Japanese shipowner Mitsui OSK Lines (MOL) is joining forces with Cyprus-based dry bulk specialist SMT Shipping to jointly explore options for shipping direct reduced iron (DRI).
Interest in DRI produced by reducing iron ore with natural gas or hydrogen is developing as the steel sector ramps up attempts to reduce CO2 emissions.
MOL, which has been delivering iron ore to steel industries for many years, said that shipping of DRI requires specialised skills and care to prevent overheating and that SMT, with a fleet of over 65 vessels involved in shipping and transshipment of dry bulk cargo, is a world leader in this field.
SMT has delivered transshipment solutions at an export operation of iron ore in Sierra Leone since 2021 and an import of iron ore in Trinidad since 2018.
The two companies have signed a memorandum of understanding under which MOL committed to bolster the transport capacity of DRI to address increasing demand with necessary safety measures in collaboration with SMT Shipping.
“To produce steel via DRI requires high-grade iron ore, not just in terms of Fe content, but also low impurity, something that is spurring the development of the huge Simandou iron ore mine in West Africa,” Derek Langston, global head of dry cargo research at Braemar told the nearly 600 delegates attending last year’s Geneva Dry.
With this green transition, Langston said: “There are going to be new trades emerging. There are going to be new centres of steel production,” suggesting both the Middle East and Australia would become more prominent as steel manufacturers.
New York-listed Greek shipowner Costamare has moved to spin off its dry bulk operation into a separate publicly traded company.
The new company Costamare Bulkers Holdings is expected to launch this year and to be listed on the New York Stock Exchange.
The outfit will own nearly 40 vessels in addition to the dry bulk trading platform CBI consisting of around 50 chartered-in newcastlemaxes, capes and kamsarmaxes.
Costamare brand will remain as a standalone boxship tonnage provider, with a fleet that currently counts 68 vessels.
The company said that splitting up the businesses would deliver two separate, pure-play investment opportunities for different investors, a simplified structure, improved financial flexibility to pursue distinct operating priorities and enable the management of both companies to enhance focus on individualised opportunities.
Konstantinos Konstantakopoulos-led Costamare entered the dry sector with the acquisition of 16 vessels between 33,000 dwt and 85,000 dwt in 2021.
Copenhagen-headquartered offshore wind installation player Cadeler has signed a firm contract with an undisclosed client for one of its newbuild vessels for work at an offshore wind farm in the United States.
This will be the first time Cadeler’s second P-Class newbuild vessel, Wind Pace, will be deployed following its anticipated delivery.
The work is scheduled to begin in the second quarter of 2025 and the vessel will be committed under this contract until the first quarter of 2026. This will be the company’s second offshore wind project in US waters.
The value of the contract to Cadeler is estimated to be between €67m and €75m ($69.6m and $77.9m).
February has been an active month for the Danish firm. In the first week, the company signed two contracts with undisclosed clients for its newbuild M-Class wind installation vessel Wind Mover.
The vessel, currently under construction at Hanwha Ocean Shipyard in Korea, will support operations, maintenance activities, and potential installation work in Europe. The vessel is scheduled for delivery in the fourth quarter of 2025.
Only days later, Cadeler signed a vessel reservation agreement with Ocean Winds. The contract is for installing and transporting around 30 wind turbine generators at the BC-Wind offshore wind farm in the Polish Baltic Sea using one of its O-Class vessels.
Shuttle tanker player KNOT Offshore Partners has agreed a new swap dead with parent Knutsen NYK Offshore Tankers (KNOT) that will see the company add a modern suezmax in exchange for its nine years older panamax unit.
The New York-listed firm is buying the 2021-built 152,800 dwt Live Knutsen from KNOT while selling its 2012-built 59,000 dwt shuttle taker, Dan Sabia.
The purchase price for the Live Knutsen is $100m less $73.4m of outstanding debt plus $0.35m of capitalised fees related to the credit facility secured by the vessel. The partnership is selling the Dan Sabia for $25.75m.
KNOT Offshore Partners operates a fleet of 18 ships primarily under long-term charters in the offshore oil production regions of the North Sea and Brazil.
The Live Knutsen is currently in Brazil fixed to Galp Sinopec until November 2026, but with extension options for a further six years.
The company has been looking at options for its smaller-size vessel Dan Sabia, following the expiry of its bareboat charter to Transpetro and redelivery last July. Several possibilities were explored including redeployment in the tightening Brazilian market, deployment to the North Sea, charter to Knutsen NYK, short-term conventional tanker work and sale.
Last September, the two companies agreed on a similar deal for the 2021-built 152,800 dwt suezmax Tuva Knutsen and 2011-built 57,600 dwt shuttle taker, Dan Cisne.
“We are pleased to have once again agreed a vessel swap that grows and concentrates our fleet in the most in-demand shuttle tanker class, reduces our average fleet age, and improves our long-term charter pipeline, all without a requirement for new funding. Our focus remains on securing long-term employment with high-quality counterparties that provide the partnership with stable, predictable cashflows,” said Derek Lowe, CEO of KNOT Offshore Partners.
Thirteen days on from its grounding off Newfoundland, salvors are struggling to work out how to remove the MSC Baltic III from the icy, stormy shoreline near Lark Harbour.
With reports emerging of a hull breach, and the ship carrying 1,710 tonnes of heavy fuel oil, local media is reporting the authorities are looking at repairing an old road to access the remote site and give salvors another option to remove cargoes in a bid to get the wedged ship afloat.
The MSC Baltic III lost power outside the entrance of Bay of Islands, the crew issuing a mayday, with the 22-year-old ship running aground in Wild Cove west of Lark Harbour. The crew were successfully airlifted off the ship.
As the week comes to an end there’s signs that the dry bulk markets – led by capes – are picking up finally. Will this mini-revival be sustainable all the way through to the end of April when Geneva Dry, the global dry bulk summit, returns for its second edition?
Alexis Ellender, the lead analyst covering dry bulk for Kpler, reckons a seasonal improvement in cargo availability should have supported a firming in dry bulk markets by late April.
Ellender is bullish on the outlook for Brazilian soybean exports, forecasting shipments to be up near 3% year-on-year in Q2. Higher vessel demand, plus associated port congestion, should boost panamax/kamsarmax earnings, he says.
As for cape rates, while expecting them to be firmer come the end of April, Ellender says earnings will likely be more in the region they were back in 2023, not last year.
There are downside risks to the demand outlook for geared vessels, Ellender warns. China and India are expected to import less seaborne coal this year than last, with a drop of around 60m tonnes year-on-year anticipated across the two countries combined, Kpler is forecasting.
Turning off your AIS does not make you disappear anymore
Meanwhile tariffs and trade barriers are set to slow the trade in steel products, Ellender cautions. Both of these would hit Pacific demand hardest, with Indonesia coal and Chinese steel product shipments likely to be affected.
Geneva Dry has a strong tech focus, with a big team from Kpler, one of the world’s top maritime and commodities analytics companies, due to attend Geneva Dry on April 28 and 29.
“For a long time, shipping was an industry that thrived in the shadows. Market information was guarded by those in the know and very few, if any, had a full picture of what was happening,” Ellender recounts.
Technological advances and improved data analysis tools mean this is no longer the case, he says.
“We now know what almost every vessel is doing,” he says, something that was demonstrated over the past year by the ease with which the shadow fleet of vessels linked to sanctioned countries and cargoes was identified and tracked.
“Turning off your AIS does not make you disappear anymore. We have additional data sources and analytical techniques that mean there is nowhere to hide,” he says.
Ellender will be speaking at the EVs And The Supercharging Of Dry Bulk session of April 28, an hour’s look at how electric vehicles are changing seaborne trading patterns, joining a host of charterers and shipowners on stage for a brand new panel.
Demand for aluminium for use in vehicle manufacturing is set to increase supporting further growth in West Africa-China capesize bauxite trade, Ellender reckons, while he anticipates nickel exports from Southeast Asia will remain firm in the medium term and bulk copper concentrate shipments from South America to China will continue to support Pacific round-voyage trade for geared vessels.
As for what the Kpler man is most looking forward to about the upcoming dry bulk summit, Ellender quickly replies: “Showing the dry bulk market that better data and global trade intelligence are their friends and can make money.”
Geneva Dry brings together all elements of the commodities shipping sector to host the ultimate dry bulk shipping event.
Split into sectors, panels will bring together analysts, financiers, miners, traders and shipowners to discuss where the markets are headed. Sessions include:
Minor Bulks
Agri-commodities
Coal
Iron Ore
Decarbonisation
The full Geneva Dry agenda can be accessed here. Geneva Dry registration, at just $780, can be accessed here. Special Geneva Dry hotel room rates can be found here.
Australian oil and gas player Karoon Energy has bought the Cidade de Itajaí FPSO for $115m from Altera & Ocyan, the joint venture formed by the Brazilian company Ocyan and Altera Infrastructure.
The FPSO was bought by Karoon’s wholly-owned Brazilian subsidiary Karoon Petróleo & Gás. The deal also includes approximately $8m of transaction costs.
The unit was previously owned and operated by Altera & Ocyan and leased by Karoon for work on the Aussie firm’s Baúna project in the Santos Basin off Brazil. The acquisition is subject to customary approvals and the transaction is set to close by April 30, 2025.
The unit has been operating on the Baúna project since the field came onstream in 2013. It was built in 1985 and converted to an FPSO in 2012. It has a fluid handling capacity of around 80,000 barrels of liquid per day and a storage capacity of approximately 631,000 barrels of oil.
Karoon revealed that it would contract a new contractor to operate and maintain the FPSO on its behalf, while its Brazilian subsidiary will take over the overall ownership and strategic optimisation plans for the unit.
The process of selecting a new contractor has already commenced. The selection is set to be made by mid-2025. Altera & Ocyan will continue to operate the FPSO until the new contractor is ready to take over operations and maintenance services.
The acquisition is expected to be funded from existing cash on hand, subject to the timing of closing and near term cashflow. A deposit of $30m has been paid into an escrow account and the balance is payable on closing.
“The purchase is economically attractive, generating significant value for shareholders with an expected rate of return comfortably above our mid-teens post-tax hurdle rate and potentially more than 20%. Most importantly, it provides certainty on the availability of the FPSO for the Baúna Project through to the end of field life,” said Julian Fowles, Karoon’s CEO and managing director.
The acquisition of the FPSO is also expected to result in approximately a $4-6/bbl net unit operating cost reduction. The savings are anticipated to be realised from 2026 onwards.
The expected decrease in operating costs and certainty of the long-term availability of the vessel should allow the field to operate profitably well into the 2030s. According to the company, this will enable access to a portion of the 8.7 – 16.4mbbl of Baúna’s contingent resource (1C to 3C), subject to further technical and commercial evaluation.
While much of the world is pushing back from carrying live animals by sea, one South American nation is gearing up to return to the livestock trades after a 52-year absence.
Argentina has repealed a 1973 ban on livestock exports saying the decision was based the Javier Milii-led government policy to promote “an economic system based on free decisions, adopted in an area of free competition, with respect for private property and the constitutional principles of free circulation of goods, services, and labour.”
Argentina is already one of the world’s leading exporters of frozen beef with the Agriculture, Livestock and Fisheries Secretariat of the Ministry of Economy stating yesterday that the meat sector has emerged as a pillar of the country’s economic growth.
In recent years, following a series of exposés into the industry, many nations have slapped significant restrictions on the livestock shipping business.
The global livestock export fleet has just over 100 vessels remaining – some of which have been idle for a while. The oldest ship still actively trading had its 60th birthday last year with the average age of the global livestock carrier fleet now a very ancient 39 years old.
The European Union has unveiled its Clean Industrial Deal that will prioritise the domestic production of renewable fuels for aviation and shipping, among a host of measures worth more than EUR100bn designed to green many industry sectors.
“The EU needs to secure access to such materials and reduce dependence on unreliable suppliers. Integrating circularity in our decarbonisation strategy is crucial to making the most of the EU’s limited resources,” the bloc stated in a release.
Contained in the deal is the launch of a new mechanism under the European Hydrogen Bank to de-risk investments in fuels for shipping.
European shipowners strongly welcomed the recognition of shipping under the five sectors across which the Clean Industrial Deal should be implemented.
“Leveraging EU and national ETS revenues is essential to build industrial capacity in Europe and to bridge the immense price gap between conventional and clean fuels that can be up to five times more expensive. In this regard, grants- and auctions-as-a-service mechanisms can help pool national ETS revenues to support these objectives,” stated a release from the European Community Shipowners’ Associations (ECSA).
“EU member states must use the 9bn of the shipping ETS revenues to support the production of clean fuels. We also urge the commission to cut red tape and ensure an international level playing field,” urged Sotiris Raptis, ECSA secretary-general.
“We’re really pleased to see investments in renewable energy, green hydrogen, and clean transport infrastructure prioritised today,” said Joe Kramek, World Shipping Council (WSC) president and CEO.
“If the Clean Industrial Deal is fully realised, it represents an opportunity for Europe to strengthen its position as a global shipping hub. As one of the world’s largest exporters, the EU’s economic power and global influence depend on shipping. However, without the necessary investment and commitment, the EU risks being left behind,” Kramek said.
Faig Abbasov, shipping director at NGO Transport&Environment, said: “The Clean Industrial Deal is a step in the right direction, recognising the essential role that green hydrogen-derived fuels play in decarbonising shipping and aviation. But it lacks essential details on how the EU is going to bridge the price gap between fossil fuels and greener alternatives or address the need for larger and longer term offtake commitments.”
“The Clean Industrial Deal has the makings of a robust blueprint for getting the EU clean and competitive, including in the shipping industry. Cheap energy is the bedrock of industrialisation and instrumental to the green transition, provided cost reductions do not take precedence over decarbonisation,” saids Aurelia Leeuw, director of EU policy at the SASHA Coalition, an NGO fording green links between aviation and shipping.
Norway’s Golden Energy Offshore Services (GEOS) has won a batch of deals for three of its vessels with unnamed international majors.
GEOS said in an Oslo Bors filing that it secured a firm deal for the 2019-built multipurpose support vessel (MPSV) Energy Dutchess until September 1, 2025, with one six-month extension option.
The company also won a term deal for either the 2015-built Energy Paradise or Energy Pace PSVs, depending on availability, until April 16, 2026. The deal also includes a one-year extension option.
The final deal is an extension for the 2016-built Energy Passion platform supplier. It will be busy until March 1, 2026. The contract has an extension option pencilled in and could keep the vessel on hire for one more year.
The gross contract value for the firm periods is $21m with an additional $27.7m for the option periods. All contracts have already started.
The company’s current backlog stands at $27m firm and an additional $46.9m option periods.
At the start of the month, GEOS secured a long-term charter deal for its 2021-built Energy Savannah MPSV taken under management last year. The company fixed the vessel to Swiss-based subsea services player Deepwave for two years.
