Dry cargo charter markets are showing signs of recovery after three lean quarters in 2014, and shipowners and operators in multipurpose/project markets hope this bodes well for a continued recovery in 2015.
The rapid expansion in shale gas fracking within the U.S. has resulted in sharp increases in volumes of steel pipe imported into the U.S. Gulf, which has benefitted multipurpose carriers. It remains to be seen, however, whether these volumes will dry up if oil prices don’t rebound after their recent slump, which ironically was brought about by the increased U.S. oil reserves because of shale gas fracking.
The Jan. 1 MARPOL deadline for carriers to use 0.1 percent low-sulfur content fuel in the emission control zone within 200 miles of the U.S. coastline has severe long-term cost implications for carriers, with the current availability of this sulfur content only in marine gas oil that is roughly double the price of the heavy fuel oil ships normally consume on the open seas. That said, the recent drop in oil and bunker prices will offset some of this additional expense in the short term, but it remains to be seen how the supply and demand for 0.1 percent low-low-sulfur fuel will affect carrier fuel costs in the long term.
David Groves, Director, Galborg USA