S Korea’s Hanwha buys US’ Philly Shipyard for $100mn
South Korean conglomerate Hanwha's subsidiaries have signed a contract to buy US-based Philly Shipyard for $100mn, marking Hanwha's entry into the US shipbuilding industry.
The deal is expected to be finalised by this year's fourth quarter, subject to regulatory approvals and fulfilment of other conditions, Philly Shipyard said on 20 June. This acquisition will make Hanwha the first South Korean firm to enter the US market, according to Hanwha.
Hanwha Ocean plans to diversify its sales by securing overseas production bases. "We will expand beyond the Middle East, southeast Asia and Europe to the US market," said Hanwha Systems chief executive Sung-chul Eoh.
Philly Shipyard is a subsidiary of Norwegian industrial investment company Aker, specialising in building commercial ships that operate off the coast of the US mainland in accordance with the US' Jones Act. The Jones Act is a longstanding US law that requires shipments between two US ports to be done on US-flagged, US-built and US-crewed ships. Philadelphia-based Philly Shipyard has built about 50pc of all large Jones Act-compliant commercial vessels, such as tankers and container vessels, in the US since 2000.
Rising demand for new vessels, particularly LNG carriers and oil tankers, and limited shipyard capacity have driven investments in shipyards and newbuild vessels.
Higher freight because of shifting trade flows, stretched voyage times because of Cape of Good Hope reroutes in response to the Red Sea conflict have also encouraged tanker shipowners to increase their orders for new builds.
Argus-assessed freight rates for 75,000t Long Range 2 shipments from the Mideast Gulf to Japan year-to-date average rose to $54.64/t on 20 June compared with an average of $40.29/t in 2023.
Expectations of rising tanker demand, a limited order book until recently and an ageing tanker fleet further encouraged shipowners to renew their fleet, a market participant said. Around 18pc of the world tanker capacity is likely to be over 19 years old by 2025, according to shipbroker Braemar. Crude tanker demand in 2024 will increase by 6.5-7.5pc compared with a 5.5pc increase in 2023, shipping association Bimco forecasts.
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Flooding closes upper Mississippi locks
Flooding closes upper Mississippi locks
Houston, 8 July (Argus) — High water levels in the Mississippi River have caused all lock and dams to close between Bellevue, Iowa, and Gladstone, Illinois, according to the US Army Corps of Engineers (Corps). Lock and Dams (L&D) 12-18 are closed as of 8 July, the Corps said. Water levels have reached the top of L&D 12 in Bellevue and L&D 11 in Dubuque, according to the National Weather Service. The outflow at L&D 16 was at 255,000 cubic feet per second (cfs) as of 8 July, about 68pc more than the average of 80,000cfs this time of year, the Corps said. It will be another two weeks until L&D 20 reopens, but L&Ds 11-15 could reopen as early as this weekend, the Corps said. About 15 inches of rain fell in Dubuque over the past week, bringing the expected forecast up to 22.1ft, according to the National Oceanic and Atmospheric Administration. Flooding at Dubuque and other locations along the river are expected to drop from major to moderate levels this week. L&D 19 reopened on 8 July as it fellow flood stage at 16ft, the Corps said. L&Ds 19, 21, and 22 are expected to remain open. The river widens around the locks, allowing for a greater outflow at higher water levels. By Trajan Greenwell Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Beryl enters GOM, heading towards Texas: Update
Beryl enters GOM, heading towards Texas: Update
Updates hurricane watch and status of Texas ports and lightering zones. New York, 5 July (Argus) — Hurricane Beryl weakened to a tropical storm as it crossed the Yucatan Peninsula and entered the Gulf of Mexico on Friday afternoon, with a likely second landfall in Texas on Monday. Maximum sustained winds have dropped to near 65mph, the National Hurricane Center said in a 5pm ET advisory, but the tropical storm is forecast to strengthen to a hurricane again as it moves over the Gulf of Mexico, with forecasts pointing to a landfall late Sunday or early Monday from far northeastern Mexico to the eastern Texas coast. The National Hurricane Center issued a hurricane watch from the mouth of the Rio Grande River to Sargent, Texas, about 80 miles southwest of Houston. Heavy rainfall of 4-8 inches is expected by Sunday into next week. The US Coast Guard changed the status of the port of Corpus Christi, Texas — a key US oil export hub — to "X-ray" at 3pm ET Friday, meaning gale force winds are expected to arrive at the port within 48 hours. All commercial traffic and transfer operations can continue during X-ray, but the Coast Guard said ocean-going commercial vessels greater than 500 gross tons should make plans to depart the port. Corpus Christi is also home to three refineries totaling 800,000 b/d of capacity. Citgo said it is implementing its hurricane preparedness plan at its 165,000 b/d refinery there. The ports of Houston, Texas City, Galveston and Freeport were set to port condition Whiskey at 5:05pm ET Friday, meaning gale force winds are expected to arrive within 72 hours. The ports remain open to all commercial traffic. Ship-to-ship transfers off the Texas coast proceeded as normal on Friday but will be postponed off Corpus Christi beginning Sunday. The US National Weather Service (NWS) forecast winds up to 90mph and waves up to 32 ft at the Corpus Christi lightering area on Sunday and Monday before calmer conditions return Tuesday. Ship-to-ship transfers are expected to be postponed at the Galveston Offshore Lightering Area early next week due to the same conditions. Most of Mexico's Gulf coast ports were closed today and many offshore oil production operations. The impact to US Gulf oil and gas operations so far appears to be limited, with BP determining forecasts "indicate Hurricane Beryl no longer poses a significant threat" to its offshore platforms in the Gulf of Mexico. Shell had taken the precaution of shutting in production and evacuating all staff from its Perdido platform and its Whale development, which is scheduled to begin operations later this year. "We have safely paused some of our drilling operations, but there are currently no other impacts on our production across the Gulf of Mexico," the company said late on Thursday. Earlier this week, Beryl was a Category 5 storm, which made it the strongest on record for the month of July, as it left a trail of destruction in the Caribbean. By Stephen Cunningham, Tray Swanson and Nathan Risser Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US services contract in June, signal broad weakening
US services contract in June, signal broad weakening
Houston, 3 July (Argus) — Economic activity in the US services sector contracted in June by the most since 2020 while a report earlier this week showed contraction in manufacturing, signaling a broad-based slowdown in the economy as the second quarter came to an end. The Institute for Supply Management's (ISM) services purchasing managers index (PMI) registered 48.8 in June, down from 53.8 in May. Readings above 50 signal expansion, while those below 50 signal contraction for the services economy. The June services PMI "indicates the overall economy is contracting for the first time in 17 months," ISM said. "The decrease in the composite index in June is a result of notably lower business activity, a contraction in new orders for the second time since May 2020 and continued contraction in employment." The business activity/production index fell to 49.6 from 61.2. New orders fell by 6.8 points to 47.3. Employment fell by 1 point to 46.1. Monthly PMI reports can be volatile, but a services PMI above 49 over time generally indicates an expansion of the overall economy. "Survey respondents report that in general, business is flat or lower, and although inflation is easing, some commodities have significantly higher costs," ISM said. The prices index fell by 1.8 points to 56.3, showing slowing but robust price gains. ISM's manufacturing PMI fell to 48.5 in June from 48.7 in May, ISM reported on 1 July. It was the third consecutive month of contraction and marked a 19th month of contraction in the past 20 months. Wednesday's weaker than expected ISM report, together with a Wednesday report showing initial jobless claims last week rose to their highest in two years, slightly increase the odds that the Federal Reserve may lower its target rate later this year after maintaining it at 23-year highs since last year in an effort to stem inflation. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Vancouver crude exports up fourfold in June
Vancouver crude exports up fourfold in June
Houston, 2 July (Argus) — Crude oil exports on Canada's Pacific coast quadrupled in June, the first full calendar month with ship loadings on the expanded Trans Mountain pipeline system, according to data from Vortexa. About 300,000 b/d of crude was exported from the port of Vancouver last month, up from 75,000 b/d in May and up nearly ninefold from 35,000 b/d in June 2023, according to Vortexa. The 590,000 b/d Trans Mountain Expansion (TMX) project began commercial service on 1 May, nearly tripling the capacity of the pipeline system to 890,000 b/d, though the first TMX cargo loaded on 20 May . Up to 250,000 b/d of crude from Trans Mountain can also go to Washington state on the Puget Sound pipeline system. Of the 19 Aframaxes that had discharged TMX crude by 1 July, nine discharged onto very large crude carriers (VLCCs) at the Pacific Area Lightering (PAL) zone, six discharged at ports on the US west coast and three went directly to China, according to Kpler data. Three remained in transit for either Los Angeles or PAL as of 2 July. Another Aframax, operated by Unipec, partially discharged at Long Beach, next to Los Angeles, before topping off a VLCC at PAL. Prior to TMX, two to four Aframaxes per month discharged Canadian crude at ports on the US west coast. According to Kpler, four VLCCs departed PAL with Canadian crude for destinations in Asia-Pacific: the Eagle Verona , which co-loaded one 550,000 bl cargo of Access Western Blend (AWB) with 1.5mn bl of Colombian Castilla destined for China; the Advantage Value , which has three 550,000 bl cargoes of AWB destined for India; the Cosrich Lake , which has four cargoes of TMX crude totaling 1.75mn bl destined for China; and the New Pearl , which co-loaded two 550,000 bl cargoes of AWB with Ecuadorian crude destined for China. Of the 22 Aframax voyages from Vancouver in June, half went on time-chartered vessels and the other half went on spot market tonnage, including rehired time-chartered vessels. Freight rates to ship Cold Lake from Vancouver last month averaged $2.25/bl for voyages to the US west coast and $6.33/bl for voyages directly to China, according to Argus data. Over the same span, the cost to reverse lighter, or transfer, three 550,000 bl shipments of Cold Lake from Vancouver onto a VLCC at PAL then onward to China averaged about $7.075mn lumpsum, or $4.32/bl, excluding demurrage costs, according to Argus estimates. The heavy nature of Canadian crude and Aframax draft restrictions in Vancouver may complicate fully loading a 2mn bl VLCC. Twenty-nine Aframaxes are expected to be available to load in Vancouver throughout July, of which 17 are time-chartered and 12 are spot market vessels. Time-chartered ships can still be relet for use by other shippers. By Tray Swanson Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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