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Bunker fuel prices across ports in Asia, Middle East tumble

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…Hit fresh 5.5 year lows

Bunker fuel prices across key ports in Asia and the Middle East have hit five-and-a-half-year lows, on the back of crude’s continuing decline and weak demand in some of the ports, Platts data showed this week.

The outright price of Singapore 380 CST ex-wharf bunker fuel fell to its lowest level in 67 months, at $348.50/mt Friday, according to Platts data.

The last time it was lower was on May 18, 2009 when the outright price was assessed by Platts at $340/mt.

Day on day, the grade fell by $12.75/mt, and it has become a familiar scene this week, with prices dropping by $10/mt on average each day, tracking the descent of crude prices.

Demand, despite the low prices, continued to be thin, with buyers saying they were also seeing weak demand from shipowners to whom they would resell the fuel to on a delivered basis.

Buyers also believed the market to be bearish and that prices had not hit the floor just yet, according to trade sources in Singapore Friday.

While the market saw demand fall drastically and credit terms tighten severely in the immediate days after the collapse of OW Bunker, the situation on the credit front has taken a turn for the better, trade sources said.

The bunker supplier filed for bankruptcy protection on November 7, after announcing a loss of at least $275 million due to a combination of fraud and mark-to-market losses.

The market reacted by cutting off open credit terms completely and switching to Letters of Credit (as guaranteed by banks) or dealing on cash terms, said trade sources. But after more than a month of very tight credit terms, the market is now slowly returning to trading on open credit terms, said one seller.

Hopefully this return to open credit will buoy buyers’ interest, trade sources said.

“Everyone needs to sell,” especially with demand having been so poor so far this week, said one Singapore-based trade source.

NORTH ASIA RESPONDING TO LOW PRICES

Prices also fell to fresh lows in the North Asia market, though buyers in these ports were responding to the low prices, unlike those in Singapore, said trade sources in the region Friday.

Traders in North Asia maintained that demand for bunker fuel has improved in November and December, typically the peak demand season in Asia, with the low prices a strong motivation for buyers.

The Hong Kong 380 CST delivered bunker fuel grade was assessed at $365.50/mt, $7/mt lower day-on-day and 10% lower on week. The last time it was lower was May 18, 2009, when it was assessed at $347/mt, Platts data showed.

380 CST delivered bunker fuel in Japan was assessed at $394.50/mt Friday; it was last assessed lower on May 28, 2009 at $383.50/mt. And South Korea 380 CST was assessed at $402.50/mt, down $4/mt on the day and it’s lowest level since May 29, 2009’s $392.50/mt.

The fresh 5.5 year lows were largely attributed to weak crude sentiment, which Citi Future analyst Timothy Evans said was likely a reflection of the market “anticipating some further downward revision to the demand outlook” in the International Energy Agency report later Friday. in the event, the Paris-based agency made a new set of bearish oil market forecasts in its latest monthly report, slashing its estimate for global oil demand growth in 2015 (see story at 1009 GMT).

FUJAIRAH PRICES ALSO AT FRESH LOW

In Fujairah, the outright price of the 380 CST grade on a delivered basis also hit a more than five year low at $359.50/mt on Friday.

The last time it was lower than this was on May 26, 2009, when the outright price was at $353/mt in the key port for bunkering in the Middle East.

Conditions in the Fujairah market were slightly different, with some congestion in barging schedules, and some sellers unable to deliver prior to December 20, which explained why there was some support for prices in the port.

With prices now about $11/mt higher than Singapore, Fujairah’s main competitor for bunkering, sellers would be keen to sell what they can now before buying interest deviates back to Singapore, trade sources said.

Source: Platts

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WAIVER CESSATION: Igbokwe urges NIMASA to evolve stronger collaboration with Ships owners

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…Stresses the need for timely disbursement of N44.6billion CVFF***

Highly revered Nigerian Maritime Lawyer, and Senior Advocate of Nigeria (SAN), Mike Igbokwe has urged the Nigeria Maritime Administration and safety Agency (NIMASA) to partner with ship owners and relevant association in the industry to evolving a more vibrant merchant shipping and cabotage trade regime.

Igbokwe gave the counsel during his paper presentation at the just concluded two-day stakeholders’ meeting on Cabotage waiver restrictions, organized by NIMASA.

“NIMASA and shipowners should develop merchant shipping including cabotage trade. A good start is to partner with the relevant associations in this field, such as the Nigeria Indigenous Shipowners Association (NISA), Shipowners Association of Nigeria (SOAN), Oil Trade Group & Maritime Trade Group of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA).

“A cursory look at their vision, mission and objectives, show that they are willing to improve the maritime sector, not just for their members but for stakeholders in the maritime economy and the country”.

Adding that it is of utmost importance for NIMASA to have a through briefing and regular consultation with ships owners, in other to have insight on the challenges facing the ship owners.

“It is of utmost importance for NIMASA to have a thorough briefing and regular consultations with shipowners, to receive insight on the challenges they face, and how the Agency can assist in solving them and encouraging them to invest and participate in the maritime sector, for its development. 

“NIMASA should see them as partners in progress because, if they do not invest in buying ships and registering them in Nigeria, there would be no Nigerian-owned ships in its Register and NIMASA would be unable to discharge its main objective.

The Maritime lawyer also urged NIMASA  to disburse the Cabotage Vessel Financing Fund (CVFF)that currently stands at about N44.6 billion.

“Lest it be forgotten, what is on the lips of almost every shipowner, is the need to disburse the Cabotage Vessel Financing Fund (the CVFF’), which was established by the Coastal and Inland Shipping Act, 2003. It was established to promote the development of indigenous ship acquisition capacity, by providing financial assistance to Nigerian citizens and shipping companies wholly owned by Nigerian operating in the domestic coastal shipping, to purchase and maintain vessels and build shipping capacity. 

“Research shows that this fund has grown to about N44.6billion; and that due to its non-disbursement, financial institutions have repossessed some vessels, resulting in a 43% reduction of the number of operational indigenous shipping companies in Nigeria, in the past few years. 

“Without beating around the bush, to promote indigenous maritime development, prompt action must be taken by NIMASA to commence the disbursement of this Fund to qualified shipowners pursuant to the extant Cabotage Vessel Financing Fund (“CVFF”) Regulations.

Mike Igbokwe (SAN)

“Indeed, as part of its statutory functions, NIMASA is to enforce and administer the provisions of the Cabotage Act 2003 and develop and implement policies and programmes which will facilitate the growth of local capacity in ownership, manning and construction of ships and other maritime infrastructure. Disbursing the CVFF is one of the ways NIMASA can fulfill this mandate.

“To assist in this task, there must be collaboration between NIMASA, financial institutions, the Minister of Transportation, as contained in the CVFF Regulations that are yet to be implemented”, the legal guru highlighted further. 

He urged the agency to create the right environment for its stakeholders to build on and engender the needed capacities to fill the gaps; and ensure that steps are being taken to solve the challenges being faced by stakeholders.

“Lastly, which is the main reason why we are all here, cessation of ministerial waivers on some cabotage requirements, which I believe is worth applause in favour of NIMASA. 

“This is because it appears that the readiness to obtain/grant waivers had made some of the vessels and their owners engaged in cabotage trade, to become complacent and indifferent in quickly ensuring that they updated their capacities, so as not to require the waivers. 

“The cessation of waivers is a way of forcing the relevant stakeholders of the maritime sector, to find workable solutions within, for maritime development and fill the gaps in the local capacities in 100% Nigerian crewing, ship ownership, and ship building, that had necessitated the existence of the waivers since about 15 years ago, when the Cabotage Act came into being. 

“However, NIMASA must ensure that the right environment is provided for its stakeholders to build and possess the needed capacities to fill the gaps; and ensure that steps are being taken to solve the challenges being faced by stakeholders. Or better still, that they are solved within the next 5 years of its intention to stop granting waivers”, he further explained. 

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Breaking News: The Funeral Rites of Matriarch C. Ogbeifun is Live

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The Burial Ceremony of Engr. Greg Ogbeifun’s mother is live. Watch on the website: www.maritimefirstnewspaper.com and on Youtube: Maritimefirst Newspaper.

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Wind Farm Vessel Collision Leaves 15 Injured

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…As Valles Steamship Orders 112,000 dwt Tanker from South Korea***

A wind farm supply vessel and a cargo ship collided in the Baltic Sea on Tuesday leaving 15 injured.

The Cyprus-flagged 80-meter general cargo ship Raba collided with Denmark-flagged 31-meter wind farm supply vessel World Bora near Rügen Island, about three nautical miles off the coast of Hamburg. 

Many of those injured were service engineers on the wind farm vessel, and 10 were seriously hurt. 

They were headed to Iberdrola’s 350MW Wikinger wind farm. Nine of the people on board the World Bora were employees of Siemens Gamesa, two were employees of Iberdrola and four were crew.

The cause of the incident is not yet known, and no pollution has been reported.

After the collision, the two ships were able to proceed to Rügen under their own power, and the injured were then taken to hospital. 

Lifeboat crews from the German Maritime Search and Rescue Service tended to them prior to their transport to hospital via ambulance and helicopter.

“Iberdrola wishes to thank the rescue services for their diligence and professionalism,” the company said in a statement.

In the meantime, the Hong Kong-based shipowner Valles Steamship has ordered a new 112,000 dwt crude oil tanker from South Korea’s Sumitomo Heavy Industries Marine & Engineering.

Sumitomo is to deliver the Aframax to Valles Steamship by the end of 2020, according to data provided by Asiasis.

The newbuild Aframax will join seven other Aframaxes in Valles Steamship’s fleet. Other ships operated by the company include Panamax bulkers and medium and long range product tankers.

The company’s most-recently delivered unit is the 114,426 dwt Aframax tanker Seagalaxy. The naming and delivery of the tanker took place in February 2019, at Namura Shipbuilding’s yard in Japan.

Maritime Executive with additional report from World Maritime News

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