instead opt for the two weeks longer round the south of Africa will absorb tonnage. The Houthi attacks on ships passing through the Red Sea will hopefully cease soon, but the repercussions on global supply chains will take many months after that to clear.

Looking at the development of larger parts of the container fleet, any additional demand the next couple of years are positive for ship operators as the fleets will be flooded with new capacity.

The large ships, of 10,000teu and above are mostly engaged in services between the Far East and Europe (new post-Panamaxes), and between the Far East and the US East Coast (up to neo-Panamaxes). The fleet is still young, so there are very few removal candidates. The net fleet capacity growth will peak at 16% this year according to maritime-insight forecasts.

The fleet of ships ranging from 3,000teu up to 10,000teu has a different age profile. Here we see quite dramatic changes already going on as the older tonnage is being phased out, and new – often larger – ships are built and deployed. The strong growth of intra-Asian and north-south trades will absorb parts of these capacity additions.

This piece is from the monthly report series, mi Shipbuilding and Fleet Forecast.

Reports and Data available via Maritime Data

Red Sea - Key Tanker Flows Gibsons

Another key tanker flow that traditionally relies on Suez transit is the crude trade from the MEG into Europe, which averaged 865kbd in January, down modestly from 910kbd in 2023 (but surprisingly up compared to shipments in Nov/Dec 2023). Out of 15 Suezmaxes and 8 VLCCs that loaded crude in the MEG in January for delivery into Europe, 10 Suezmaxes and 6 VLCCs opted for a COGH routing. In addition, circa 445kbd was exported from the MEG into Ain Sukhna on average last year, with the vast majority of these barrels destined for the European market. This trade collapsed to just 30kbd in January; however, it is too early to draw conclusions as monthly exports are often volatile, whilst there also was an increase in shipments into Ain Sukhna from West Coast Saudi Arabia in the Red Sea.

With most crude tankers avoiding the Red Sea, it is perhaps surprising that we haven’t seen the same response as in the clean market. This is particularly the case for Suezmaxes that dominate the MEG to Europe trade. There are several reasons for this. Firstly, although the affected volumes are broadly similar, bigger cargo sizes mean less tankers. Secondly, fleet size also matters. Whilst the Suezmax and VLCC fleet is over 660 and 900 units each, there are currently circa 250 LR2s and 260 LR1s trading clean, with the rest operating in the dirty segment. In addition, there is also a clear shift away from Suezmaxes, which accounted for 80% of all crude moved from the MEG to Europe last year but just 55% in January.

MEG-Europe Crude Flows by Vessel Size (%)

Yet, despite the muted response in the crude tanker market so far, if the current situation continues for any significant period of time, the impact of COGH routing will accumulate, offering support to tanker rates. Also, it will be interesting to see how many Mediterranean and CPC Kazakhstan barrels will continue flowing East, with shipments (mainly consisting of CPC and Libyan barrels) averaging 560kbd last year. Unless there is a dramatic decline in these volumes, GOGH routing will offer another boost to crude tanker tonne miles.

Weekly Red Sea Roundup Windward

The Bunkering Redirection

There has been a 50% increase in bunkering operations in East Asia, a 40% rise in bunkering ship-to-ship (STS) engagements in Europe, and a corresponding 20% decrease in the Middle East, according to Windward’s Maritime AI™ platform’s analysis of container vessel bunkering between October 2023 and January 2024.   

A 77% Increase in Route Deviations?! 

Windward’s AI-powered insights show a 77% increase in route deviations in the Red Sea and Gulf of Aden by all vessels (January 24-February 4). Our data shows that the majority of the route deviations were conducted North of the Yemeni EEZ and East of the Gulf of Aden. 

There was a sharp 700%(!) increase in anchoring for over five hours in the North Suez port waiting area (January 27-28). This is noteworthy, because it might suggest that vessels are still avoiding entry to the Red Sea and staying in the Suez, which might create more congestion in the area and greater delays in the supply chain.

Don’t Forget About Russian Oil…

Red Sea and Suez Canal traffic is down 70%-80%. But more than 114 vessels that are marked as “High Risk” for Russia regimes took the route of Med –> Suez –> India/Asia during the past 60 days, according to Windward’s Maritime AI™ platform. 

While many major energy companies and carriers are sending vessels on the long route around the Cape of Good Hope, Russian oil seems to still be flowing in the Middle East. 

Interested to understand how Maritime Data can help you understand which Vessel Tracking Data Service works best for your business?

Maritime Data acted as an extension of the team’s resources. The process that we went through in the time that we did would of been impossible to accomplish ourselves.

-Senior Executive at Leading Maritime Technology Business

How the Red Sea disruptions have effected Dry Bulk Trade Kpler

In 2023, 350 Mt (7%) of seaborne dry bulk trade passed through the Suez Canal, a record high. However, the proportion of trade transiting the Suez Canal varies significantly across dry bulk commodities.

More than 12% of seaborne grains and oilseeds trade used this route in 2023, with significant contributions coming from fronthaul shipments out of the Black Sea, including corn, soybean and wheat exports from the US East Coast (USEC) and US Gulf (USG) ports, and European grain exports. This is a markedly higher proportion than for coal and iron ore trade.

Grains and Oilseeds

About 7 Mt of grains that pass through the Red Sea every month. We see confirmed diversions of about 4.5 Mt of cargo since mid-December, up from 3.8 Mt last week. More vessels, especially those sailing from the US Gulf, are deciding to go via the Cape of Good Hope to avoid the Red Sea, adding between 10 and 20 days of sailing time. Notably, most vessels originating in the Black Sea are still taking the Red Sea route.

Grain prices have not particularly reacted to disruptions.

Iron Ore

Minimal impact on seaborne trade from Red Sea disruptions. It is not a major trade route; iron ore is generally carried on Capesize vessels (the clue is in the name), and alternative supplies are ample. Just under 3% (48.22 Mt) of seaborne iron ore trade used the Suez Canal/Red Sea route in 2023.

Coal

Little impact on global trade. At 105.48 Mt, seaborne coal (thermal and metallurgical) trade through the Suez Canal/Red Sea route represented 7.70% of seaborne coal shipments in 2023.

Bauxite

Globally minimal impact, potentially some impact on bauxite flows into the UAE. Almost all West Africa-China bauxite trade uses the Cape route. Only 3.61% (5.62 Mt) of seaborne bauxite trade flowed through the Suez Canal/Red Sea route in 2023.

Steel

Potential for disruption. Backhaul steel cargoes from major Asian producers into the European/Mediterranean market use the Suez Canal/Red Sea route. However, interruption/increased costs on this trade would probably be welcomed by domestic producers in major importers as levelling the playing field with cheaper mills in Asia.

Bab El Mandeb Strait Passings Drop Further As Carriers Reroute Lloyd’s List Intelligence

Key data from Lloyd’s List Intelligence for the week ending February 4, 2024:

• Vessels passing through the Bab el Mandeb strait fell 11% week on week and are down by around 57% compared with the 4-week average prior to Houthi attacks. The most significant drops in terms of vessels types were for bulk carriers and crude oil tankers.

• Suez Canal passings are down 10% week on week, 54% below the average and 51% lower compared with the same period last year.

• For the Cape of Good Hope, transits are up 7% compared with the prior week and 65% year on year.

• There were 235 passings through the Bab el Mandeb strait in the week ending February 4 (including transits where vessels had their Automatic Identification System switched off). This is down 11% from 263 the week before and an average of 542 passings in the period prior to the Houthi attacks, a drop of about 57%. The numbers will be revised slightly upwards next week as more dark transit data becomes available.

• The most significant falls by vessel type were for bulk carriers, down 18% week on week, and for crude oil tankers by almost 40%.

Transit volumes at Suez, Bab el Mandeb and Cape of Good Hope:

Industry associations release updated guidelines for commercial shipping in the Red Sea and Gulf of Aden Maritrace

On 5 February seven industry associations updated their security guidelines for commercial ships navigating the southern Red Sea and Gulf of Aden.

Why have industry guidelines been updated now?

The timing of the new guidelines by BIMCO, CLIA, ICS, IMCA, INTERCARGO, INTERTANKO and OCIMF takes place in the context of ongoing attacks on commercial ships in the Red Sea and Gulf of Aden, the most recent of which was a missile attack on an oil tanker, MARLIN LUANDA, on 26 January which started a fire onboard (all crew were confirmed safe on 27 January) and two attacks on 6 February that fortunately did not result in damage to either vessel. Attacks launched from Yemen are continuing despite military intervention by UK and US in the form of airstrikes on infrastructure believed to be aiding Ansar Allah in their selection of targets. Commercial traffic in the Red Sea and Gulf of Aden has declined after mid December and commercial firms continue to find alternative routes avoiding the Red Sea, adding considerable cost to routine transits.

The threats to shipping do not (yet) fall within the legal definition of interstate conflict. Combined Maritime Forces patrol vessels and others are operating in a surveillance and protective role, not a war-fighting role. The new guidelines are careful to remind ship operators that the ship’s master retains ultimate responsibility for the safety and security of vessel and crew.

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