Possibly the Worst Quarter on Zero DSV Utilisation
According to a research note released today from UOB Kay Hian, Singapore offshore vessel operator Pacific Radiance achieved an ominous vessel utilization of 0% for its diving support vessel fleet in the second quarter of 2015. "OSV activities are recovering on more stable oil prices but E&P spending cuts are hampering a strong rebound. There is also 0 utilization for DSV segment in 2Q15," says the note. Pacific Radiance is talking delivery of 6 vessels in 2H15 instead of 8, which is in response to the low tender activity for OSV vessels.
Asian Floating Storage Declines as Crude Market Tightens
Strong demand is tightening the market but rising US output could sap efforts to rebalance market. The amount of oil stored on tankers around Singapore has dropped sharply in the last months, the latest indication that OPEC-led supply cuts are successfully tightening crude markets even as U.S. exports have soared. Shipping data in Thomson Reuters Eikon shows around 15 super-tankers are currently filled with oil in waters off Singapore and western Malaysia, storing around 30 million barrels of crude.
INEOS to Ship US Ethane to China in 2019
U.K. chemicals firm INEOS said it has entered a long-term supply agreement with Singapore-based SP Chemicals to ship ethane from U.S. shale gas to China for the first time starting in 2019. “This is another world first for INEOS after importing shale gas to Europe in 2015,” said David Thompson, CEO of INEOS Trading and Shipping. “By bringing in U.S. The deal involves the construction of a 95,000cbm capacity Very Large Ethane Carrier (VLEC), which is expected to be the world’s largest ethane carrier upon its delivery in 2019. The VLEC will be built under the management of the JACCAR Group.
Ship Building Supply Glut Bites China's Shipyards
Chinese shipyards register a 49% plunge in first half 2012 orders. 'Gulf News' informs that China has 1,536 shipyards with annual sales of more than five million yuan ($780,000), according to the China Association of the National Shipbuilding Industry. Shipbuilding and shipping capacity surged because of speculation fuelled by China’s demand for raw materials. The government also provided low-cost financing for new vessels to help support shipyards. That combination contributed to a global surge in orders from about 2007, including for dry-bulk ships, used to haul iron ore and coal. These vessels and cooling demand are now hammering charter rates. The benchmark Baltic Dry Index has dropped 26 per cent in the past year to 958 yesterday. It reached a high of 11,793 in May 2008.