1. Austal Falls Victim to Cyber Attack.
2 November 2018 : Australia-based shipbuilder Austal confirmed that its Australian business has been hit by a cyber attack which breached the company’s data management systems.
“Following the breach the offender purported to offer certain materials for sale on the internet and engage in extortion,” Austal said, adding that it would not respond to the extortion attempts. The company informed that a small number of stakeholders who were potentially directly impacted have been informed, however, the data breach has had no impact on Austal’s ongoing operations. The company also confirmed that its US business was not affected by the breach.
Austal’s information systems and technology team has restored the security and integrity of the company’s data systems and are implementing additional security measures to prevent further breaches.
2. New shipping regulation may push fuel cost to $70b yearly.
1 November 2018 : Concerns are rife that the new shipping policy of the International Maritime Organisation (IMO) will spike the cost of fuelling ships to about $70 billion yearly.The 2020 sulphur regulation, which will ban ships from using any marine fuel with sulphur content above 0.5 pct effective January 1, 2020, may impose a heavy burden on owners, as the annual fuel costs for the shipping industry are likely to jump by up to $60 billion, including by $10 billion for the container ship sector alone.
As a result, liner companies are transferring a huge portion of the operating costs to shippers, a move that will increase the cost of shipping.However, there are fears in some quarters that some owners might flout the regulations and not invest in compliant fuels, as paying a fine for non-compliance would be much cheaper.
Organisation of the Petroleum Exporting Countries (OPEC), in its recently released Reference Case, assumed that about 70 per cent of shipowners will comply with the new rule that compels them to have scrubbers or switch to low sulphur bunkers or other compliant fuels. Despite IMO’s efforts to enforce the regulation, OPEC expects that there will be up to 30 per cent of non-compliance, due to relatively low level of scrubber penetration as well as the potential lack of compliant fuel.
“Overall, OPEC is bullish about scrubbers. They expect that scrubber penetration will accelerate after a slow start. The year 2018 started with less than 500 vessels that had installed or ordered scrubbers. By 2020, OPEC expects this number to reach 2,000 vessels, growing to 4,500-5,000 vessels in the medium term,” Poten and Partners said in a weekly market report.
“This scenario implies that, while the use of Low Sulphur Fuel Oil (LSFO), and gasoil will initially jump in 2020, the increased penetration of onboard scrubbers will support continued use of High Sulphur Fuel Oil (HSFO) over time.”Due to a lot of uncertainty surrounding the bunker fuel mix, OPEC believes that the global refining industry will be reluctant to make significant investments to make more compliant fuel available, taking the “wait and see approach.”
3. Shipping industry gets on board with plastic fight.
1 November 2018 : The shipping industry has become the latest sector to promise tougher action on plastic waste as concern over the impact of stray plastics on marine life shows little sign of dissipating.
Ships are already barred from dumping plastic in the ocean by the International Convention for the Prevention of Pollution from Ships (MARPOL), but studies have revealed waste from ships is still ending up in the oceans.
Under the action plan the IMO said it would launch a new study into the scale of marine plastic litter still coming from ships, ensure ports have enough capacity to take rubbish from boats, and consider requiring boats to mark up their fishing gear to track perpetrators of illegal net dumping.
It also said the industry would consider implementing a mandatory reporting scheme for any containers lost at sea. All actions would be completed by 2025, IMO said.
The IMO added the action would help it towards meeting targets set out under the UN Sustainable Development Goal 14, which aims to protect “life below water”.
The action plan was adopted at a meeting of the IMO’s Marine Environment Protection Committee in London last week, where talks aimed at accelerating the shipping industry’s progress towards decarbonisation were underway. Reports suggest the climate action talks stalled however, with delegates agreeing to resume discussions in May 2019.
4. Tankers: New refining capacity in India to trigger crude demand.
29 October 2018 : India is gearing up to be one of the major markets for crude oil demand, together with China. In its latest weekly report, shipbroker Gibson noted that “India, along with China has long been revered as a key driver of world oil demand growth. However, higher crude prices and a weaker rupee have seen domestic fuel prices surge. Now, with sanctions imminent against one of India’s largest suppliers, consumers could see further price rises which may impact on their purchasing power. This begs the question; can the crude market really rely on India to drive demand over the coming years in a higher price environment?”
According to the shipbroker, “since the start of 2018, crude prices have risen over 11%. What has become an already expensive time for Indian refiners to import US$ priced crude has been exacerbated by a simultaneous 13% decline of the Indian Rupee vs the US$. This unwelcome mix has meant in real terms, an almost 30% increase in the price of crude for Indian refiners. The Reserve Bank of India recently estimated that for every $10 increase in a barrel of oil, GDP suffers by 0.15%, potentially cannibalising some the anticipated oil demand growth. Furthermore, crude import reliance is rising as domestic production fails to grow. Quite simply, higher crude prices offer zero upside for the Indian economy. To limit the impact, the Government has sought to protect consumers from rising prices through tax cuts on diesel and gasoline this month and has even asked domestic refiners to sacrifice margins in order to limit price rises”.
Categories: News Digest