The most important uncertainties in world trade today are – The Ukraine – Russia war and the Israel war on Gaza against Hamas and Hezbollah in the northern side, the countries that are supporting both Hamas and Hezbollah.

At the Munich Security Conference, US Vice President J.D. Vance made it clear that Europe cannot rely upon US protection as it shifts its focus to the Indo-Pacific. He ruled out Ukraine joining Nato (latest news media report says ‘Zelensky is willing to resign provided Ukraine is accepted as a Nato country) and suggested that it will have to cede territory to Russia if a peace deal is to be struck.

The audience was left in stunned silence. Defence Secretary Peter Hegseth reinforced these assertions at the same conference. Vance observed that Europe’s real enemy is not Russia or other known actors, but the threat is within, from uncontrolled migration and woke culture, both threats to democracy. Days later, the US held bilateral talks with Russia in Riyadh to discuss the outline of a peace deal. Trump is keen to reconcile with Putin, wanted for war crimes and leading a country under G7/EU/Oz sanctions, while he calls

Zelensky a “dictator without elections” and Ukraine a freeloader. Neither Ukraine nor Europe were invited to Riyadh, but each made it clear that it will not respect any arrangement that does not include their involvement.

Trump castigated Zelensky for not holding elections after his term expired in May last year but, under martial law while at war, elections are suspended.

Besides, there are concerns that Russia might engineer a result that elects a pro-Moscow candidate with an anti-Ukraine agenda, shifting any peace settlement greatly in Russia’s favour.

The war started in 2014 with the first Russian invasion and the annexation of Crimea. Trump failed to end it in his first 2016-2020 term. The MSC and Tuesday’s meeting in Riyadh between defence ministers of the US and Russia, Marco Rubio and Sergey Lavrov, gave the strong impression that the US is capitulating and rewarding Russian aggression. It was made abundantly clear that Europe can no longer rely upon US protection and must prioritize defence spending to go it alone, a major fiscal challenge, and an urgent one.

In the meantime, Moscow must be cock-a hoop that it is in the process of being internationally rehabilitated by none other than the US, its old Cold

War rival. The preliminary ‘negotiations’ appear to have been one-sided with the US making major concessions while Putin and Lavrov have given nothing back. Trump is not justifying his claims to be the best dealmaker and his bluster is now overly familiar and may no longer gain concession-by- threat. The speed at which the US is keen to secure a peace deal, no matter how shabby it is, has taken most by surprise.

Rubio said that he may lift Russian sanctions if a deal is done, changing the dynamics of the global oil market. Do we face the prospect that both wars may soon end, even as both peace talks are unravelling. This would have ramifications for vessel supply, as the resumption of short cuts and old trading patterns would cut the ton-mile multiplier.

The status of the vast shadow Tanker fleet would be called into question, with a possible gradual shift back to the compliant fleet leaving many elderly tankers sidelined and in search of employment, end of life care or termination.

The extension of US tariffs to almost all countries and all commodities makes it difficult to assess the prospects for global demand as tit-for-tat moves will make US trading unnecessarily complicated and expensive.  US  tariffs  may  cause  recessions  in

Canada and Mexico and possibly across Europe as countries increase defense spending to counter a real existential threat. As the US recedes, so defense of the realm must be the highest priority. After all, no defense, no realm. Inflation is already showing signs of digging in and this will delay the point at which interest rates can be cut to provide much-needed relief to national exchequers, companies, households and individuals.

We might as well suspend trying to make credible forecasts of future supply-demand balance across shipping sectors. Underwhelming spot earnings render shipping sentiment downbeat while we seek greater clarity on today’s geopolitical, trade and social threats.

The BDI finished the week at 981, up 189 from last week’s close. The BCI closed last Friday at $8,216 up $2,277 since last week. Sentiment varied between early March and later dates across basins.

The North Atlantic maintained a positive outlook, whereas the Pacific routes declined. Support from East Coast Australia boosted the transpacific round voyages. The BPI closed on Friday at $10,527, up

$1,708 since last week.

The Panamax market continued its upward trend. The North Atlantic remained stable, with fronthaul

demand well-supported, though trans-Atlantic activity lagged. In the South, a standoff emerged for mid-March arrivals as bid/offer spreads widened.

Asia stayed strong heading into the weekend, with a surge in Australian activity leading to firmer rates. As tonnage tightened and demand from Southeast Asia and South America grew, rates from Indonesia spiked amid increased fixing opportunities.

The BSI closed at $11,205 up $1,537 since last week. The Atlantic differed across regions. A lack of enquiry in the US Gulf, end-February demand put downward pressure on rates. East Coast South America remained sluggish, though some trans- Atlantic interest was noted.

The Conti-Med market stayed relatively active, though fixing details was limited. The Pacific market maintained a positive outlook this week with healthy demand seen and rates being pushed up. The increased backhaul business also contributed to elevated rates seen in Asia.

The Indian Ocean market continued to remain flat last week with no significant improvements. A 63,000-dwt fixed close to $14,000 per day delivery China for short period. The BHSI closed at $9,616 up $1,118 since last week.

In the Atlantic, sentiment remained positive, strengthened by reported fixtures at improved levels. The Continent witnessed a shortage of specialized open hatch box-shaped vessels on prompt dates, causing Charterers to look to the Mediterranean region for tonnage.

In the South Atlantic, steady activity and stable tonnage, supported by fresh cargo demand, resulting in a slight uptick in rates. Meanwhile, the US Gulf market remained subdued, with unchanged fundamentals. Period enquiry continued to pick up, Owners are now asking upwards of $10,000 for short period on a 32,000-dwt type.

In the Pacific the Handysize market maintained a firm picture. Tightening tonnage in the North Pacific and continued weather disruptions in Southeast China caused vessel schedule delays. Consequently, some Charterers are securing prompt vessels at higher rates. Fresh inquiries from Australia have decreased, spot Charterers in S.E. Asia have raised their rates, keeping them strong in the region. There was also increased interest in period charters; a 28,000 dwt vessel open in China, was fixed for 3-5 months at $9,000.

The market is beginning to defrost, and this is encouraging bringing more positivity in the secondhand market.

It is premature to talk of a recovery in values, but to some extent the dive is starting to flatten out. The Kamsarmax Ellina (82,612-dwt, 2008 Tsuneishi Zhoushan) sold for a respectable $12.75m – in line with the same age Betty’s Dream (Tsuneishi Fukuyama) that sold at the end of last year at

$12.9m.

This gives a general trend that indicates there is currently plenty of competition for good quality Kamsarmax tonnage as was demonstrated by the sale at better-than-expected values for the Chronos quartet of vessels at the end of last month.

Post-Panamaxes however are now at a significant discount to the Kamsarmaxes, as is usual in a depressed freight environment. Cora Oldendorff (93,005-dwt,  2012  Taizhou  CATIC)  is  sold  at

$13.8m, despite being scrubber-fitted. The Petalon (87,328-dwt,  2010  Hudong)  is  reported  sold  at

$10.9m with her surveys due.

For the Ultramaxes, Sagar Kanta (60,835-dwt, 2013 Oshinma) achieved a slightly better than expected

$20.1m. Supramax turnover is rising. The Japanese-controlled Pacific Infinity (56,104 dwt, 2012 Oshima) achieved a premium $16.8m due to her boxhold configuration.

The Crown58 design Bittern (57,809-dwt, 2009 Dayang) likewise benefitted from a better design and a scrubber to get $11.5m. The older Diamond53 design Spar Lynx (53,162-dwt, 2005 Chengxi) is sold for $8m with her surveys due.

• Capesize: A quiet start to the week in the Pacific, with not all of the miners immediately returning to the market following recent weather disruption, but some cautious positivity crept back into the market as the week continued, with activity for early March picking up. In the Atlantic, a burst of activity out of Brazil spurred some optimism though the North was generally more quiet.

• Panamax: The Pacific market kicked off on the front foot this week with solid demand and tighter tonnage; Nopac and Australia saw supportive enquiry, while sentiment was positive despite a lengthy tonnage list in the East. Sentiment and

gains in paper also supported the Atlantic, though by the end of the week it looked as though fresh enquiry would be needed to sustain the positivity.

• Handy: Handy rates in the Continent picked up this week amid tight tonnage for scrap runs to the E. Med, while the USG and ECSA were quiet. In the Pacific, last week’s late push in Nopac set the tone, while Indo and Aus were active.

Sweeping US Plan to target Chinese Ships would snare many non-Chinese operators

• The US Plans to charge upto $1.5 mio for every port call by a Chinese-built ship
• Chinese vessel operators such as Cosco would be charged upto $1 mio per US port call
• Any ship operator that has even a single Chinese-built ship or a single newbuilding at a Chinese yard could face a new US port fee of

$500,000 per call for all of its vessels.

The US Trade Representative’s proposal that targets Chinese maritime and shipbuilding interests is extremely aggressive and represents the largest financial threat to vessel operators thus far during the Trump administration. Major implications for all US import and export trades in all shipping sectors can be expected.

The sweeping proposal — also includes new US export cargo preference rules — is in response to the USTR investigation into Chinese shipbuilding and maritime practices initiated in March 2024 at the behest of US labour unions. The USTR determined in January that China engaged in unfair practices.

The USTR is accepting public comment on its action plan through March 24, when it will hold a public hearing. The decision on whether to move

forward will ultimately be up to one person: US President Donald Trump.

The USTR action plan would sharply increase costs for a large number of vessels calling at US ports, costs that would be passed along to US importers and exporters via surcharges (in the case of Container shipping), charter party clauses (in the case of bulk commodity shipping) or higher freight rates due to curtailment of US services.

Targeting Chinese operators

Container lines make multiple port calls per US service loop, which would multiply the fees. For example, Asia-US east coast container services typically make two to three US port calls, equating to a charge of $2m-$3m for every service loop.

In addition to being a major owner of very large crude carriers, Cosco is a member of container shipping’s Ocean Alliance, together with France’s CMA-CGM,  Taiwan’s Evergreen and Cosco subsidiary OOCL. Alliance members share ships and slots. Ocean Alliance is the world’s largest container shipping alliance and has a major footprint in US import and export supply chains.

In addition, other shipping lines have vessel-sharing agreements with the Ocean Alliance. Ocean Network Express has a VSA with the Ocean Alliance in the Mediterranean-US east coast trade.

Targeting operators with Chinese-built ships

Lloyd’s List Intelligence data showed that only 9% of Chinese-built ships called in the US in 1Q24

• and these vessels could be redeployed to non- US services.

However, the new USTR proposal would go after any operator with any Chinese-built ships in its fleet

• even if those vessels do not call in the US
• erasing the ability of operators to avoid US port fees via redeployments.

For all ship operators, port fees would be based on the share of Chinese-built ships in their global fleets.

For those with 50% of more Chinese-built ships in their on-the-water fleet, each US port call (for any ship) would cost that operator $1m. For those with fleets of 26-49% Chinese-built ships, the port fee would be $750,000 per call. For those with over 0% and up to 25% — i.e., including a single Chinese- built ship that never calls in the US that was purchased years ago — the operator would pay

$500,000 per port call for any of the ships in its fleet.

There is also an alternate proposal to charge $1m per port call for operators with fleets with 25% or more Chinese-built ships, an alternative that ship operators would certainly favour over the first one.

The way that the USTR proposal is written, it appears that the $1m port fee charged to Chinese maritime transport operators like Cosco is in addition to the port fee for operators of Chinese- built ships (although one way to read the language is that it maxes out at $1.5m per call).

A workaround for some ship operators could be to separate Chinese-built and non-Chinese-built ships into different operating companies, and only call in the US with the operating company that does not own Chinese-built ships.

If so, this would accelerate the bifurcation of global shipping that is already well underway — the rise of so-called “parallel” fleets.

Targeting operators with ships on order in China

The fees don’t stop at Chinese maritime companies and Chinese-built ships on the water. There’s more.

The USTR proposal calls for port fees to be charged to any operators with ships built at Chinese yards that are ordered or expected to be delivered “within the next 24 months” (following a final rule implementation).

These are described as “additional fees”, implying, as the language is currently written, that they are on top of port fees for operators of Chinese-built ships

already on the water, and on top of fees for Chinese maritime transport operators.

Creating new US export cargo preference

The	SHIPS	for	America	Act     — which
was	introduced	in  the	last US	Congress and is

expected to be reintroduced in the current one

• included cargo preference rules for both US exports and imports. The USTR proposal includes cargo preferences for US exports.

Starting at the date of implementation, it calls for at least 1% of all US exports per year — meaning all container, dry bulk and tanker shipments — to be carried aboard US-flagged vessels of US operators.

Beginning two years after implementation, it requires 3% of US exports on US-flagged ships of US operators. Starting in year three, the percentage goes up to 5%, with 3% on US-built vessels (which do not exist yet in sufficient numbers).

In year seven and thereafter, it would require at least 15% of US exports to be transported by US- flagged and US-operated vessels, with 5% on US- built vessels.

For this cargo-preference schedule to work, it would first require a large number of foreign- flagged  vessels  to  be  reflagged  to  the  US,

raising the question of whether there would be sufficient US crew to man those ships.

It would then require a massive wave of US shipbuilding with shorter delivery schedules than have historically been the case. US yards have not built a new tanker since 2017. They have not built a liquefied natural gas carrier since 1980.

Singapore aims to build world’s largest automated port at Tuas

Singapore is working to create a massive, fully automated “port of the future,” tapping artificial intelligence and other cutting-edge tech to buoy the city-state’s position as a crucial shipping hub. Tuas Port will be the nexus of a well- integrated Tuas ecosystem, covering the vibrant business and industrial districts in the Western region.

Russia has ordered divers to inspect ships in its ports, a government letter seen by Reuters shows, after suspected attacks on four oil tankers that visited in recent weeks.

At the same time the Russian navy will help protect from the threat of drones and unmanned vessels, it said.

Three oil tankers around the Mediterranean, and another in the Russian Baltic, have been damaged by blasts in the last month.

All four had recently called at Russian ports, according to shipping sources and ship tracking data.

The causes of the incidents remain unclear.

Italy has launched a terrorism investigation after two explosions blew a hole below the waterline of the Greek-operated oil tanker Sea Jewel while it was anchored on Saturday off the southern port of Savona-Vado and discharging oil.

Container spot freight rates on the major east-west liner trades experienced another week of decline, as slack demand continued to depress pricing.

The Drewry’s World Container Index’s (WCI) composite global rate showed a week-on-week decline of 10%, to $2,795 per 40ft, dragging overall rates down to a level last seen in April last year, shortly before an early peak season on the Asia- Europe trades led to an upsurge in spot rates.

Memories of difficulties to organize Ship’s crew or their re-patriation from some ports during the Covid- 19 pandemic come to mind with the latest news :

• Medical Alert Covid-Like Bat Virus Discovered by Researchers in Chinese Lab
  • Virus hasn’t been seen in humans yet, but vaccine stocks rose
  • New coronavirus enters cells in similar fashion as Covid
  • Researchers at the Wuhan Institute of Virology in China said they discovered a new coronavirus in bats that enters cells using the same gateway as the virus that causes Covid-

19. This virus hasn’t been detected in humans, merely identified in a laboratory. Word of the discovery lifted the shares of some vaccine makers Friday. Moderna Inc. rose as much as 6.6% Friday afternoon and Novavax Inc. rose as much as 7.8%. American depositary receipts of BioNTech SE, Pfizer Inc.’s Covid vaccine partner, climbed as much as 5.1%. Pfizer gained as much as 2.6%. The lab finding does raise the possibility that this new bat virus could spread from animals to humans, researchers said in a paper published Tuesday in the journal Cell. The Wuhan virus research center is known for its work on bat corona-viruses. One theory of how the Covid pandemic began is that it leaked from that lab, perhaps through an infected worker. Institute researchers have previously denied working on any viruses that

could have started the pandemic. The US in 2023 halted funding for the lab, which had received money through the US-based EcoHealth Alliance, amid the controversy. This newly discovered bat virus infects cells by binding to a protein found throughout the bodies of humans and other mammals. It’s closely related to the coronavirus family that causes Middle East respiratory syndrome. That virus, also known as MERS, has been confirmed in around 2,600 people globally from 2012 through May 2024, killing roughly 36% of those infected. The vast majority of the cases were in Saudi Arabia, according to the World Health Organization website.

• https://www.bloomberg.com/news/articles/202 5-02-21/covid-like-bat-virus-discovered-by- researchers-in-chinese-lab

Meta Dives Into the Undersea Cable Business

Meta has announced Project Waterworth, an undersea cable system it calls “the longest 24 fiber pair cable project in the world.” The initiative aims to enhance global internet connectivity by linking five continents.

A key goal of the project is to support AI innovation by improving data transfer capabilities. Meta believes this infrastructure will help power AI-

driven applications and expand access to emerging technologies.

“Project Waterworth” will cost billions and take years to build

The undersea cable will stretch more than 50,000 kilometers (30,700 miles), longer than the circumference of the Earth. The company did not specify how much time the project would take to complete but did give “multi-year” as a benchmark. Similarly, they gave a “multi-billion dollar” estimate of its cost.

The cable represents “three new oceanic corridors,” Meta Vice President of Engineering Gaya Nagarajan and Global Head of Network Investments Alex-Handrah Aimé wrote in a blog post.

Meta says its routing technology was the first of its kind and maximizes the amount of cable laid in deep water. At its deepest, Project Waterworth will run up to 7,000 meters (22,966 feet, or more than 4.3 miles) below the ocean’s surface. It will connect the U.S., Brazil, South Africa, India, and Australia. This depth is very close to the heights of Mountain peaks like : Manaslu 8163m; Lhotse 8516m; Dhaulagiri 8167m; Nanga Parbat 8126m and the Tallest Mount Everest 8849m.

“As AI continues to transform industries and societies around the world, it’s clear that capacity, resilience, and global reach are more important than ever to support leading infrastructure”. “With Project Waterworth we can help ensure that the benefits of AI and other emerging technologies are available to everyone, regardless of where they live or work.”

Undersea fiber-optic cables enable data to be transmitted between continents separated by the ocean. Meta has laid more than 20 undersea cables, many of which use 24 fiber pairs instead of the standard 8 to 16 fiber pairs used in other contemporary cables.

How strong is LNG bunkering demand :

Huge market evolution on cards in next three years. LNG Bunkering is getting more traction. The number of LNG Dual-fuelled newbuildings being contracted took a sharp turn upwards from mid 2024 with 264 ordered, more than double of the previous year. There are now more ports offering bunkering of the fuel – 198 at the last count, and there have been atleast 7 LNG bunker orders in the first 2 months of this year, half of the total ordered in whole of 2024. Golden Union teams up with leasing newcomer SeaKapital on LNG bunker vessels.

-Container lines seek to stop the rot as spot freight rates drop 20%.

-New safety shift in PANPAC/PAL offshore lightering operations.

-‘Unsafe’ Tankers in EU crosshairs on third anniversary of Ukraine invasion.

-Ammonia will follow in footsteps of established gas shipping markets. Paper trading is pointing towards the growth of ammonia shipping mirroring the rise in the transport of other gases, according to Adnoc Logistics and Services. The Shipowner is among the companies that have invested in very large ammonia carriers (VLAC’s), a new asset class that

has attracted significant orders during the past couple of years.

-China’s economic slowdown raises questions for Tankers. After 20 years of driving the market, Chinese companies pulled forward peak demand forecasts. The numbers are big. Sales of LNG- fuelled trucks in China more than doubled in the first five months of last year, while domestic industry figures show electric vehicle sales surging more than 40% in 2024. All that while Chinese economic growth slowed, pushing some prominent Chinese oil companies to pull forward their peak Oil demand forecasts late last year. Sinokor raises VLCC exposure with AET deal as market awaits clarity on Iran.

Baltic Exchange Capesize 182 Index

C5TC 182 Weighted TC Average 13,118 + 397

Baltic Exchange Capesize Index

5TC Weighted TC Average 8,620 plus 404

Baltic Exchange Supramax Asia Index

S3TC Weighted TC Average 11,727 plus 213

Baltic Exchange Panamax 82 Asia Index Average for one S. China RV 10,994 plus 294

• The upcoming Mega Project on Great Nicobar Island fails all tests of sustainability – Social, economic and ecological. Socially, it will oust indigenous people from their homeland and possibly destroy them. Economically, the viability of the Transhipment port is suspect. Ecologically, it is eminently obvious that the project bodes an environment catastrophe for the Island. The project’s big plan when examined from all angles appears simply to be short-term profits from resource-gouging, with easy pickings for builders, contractors, consultants and loggers, whether a container port or housing colony ever comes up. What then is the reason for the Government to announce a project worth Rs.81,000 crores for the Great Nicobar while plain vanilla development work like Hospitals, water, sanitation languish in Port Blair, just 500kms to it’s North.

Marex Media

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