This week, the spectre of an anti-corruption probe looms over the Chinese ship leasing sector and the buyer of BP’s product tankers is revealed; and we explore why the LNG product market is a tight fit and visions of shipping’s future.
The details are murky, yet Chinese anti-corruption authorities appear to be continuing and expanding existing probes into ship leasing firms, with new arrests added to those TradeWinds reported earlier this year. Minsheng Financial Leasing’s head of shipping was dismissed and is understood to be in custody over “discipline violations” and the head of shipping for Bank of Communications Financial Leasing Fang Xiuzhi was also reportedly taken away from his office. The worry for some is that greater scrutiny of overseas deals could dampen newbuilding activity.
This week, an answer to a burning question was finally revealed. Who is BP selling its eight product tankers to? Anna Angelicoussis-controlled Pantheon Tankers Management, it turns out. The oil major had originally intended to sell the ships to South Korea’s Kukje Maritime Investment, but that deal fell through. There is said to be a huge appetite for such vessels in the market at the moment.
Meanwhile, the LNG market is said to be ‘as tight as slim-fit jeans’ at the moment. Flex LNG suggested that a single LNG cargo loaded in the US can be worth $144m more by the time it arrives in European markets. An upcoming stronger-than-average predicted Atlantic hurricane season is expected to exacerbate this trend through route disruption.
Falling spot rates and a decline in share values this year are not enough to temper the animal spirits that have seen container shipping firms pull in record profits in recent times. Ongoing port congestion and supply chain disruption suggests the party is set to continue for the foreseeable future. This disruption has led to about 10% of global container ship capacity being underutilised, according to analysts.
TradeWinds recently got to hear the insights of the next generation of shipping executives, traders and financiers as students of the prestigious Bayes Business School shared their vision of the future. The students were pitching their ideas to a panel of judges in a bid to snare a £500 cash prize.
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