Suspected Pirates Detained after More Attacks off Somalia

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…As Drewry maintains Crude Tanker Rates to Further Drop in 2018***

Six suspected pirates were detained following attacks on a 52,000 tonne containership and a fishing vessel, which reportedly took place on November 17 and 18 in the Southern Somali Basin.

EU Naval Force (EU NAVFOR) informed that its Somalia flagship, the Italian vessel ITS Virginio Fasan, apprehended the six crew of a motor whaler, acting as mother ship, and detained a skiff after the events in an area known for piracy incidents occurred.

During the incidents a number of rocket propelled grenades were fired at the containership. However, adherence to BMP4, the presence of a security team on one of the vessels, and good seamanship avoided any damage or injuries, and all crew and vessels are now safe, EU NAVFOR informed.

The suspects were seized after their vessels were located and positive visual verification was made.

A legal process was launched for the suspected pirates to be transferred to the appropriate authority for prosecution.

In the meantime, following a sharp decline in crude tanker freight rates seen during 2017, the rates are set to further drop in 2018 amid an expected slowdown in China’s crude stocking activity, shipping consultancy Drewry said.

Although tonnage supply growth in the crude tanker market is expected to come down to 3.2% in 2018 after surging by close to 6% each year in 2016 and 2017, this will not be enough to push tonnage utilisation rates higher as demand growth is expected to be sluggish.

The rates will continue to drop next year on account of a slowdown in crude oil trade growth as global oil demand growth is set to fall to 1.4 mbpd in 2018 from 1.6 mbpd in 2017. In addition to this, a likely slowdown in China’s stocking activity poses a big risk to tonnage demand in the crude tanker market.

China’s stocking activity, which remained one of the leading factors behind the strong growth in the crude oil trade over the last two years, may fall significantly in 2018.

According to the IEA’s data on China’s implied stock changes, the country should have accumulated close to 520 million barrels since 2015, well above the total special petroleum reserve (SPR) capacity that was supposed to fully come online by 2020. A sharp decline in stocking activity in the third quarter of this year to 0.5 mbpd from 1.2 mbpd in the second quarter suggests that a significant decrease in the inventory build-up by China could be witnessed in 2018.

“We expect China’s stocking activity to decline to 0.25 mbpd in 2018 from an average 0.75 mbpd in 2017, curbing global trade growth,” Rajesh Verma, Drewry’s lead analyst for tanker shipping, said.

The anticipated decline, added to a slowdown in worldwide oil demand, “will keep global crude oil trade growth modest in 2018, which in turn will keep rates under pressure despite some slowdown in fleet growth,” Verma added.

World Maritime News