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CONTAINERS DOWN 🔽 & TANKERS UP 🔼 | 2022 Q4 Numbers In & Outlook for 2023​

Feb 17, 2023


In this episode, Sal Mercogliano - maritime historian at Campbell University (@campbelluniversity) and former merchant mariner - discusses the latest news and Q4 results for the container sector and the vastly different results for the tanker market. 14:01
 
The five supermajor oil companies have become incredibly efficient in generating cash from oil and gas production, enabling record payouts to shareholders. But why is capital investment lagging?

Production fell by around 900 mboe/d between 2013 and 2022, mainly due to a combination of the forced exit from Russia and divestments of higher cost production, yet operating cashflow increased from US$171bn in 2013 to US$283bn in 2022. That is an increase from $30 to $53 for every barrel produced, on an oil price 7% lower.

How has this transformation in cash generation capability happened? It is a combination of factors – lower operating costs through divestment of higher cost assets, increased operational uptime and efficiency, relatively higher natural gas prices, bigger oil and gas trading operations, lower supply chain costs, and slimmed down organisations.


www.westwoodenergy.com

Westwood Insight – Supermajor cashflow and the capex conundrum - Westwood

www.westwoodenergy.com www.westwoodenergy.com
 
CIGUENA/ROSARIO, Argentina (Reuters) - In the Argentine town of Ciguena, rancher Andrés Betiger is fighting to keep his farm from going under amid the South American country's worst drought in sixty years, which has pummeled soy, corn and wheat crops and dented cattle herds.

To get water, Betiger travels 52 kilometers (32 miles) with a tank and rickety tractor that often breaks down, a reflection of how the arid weather since last year has weighed on farmers, who have delay planting and even abandoned crops.

 

The Financial Stability Aspects of Commodities Markets​


The commodities ecosystem is heterogeneous, opaque, and has several key financial vulnerabilities.

Russia’s invasion of Ukraine in February 2022 produced dislocations in several commodities markets, whose prices surged and became more volatile. The shock affected a broad range of commodities, with the price of European natural gas and industrial metals doubling, oil prices surging by more than 30% and wheat prices also rising sharply, albeit a few months later.

This volatility led to a spike in margin calls on commodities derivatives contracts, particularly in Europe, resulting in an increased demand for liquidity to meet those calls. The commodities ecosystem as a whole was largely able to absorb the shock. There were no major disruptions to market functioning – with the exception of the London Metal Exchange nickel market – and there was a limited impact on the rest of the financial system. However, these events exposed the complex linkages between commodities markets and the financial system that involve a varied array of commodities traders and producers, financial intermediaries and end-users.

The report presents an overview of a few globally traded commodities markets that are of particular economic importance at the current juncture (crude oil, natural gas, and wheat) and examines their vulnerabilities, focusing on the mechanisms through which any further stresses in these markets could propagate more broadly through the financial system. The report also identifies a number of data gaps that hamper the assessment of vulnerabilities and transmission channels in the commodities sector.

The report explains how the commodities ecosystem has adapted to the February 2022 shock and concludes with learnings and policy implications. A number of the vulnerabilities and channels of contagion discussed in this report – including leverage, impact of large margin calls on liquidity demand and market opacity – are not unique to commodities markets. Many of these issues are being addressed in the FSB’s work programme to enhance the resilience of non-bank financial intermediation.
Click to expand...

www.fsb.org

The Financial Stability Aspects of Commodities Markets

Report provides an overview of commodities markets, focusing on the mechanisms through which stresses in these markets could propagate through the financial system, and discusses policy implications.
www.fsb.org

^ contains link to the actual report as a .PDF document

h/t:
...
The G20's financial watchdog highlighted three areas of concern — the concentration of the commodities ecosystem, widespread use of leverage, and geopolitical tensions.

"The use of leverage can lead to liquidity stress in the event of margin calls on derivatives positions and collateral calls on short-term borrowing," the report explained. "There is opacity in some areas of the commodities sector, including OTC derivatives markets where it is difficult to obtain a full picture of the size or network of exposures across jurisdictions."

On heightened geopolitical tensions and macroeconomic uncertainty in an environment of tightening financial conditions, the report noted the increased risk of more price shocks in the commodity space.

"In the event that this happens, several important channels of contagion could become salient. CCPs and clearing members would need to make further margin calls, banks may choose to limit their credit exposures, and market participants might cut back their trading in both cleared and non-cleared markets," the report said. "These actions … could exacerbate liquidity mismatches in markets, thereby propagating shocks in commodities markets and perhaps the financial system more broadly."
Click to expand...

www.kitco.com

Risk of more commodity price shocks ahead, warns G20 watchdog

www.kitco.com
 
In the efforts to develop new sustainable forms of marine fuel, Japan’s Mitsui O.S.K. Lines (MOL) reports it will undertake the first test of a new form of liquified bio-methane (LBM) to fuel a coastal LNG vessel. The unique product is an advanced form of fuel used by farmers for years derived from cow manure.

maritime-executive.com

MOL Tests Fuel Made of Cow Manure to Power Coastal LNG Ship

In the efforts to develop new sustainable forms of marine fuel, Japan’s Mitsui O.S.K. Lines (MOL) reports it will undertake the first test of a new fo...
maritime-executive.com maritime-executive.com
 
A feeder ship owned by South Korean operator Sinokor has been sold for what was described as a “bullish” scrap price, as cash buyers bet on a revival of ship demolition in Bangladesh.

The 1997-built 1,608 teu Xiumei Shanghai, chartered to Sinokor subsidiary Heung-A Line, was sold for $4.66m.

theloadstar.com

Feeder vessel fetches 'bullish' price as cash buyers bet on scrapping boom - The Loadstar

A Sinokor feeder ship has been sold for a bullish scrap price, as cash buyers bet on a revival of ship demolition in Bangladesh
theloadstar.com theloadstar.com
 
finance.yahoo.com

Shipping Hedge Fund Boss Says Industry Set for Another Boom Year

(Bloomberg) -- A shipping hedge fund founded by a one-time ally of oil tanker billionaire John Fredriksen says the industry is set for another boom year because of the reopening of China’s economy and a lack of fleet expansion.Most Read from BloombergApple Makes Major Progress on No-Prick Blood...
finance.yahoo.com finance.yahoo.com


seekingalpha.com

Diana Shipping Q4 2022 Earnings: Dividend Stability, Bullish Stance (NYSE:DSX)

Diana Shipping is a pure play time charterer in the dry bulk industry and, as such, its returns tend to lag behind more spot-oriented players. Find out why DSX stock is a Buy.
seekingalpha.com seekingalpha.com
 

Small fleets, owner-operators struggle living off current spot market​

Feb. 24, 2023

Regular reports from two data groups and load boards add to the perspective of an OOIDA survey of independent operators, saying the market is 'soft' and the weakest it has been since the lockdown period of the COVID-19 pandemic.

Scott Achelpohl

A freshly updated freight rate survey lends even more credence to the pain that small fleets and owner-operators have felt for the past year trying to do business by relying on the volatile spot market and with prices for diesel fuel at all-time highs.

The survey—distributed on Feb. 22 by the Owner-Operator Independent Drivers Association and conducted annually by the OOIDA Foundation, the small-trucking advocate’s research, safety, and education arm—contains some eye-popping testimony about what business life has been like for smaller operators in 2022 going into 2023, as the spot market continues to slump but fuel prices recover.

 

Port of Los Angeles' Gene Seroka Breaks Down State of Shipping in U.S. | Better Call Sal!​

Feb 24, 2023


In this episode, Sal Mercogliano - maritime historian at Campbell University (@campbelledu) and former merchant mariner - discusses the current state of US shipping, the recent appearance of Port of Los Angeles Executive Director Gene Seroka, and the labor situation in West Coast ports. 17:04
 

gCaptain OpEd: US Navy Shipbuilding Has A BIG Badger Problem​


by Captain John Konrad (gCaptain) Shipbuilding and repair in America is in crisis. Every large ship built here costs multiples of what it would cost to build them in Asia and most government ships are well behind schedule and over budget. US Shipyards shoulder much of the blame and in recent testimony, the US Chief Of Naval Operations promised Congress the navy would take measures to prevent profiteering. Last week in a lengthy exposé the New York Times pulled on the thread accusing shipbuilding lobbyists of working against the needs of the Navy to generate larger profits. But how big are shipyard profits and is lobbying the biggest problem facing shipbuilding efforts today?

gcaptain.com

gCaptain OpEd: US Navy Shipbuilding Has A BIG Badger Problem

by Captain John Konrad (gCaptain) Shipbuilding and repair in America is in crisis. Every large ship built here costs multiples of what it would cost to build them in Asia and most government ships are well behind schedule and over budget. US Shipyards shoulder much of the blame and in recent...
gcaptain.com gcaptain.com
 
www.financialmirror.com

‘FuelEU’ crucial for sustainable shipping - Financial Mirror

The FuelEU Maritime regulation is crucial for promoting the uptake of sustainable and scalable fuels in shipping, ECSA President Philippos Philis said. As the guest speaker at the Cyprus Marine Club monthly meeting, Philis discussed the “Latest EU shipping developments”, focusing on the European...
www.financialmirror.com www.financialmirror.com
 

Trump Eggs and Trump Water are Coming — John Rubino​

Feb 28, 2023


31:56

Access John’s substack channel here https://rubino.substack.com

Stronger than expected jobs and inflation data will force the Fed to keep tightening for a while.

Mortgage rates approaching 7% and home sales are collapsing. Prices normally follow sales down so housing is toast. Miami condo are potentially a danger spot in the hot Florida market.

Recession is now a lock. Leading indicators way down, yield curve sharply inverted, money supply shrinking, credit card debt soaring. Not a single growth engine in sight.

With 5% yields on short-term debt instruments and 2% yield on S&P stocks, why own stocks now?

Many, many large bankruptcies are on the way. Carvana and Bed Bath and Beyond as well as numerous others.

Gold and silver are down, but are still in danger if the economy tanks. 2008 all over again?

Interesting uranium news. France is leading a coalition of European countries demanding that nuclear be counted as "green." That will increase demand for uranium.

The contrast between Trump's and mayor Pete's East Palestine visits it pretty funny.

Global inflation, brutal in the UK:
 
The first phase of construction contracts has been awarded for the world’s first man-made “energy island,” to be built by Belgium as part of a plan to develop an integrated European offshore electricity grid. After a year-long process, the contract was awarded to a Belgian consortium between Jan de Nul and DEME that will utilize their specialized fleets and long-experience in offshore construction.

maritime-executive.com

Construction Contract Awarded for Belgium’s Man-Made “Energy Island”

The first phase of construction contracts has been awarded for the world’s first man-made “energy island,” to be built by Belgium as part of a plan to...
maritime-executive.com maritime-executive.com
 

Scrap Metal Prices: Surprise in Steel Prices​

Streamed live on Mar 1, 2023


9:26

📈 Check Scrap Prices: https://iScrapApp.com/ - And a very unexpected turn of events, we have seen steel prices increase $30-$50 per ton over the last few weeks. As oil prices have increased slightly was treated we started to see the consumption of steel increase. After the earthquake that hit Turkey, we expected to see more of a pullback in steel pricing, and the exact opposite has happened.

👉 Read more: https://iscrapapp.com/?p=1227235
 

Chinese Cranes in the US | Trojan Horses? | Are ZPMC Ship-to-Shore Cranes Spying on America?​

Mar 6, 2023


In this episode, Sal Mercogliano - maritime historian at Campbell University (@campbelledu) and former merchant mariner - discusses the March 5, 2023 Wall Street Journal story on the use of Chinese ZPMC ship-to-shore cranes in the United States and whether or not they are spying tools. He also discusses other concerns regarding the cranes, including cyber threats and the effort to curtail their use through the proposed Port Crane Security and Inspection Act of 2022. 15:17

Pentagon Sees Giant Cargo Cranes as Possible Chinese Spying Tools https://www.wsj.com/articles/pentagon...

What If Chinese Cranes Stopped Moving American Cargo? • What If Chinese C...
Supply chain pain may lurk in container crane bill https://www.freightwaves.com/news/sup...
Cargotec and Konecranes Abandon $5 Billion Merger Plan Over Competition Concerns https://gcaptain.com/cargotec-and-kon...
Probe: Caltrans cut corners to get Bay Bridge built https://www.mercurynews.com/2014/06/0...
 

Logistics Wins Wars: A Deep Dive Into War In The Pacific​

March 7, 2023

This week, the United States Marine Corps Commandant made a bold and urgent call to prioritize logistics at sea in the Pacific theater. However, it’s concerning that the rest of the US Military has placed an unreasonable emphasis on air logistics while neglecting the now skeletal remains of the US Merchant Marine. It’s time for a realistic assessment of our current logistics capabilities in the Pacific and to explore new opportunities. This article takes a full and unvarnished look at military logistics and highlights ways the US Secretary of Defense and US Secretary of Transportation can take immediate action to strengthen seaborne logistical capabilities in the Pacific.

“Infantry wins battles, logistics wins wars.” Army General John J. Pershing,

by Captain John Konrad (gCaptain) Last year, in response to House Speaker Nancy Pelosi’s visit to Taiwan, the People’s Liberation Army Navy conducted a large-scale exercise demonstrating their plans to use fast civilian ferries for an invasion of Taiwan. In light of this potential threat, it’s crucial for the US Navy to leverage insights from Ukraine and the Marine Corps’ Force Design 2030 to develop a cost-effective, yet highly capable ship that can aid allied forces in times of need. With the right approach, the US Navy can create a ship that combines the advantages of fast civilian ferries with the lessons learned from past conflicts to ensure national security and safeguard global stability but there are a lot of complexities surrounding the problem so we need to take a deep dive into the subject of sealift and war.

Full article:

gcaptain.com

Logistics Wins Wars: A Deep Dive Into War In The Pacific

This week, the United States Marine Corps Commandant made a bold and urgent call to prioritize logistics at sea in the Pacific theater. However, it’s concerning that the rest of...
gcaptain.com gcaptain.com
 

Scrap Metal Prices: How Fed Rates Are Affecting Scrap Prices​

Streamed live 18 minutes ago


15:35

📈 Check Scrap Prices: https://iScrapApp.com/ - If anyone follows the Federal Reserve, you would’ve heard about increased interest rates. That immediately caused stocks to drop, and copper prices have dropped about $0.24 since we spoke last. These are the crazy market turns that we continue to discuss that affect us daily in the scrap industry.
👉 Read more: https://iscrapapp.com/?p=1227235
🤝 How to negotiate prices: https://iscrapapp.com/blog/how-to-neg...
 

FSO Safer to Be Offloaded via a United Nations Very Large Crude Carrier (VLCC) | High Seas Treaty​

Mar 10, 2023


11:11

In this episode, Sal Mercogliano - maritime historian at Campbell University and former merchant mariner - discusses the United Nation's purchase of a Very Large Crude Carrier (VLCC) supertanker to offload the decaying FSO (Floating Storage and Offload) Safer off the coast of Yemen, which has been abandoned since 2015 due to war in region. Questions involve who will operate the new UN tanker, what registry will it operate under, how the operation will be conducted and what is the ultimate plan for the vessel after the operation. The UN also secured a new High Seas Treaty on biodiversity that now heads to countries for ratification.

- UN Plan for the FSO Safer Tanker Stop the Red Sea Catastrophe https://www.un.org/StopRedSeaSpill
- UN Secures Euronav Tanker to Offload Oil from Decaying ‘FSO Safer’ in Red Sea https://gcaptain.com/un-secures-euron...
- UN buys Euronav VLCC as operation to move oil from decaying FSO gets moving https://splash247.com/un-buys-euronav...
- UN Buys Euronav Tanker to Replace Failing FSO Safer in Yemen https://www.maritime-executive.com/ar...
- Nations Secure U.N. Global High Seas Biodiversity Pact https://gcaptain.com/nations-secure-u...
 
TAIPEI – Taiwanese shipping giant Evergreen Marine has done it again.

After making headlines for rewarding employees last December with massive year-end bonuses worth up to 52 months’ pay, it will next give its workers mid-year bonuses worth another 10 to 11 months of salary for their 2022 performance.

www.straitstimes.com

Taiwan shipping giant Evergreen to give staff 11-month mid-year bonus after massive year-end payout

This comes after up to 52 months' year-end bonuses were given out in December 2022. Read more at straitstimes.com.
www.straitstimes.com www.straitstimes.com
 
news.un.org

UN stresses ‘full commitment’ to Ukraine grain deal as Russia offers 60-day extension

The UN chief on Monday confirmed the UN would “do everything possible to preserve the integrity” of the Black Sea Grain Initiative – the deal agreed between Ukraine and Russia last July that is due to expire in just a few days.
news.un.org news.un.org

www.reuters.com

Turkey wants 120-day extension of grain deal -defence minister

Turkey will continue discussions to extend a deal that allows grain shipments from Ukraine's Black Sea ports for 120 days rather than 60 days, Turkish Defence Minister Hulusi Akar said on Wednesday.
www.reuters.com www.reuters.com
 
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