COSCO Shipping is pressing ahead with its massive newbuilding programme in the dry bulk segment.
The Chinese state-owned shipping giant has partnered up with Everbright Financial Leasing for 10 kamsarmax newbuilds, which will be built at Jiangsu Hantong Ship Heavy Industry.
Financial details and delivery dates for the 82,000 dwt vessels, which will be leased to companies owned by COSCO Shipping Bulk, have not been disclosed.
The latest deal follows COSCO’s largest shipbuilding order for 42 bulk carriers worth over $1.8bn, spread across its affiliated COSCO Shipping Heavy Industry and CSSC Chengxi Shipyard in September and eight newcastlemax newbuildings at Jiangsu Hantong in August.
Swedish police on Thursday boarded the Yi Peng 3, a 23-year-old panamax bulker owned by Ningbo Yipeng Shipping and linked to the severing of two data cables in the Baltic Sea after being invited by Chinese authorities.
The vessel has been wanted for questioning by Sweden as the top suspect in the severing of the Swedish-Lithuanian and Finnish-German fibre-optic cables in November.
Since the incident, it has been anchored in the Kattegat Sea while diplomats in Stockholm and Beijing discussed access to the vessel. Swedish Prime Minister Ulf Kristersson said they requested China’s cooperation in the investigation back in late November but noted that there was no accusation of any sort directed at China.
The Swedish police said in a statement that they were on board the bulker as observers, while Chinese authorities conducted investigations. Danish authorities facilitated the visit. It is understood that representatives from Germany, Finland, and Denmark also boarded the ship.
They also stated that “no investigative measures are carried out” by the Swedish Police Authority while on board the ship.
“The preliminary investigation into sabotage of the two cable breaks in the Baltic Sea continues,” the police authority added.
The preliminary investigation began in November. The police authorities in Finland, Sweden, and Lithuania set up a joint team to investigate the cause of the damage to the cables. The investigation is led by Sweden’s state prosecutor Henrik Söderman of the country’s unit against international and organized crime.
The Swedish Police Authority pointed out that the investigations carried out on the ship on Thursday were not part of the preliminary investigation.
Earlier this week, Norway’s TV 2 and Sweden’s TV 4 revealed underwater footage which further reinforced suspicions of sabotage of the two cables. Underwater drone operations conducted by the television stations and Blueye Robotics revealed a broad, dark drag mark on the seabed where the Yi Peng 3 passed over Danish data cables.
The Census Bureau released its updated population estimates with data through July 2024 today, which corrected its vastly underestimated figure of immigrants for the past few years.
The prior Census Bureau data had so inadequately measured the tsunami of immigrants in 2021 through 2024 that it left policy makers, such as the Fed, in the dark about the supply of labor, employment, etc. To provide some insights, the Congressional Budget Office released its own estimates of population growth earlier this year, by incorporating data from Immigration and Customs Enforcement.
Today’s data by the Census Bureau confirms that it was truly a tsunami of immigrants that washed over the land. And now it’s official.
The US population surged by 8 million people in the three years from July 2021 through July 2024, to 340.1 million, according to the updated estimates from the Census Bureau today.
The 3.3 million net increase over the 12 months through July 2024 was the largest in decades. And the biggest portion of increases came from net-immigration (those that came in minus those that left or were removed):
2022: +1.92 million, incl. 1.69 million net immigration
2023: +2.80 million, incl. 2.29 million net immigration
2024: +3.31 million, incl. 2.79 million net immigration
In terms of the 2.79 million net immigration in the 12 months through July 2024, the Census Bureau said in its note about the improved methodology that this was “significantly higher than our previous estimates, in large part because we’ve improved our methodology to better capture the recent fluctuations in net international migration,” by among other things using “newly available administrative data [including from the Department of State Bureau of Consular Affairs and Refugee Processing Center; and from Homeland Security] to adjust the usually survey-based estimates of foreign-born immigration.”
“Improved integration of federal data sources on immigration has enhanced our estimates methodology,” The Census Bureau said.
In percentage terms, the population increased by nearly 1% over the 12 months through July 2024, the biggest percentage increase since 2001.
Over the three years through July 2024, the population increased by 2.4% (by 8.0 million people):
Coming Up-Revisions of Total Employment & Labor Force.
Early next year, the Bureau of Labor Statistics will incorporate these new population data into its employment-related data obtained from the household survey and substantially revise up its figures for labor force, total employment, and unemployment, and the metrics derived from those.
The household survey data – labor force, employment, unemployment, etc. – has been in the fog for two years due to this large underestimation of the working new arrivals and new arrivals still looking for work.
For the BLS employment data, legal status of the workers is irrelevant. It’s not even part of the data.
The newly arrived immigrants who either already have a job or are looking for a job count in the labor force, regardless of legal status. If they’re working, they count as workers, regardless of legal status. Those that have not found a job yet, but are looking for a job, show up as unemployed regardless of legal status.
So we expect large up-revisions of overall employment, the labor force, unemployment, and related metrics.
But the up-revisions might not move the unemployment rate much since they would largely cancel out in the calculation of the unemployment rate: up-revised number of unemployed divided by up-revised labor force.
The up-revision should re-establish the historic difference between total employment, which is based on the household survey and population data (red line in the chart below) and nonfarm payroll jobs, based on data from establishments (blue).
That long-established and normally fairly stable difference between total employment and nonfarm payrolls is mostly caused by certain self-employed workers and farm workers not being included in nonfarm payrolls, but being included in total employment.
By not adequately accounting for the newly arrived immigrant workers, total employment (red) stopped growing and even declined a little since early 2023, while nonfarm payrolls have continued to rise at a solid pace as employers reported their immigrant workers on the establishment surveys (blue).
The coming up-revision of total employment in the household survey should raise the red line and re-establish the typical difference to the blue line.
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Existing home sales rise from multi-decade rock-bottom, still -34% from 2021, -22% from 2019. Supply highest for November since 2018, days on market highest since 2019.
Sales of existing single-family houses, townhouses, condos, and co-ops that closed in November fell to 315,000 homes, according to data from the National Association of Realtors today. During the holiday period – from November through January – sales always drop from the prior months and reach the yearly low in January, and inventories drop too as people pull their homes off the market over the holidays.
Year-over-year, sales rose by 5.0% not seasonally adjusted, from the collapsed sales that closed in November last year after mortgage rates had briefly hit 8%. But compared to November 2021, sales were down by 37%. That’s the extent of demand destruction brought about by too-high prices.
The seasonally adjusted annual rate of sales, which attempts to iron out the seasonal decline over the holidays and multiplies this out to a 12-month period, rose by 4.8% in November from October to an annual rate of 4.15 million homes. This was still down by 34% from the same period in 2021 and by 22% from 2019, wobbling along the bottom for two years (historic data via YCharts):
Buyers’ strike leads to lowest annual sales since 1995.
The demand destruction in 2024 has been even larger than during the Housing Bust. With today’s actual sales figures for November (not seasonally adjusted), the WOLF STREET estimate for the whole year 2024 comes in at 4.04 million sales, the lowest since 1995, below even the worst years during the Housing Bust.
During the Housing Bust, demand destruction was caused by an economic and financial meltdown that had been preceded by years of reckless mortgage lending that then came home to roost and turned into the mortgage crisis.
But the 2023 and 2024 demand destruction was caused by a gigantic spike in prices – the NAR’s national median price shot up by nearly 50% from June 2019 through June 2022 – and then in 2023, mortgage rates returned to normal-ish levels in the 6%-7% range, up from the pandemic’s free-money range of less than 3% (historical data from YCharts).
Getting used to 6% to 7% mortgage rates.
The real estate industry has now given up on trying to outwait those mortgage rates and is exhorting sellers and buyers to get used to “a new normal of mortgage rates between 6% and 7%,” as the NAR put it today.
These 6% to 7% mortgage rates are of course the old normal mortgage rates that prevailed in the decades before the money-printing era of 2008 through 2021, and they’re unlikely to go back to the pandemic range.
Fannie Mae, the largest Government Sponsored Enterprise that buys and guarantees mortgages, came out earlier this month, encouraging mortgage investors, the real estate industry, home sellers, and home buyers to get used to these 6% to 7% mortgage rates:
“It is unlikely we will again see the low mortgage rates we had during the COVID-19 pandemic,” Fannie Mae wrote in a blog post, adding that “current mortgage rates and Fannie Mae’s forecast for 2025 rates are well in line with rates over the past several decades. Since 1990, the 30-year fixed-rate mortgage has averaged 6%.”
The average 30-year fixed mortgage rate rose to 7.14% today, according to the daily measure by Mortgage News Daily.
Freddie Mac’s weekly measure of the average 30-year fixed mortgage rate rose to 6.72% today.
Mortgage rates track the 10-year but at a higher level, with a spread between them that varies. And the 10-year yield has jumped by nearly 20 basis points to 4.58% since the Fed’s rate cut yesterday.
Mortgage rates have been above 6% since mid-2022. The market might as well get used to this mortgage rates and deal with them – and lower prices, after the ridiculous spike, will bring up the volume.
Before the 2008-2021 money printing era, 5% mortgages had been essentially unheard of:
Highest supply for any November since 2018.
Supply of unsold existing homes on the market, at 3.8 months (red line in the chart below), was the second highest for any November over the eight years 2017 through 2024, behind only 2018 (yellow). And that is plenty of supply.
Unsold inventory dipped to 1.33 million homes in November, as homes got pulled off the market over the holidays and as new listings declined from the prior month, as they always do over the holiday period.
Days on the market keep rising.
The median number of days before the home is either sold or pulled off the market because it failed to sell rose to 62 days in November, the most for any November since 2019, and up from 52 days a year ago, according to data from Realtor.com.
This is in part a measure of how motivated sellers are by letting their home sit on the market when it doesn’t sell right away.
Prices are way too high.
The median price of single-family houses edged down in November to $410,900, with the past three months in roughly a holding pattern, in line with pre-pandemic seasonality over those months through December. This seasonal pattern is usually followed by a big drop in January. Year-over-year, the price was up by 4.8%.
In the three years between June 2019 and June 2022, this national median price had exploded by nearly 50%, on top of the large price gains in prior 10 years, and this — driven at the time by the Fed’s interest-rate repression and money-printing schemes — has become the #1 problem in the housing market today:
The median price of condos and co-ops dipped to $359,800 in November, for a year-over-year gain of 2.8%. Unlike single-family house prices, the median condo price didn’t experience any outright year-over-year declines in mid-2023.
But home prices vary widely by metro. They have been dropping in some metros since 2022, but continued to rise in other metros through the summer, with declines now getting started in metros even where prices are not seasonal, based on Zillow’s “raw” mid-tier home price index. The two bookends of our series covering 33 markets, The Most Splendid Housing Bubbles in America, show the divergence, with Austin prices having plunged by 22% from the peak in mid-2022, while prices in the New York City metro eked out gains through October before seeing the first dip:
Demand destruction by region.
The charts below show the seasonally adjusted annual rate of sales, released by the NAR today, in the four Census Regions of the US. A map of the four regions is in the comments below the article.
Northeastern US: The seasonally adjusted annual rate of sales rose to 510,000 homes:
Midwestern US: The seasonally adjusted annual rate of sales rose to 1,000,000 homes.
Southern US: The seasonally adjusted annual rate of sales rose to 1,870,000 homes.
Western US: The seasonally adjusted annual rate of sales unchanged at 770,000:
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When a solar energy developer approached Halifax County, North Carolina, in the early 2010s about renting its former airfield in Roanoke Rapids, community leaders had a condition.
“If they were willing to lease this land for the very first solar project in the area, the county needed to get something back in return,” said Mozine Lowe from her office, which overlooks the 20 megawatt solar farm now atop the old airport. “What they got was this building.”
Of course, it’s more than a building. It’s the headquarters for the Center for Energy Education, the nonprofit Lowe has run since 2016 that works to maximize the benefits of large solar farms in rural America — one community, one school child, and one worker at a time.
Lowe, who grew up about five miles from where she now works, had graduated from Greensboro’s North Carolina Agricultural and Technical State University but worked across the country, from California to Washington, D.C.
When she returned to this rural county of less than 50,000 near the Virginia border, formerly a hub of farming and textiles, she said she didn’t see a lot of change.
“The jobs were the same,” she said. “I didn’t see people making the connection between solar energy and what’s happening with the climate and the impact on rural communities, and I just wanted to try and help from that angle.”
The Center conducts educational programs for children of all ages, who come in by the busload from surrounding schools both public and private. It holds a Solar Fest every year to celebrate clean energy with community leaders, drawing hundreds.
Through collaborations with local educational institutions like community colleges, the center has also helped to train a new workforce in jobs that pay roughly twice what workers are earning at the fast-food chains off Interstate 95.
“We have trained more people than most other people around here to become solar installers,” Lowe said. “We want them to be first in line for our jobs.”
And there’s outreach to solar companies themselves in North Carolina as well as Kentucky, Ohio, and Indiana, where the Center also has offices. The goal is to help them become better community partners.
The Center for Energy Education staff. Credit: Elizabeth Ouzts
Geenex, the Charlotte-based developer who built the solar farm at the airport and over a dozen others in the vicinity, is still involved in the Center, and the company’s chairman also chairs the nonprofit’s board.
But Lowe and other staff at the organization say not every solar developer is committed — at least at first — to working with community leaders in Eastern North Carolina.
“Geenex is a very good partner,” said Reginald Bynum, the Center’s community outreach manager. “They’re a good player. But there are only a few of them. Other companies will say, ‘This is your ordinance? Great. This is all I have to do.’”
Some county ordinances, like that in Halifax, need to be updated, Bynum said. Many still call for a 75-foot buffer between the rows of solar panels and neighboring properties. That figure is “so 2018,” said Bynum. It should be doubled, he said.
Most solar farms are also built on private land — often bits of farmland that can help cotton growers and other farmers guarantee income. But developers usually obtain the leases first, before airing the project in public.
“That’s the backwards process of solar,” Bynum said. “They’re talking to landowners and securing that land, and then they’re coming to commissioners.”
What’s more, simply following ordinances isn’t enough, Bynum says. What’s needed is for solar developers to work with local residents to develop community benefits agreements – documents that memorialize pluses to the area, from minimizing construction impacts to providing jobs.
“It’s a 30-year commitment to the community,” he said, “because your farm’s going to be here 30 years. They’re asking for that, and they deserve that.”
Critically, say Bynum and other advocates, solar developers need to work with community leaders to provide benefits beyond tax revenue — an undeniable good, but one that isn’t “seen” by anyone except county bookkeepers.
And though a recent study from the North Carolina Sustainable Energy Association shows that solar farms today take up a fraction of a percent of the state’s farmland, the figure is a full 1% in Halifax County, and on pace to triple in the coming years, according to the Center’s research.
“From rural citizens’ standpoint, that’s a lot,” Bynum said. “You have to really understand what they’re seeing.”
A solar array amid trees and a cotton field in Halifax County, North Carolina. Credit: Elizabeth Ouzts
Part of what they’re seeing is the result of a simple fact: solar farms aren’t just growing more abundant in parts of rural America. They’re also much larger.
In North Carolina up until 2016, the average utility-scale solar development was 5.8 megawatts covering 35 acres of land, per the Sustainable Energy Association. After a 2017 state law made larger solar farms easier to build, the average system size increased to 13.6 megawatts and covered 115 acres of land.
“Projects have gotten bigger,” said Carson Harkrader, the CEO of Durham-based Carolina Solar Energy, who appeared on a recent clean energy panel with Bynum. “As they’ve gotten bigger, people freak out a little bit.”
And while many folks’ worries about the visual impact of solar panels can be mollified — with tree buffers, setbacks, and information about the safety of the structures — some are easy targets for opponents.
“The opposition has become much, much, more organized. There are national groups, funded by the oil and gas industry,” Harkrader said. “With this opposition that is more organized and has more resources, it’s much harder.”
In some cases, opponents may fill a vacuum left by solar companies who lined up projects before the pandemic and have only recently begun to start construction.
That’s what happens, said Bynum, “when you miss steps in keeping citizens updated with the project — particularly when you started talking about it five years before. Commissioners change, a lot of tribal knowledge evaporates.”
And sometimes, it only takes one or two community members to force the issue with local politicians. Both neighboring Northampton and Halifax counties have passed moratoriums on new solar farms recently. Halifax acted after just a few people appeared at their meeting, concerned about the loss of trees.
Having talked with county commissioners, staff at the Center are hopeful the moratorium will end quickly as planned, after the county has updated its ordinance. But the “pause” on solar farms is an example of the constant game of whack-a-mole solar developers and their advocates must play.
Lowe says that’s why the Center is so vital.
“What makes us unique is that our work is mainly community engagement,” she said. “Our stance is to be neutral, and to provide factual information. I think we need to tell more success stories.”
Malaysian contractor Tanjung Offshore, part of T7 Global, has won a contract for the provision of integrated well continuity services for intervention, workover, and abandonment from compatriot Petronas.
Tanjung Offshore will provide perforation, wash and cement services, integrated workover for production enhancement and abandonment, project management team services, and a hydraulic workover unit.
The contract with Petronas as the petroleum arrangement contractor has an effective date of October 10, 2024, and is set to last five years.
This month, Tanjung Offshore also announced deals with Petrofac, IPC Malaysia, and Jadestone Energy for the provision of pan-Malaysia maintenance, construction, and modification work as well as hook-up and commissioning services. Earlier this year, the company also won a five-year deal from supermajor ExxonMobil.
ExxonMobil’s Australian subsidiary, Esso Australia, has awarded Swiss-based marine construction specialist Allseas a contract to remove up to 12 retired platforms from the Gippsland Basin in the Bass Strait.
According to Allseas, the 12 platforms have a combined weight of approximately 60,000 tonnes making it the largest offshore decommissioning assignment in Australian history. It will also be the first time the company’s giant Pioneering Spirit vessel will be working in the country.
The removal scope – covering up to 12 topsides and up to 11 steel jackets – is supposed to be executed in only 3–4 months starting in late 2027.
Once safely removed, the facilities will be transferred to barges or vessels for load-in to the Barry Beach Marine Terminal in Victoria for dismantling and recycling by a separate onshore contractor.
Work is already underway, with engineering and project management teams in Perth and Melbourne leading the effort, with specialist support from our Delft and Kuala Lumpur offices.
China’s Wison New Energies has signed a FEED contract with Ace Gas for the 3 mtpa FLNG and 230MW power barge project, set to be deployed in Nigeria.
This follows Wison New Energies completing pre-FEED work for the project in early 2024. The project aims to develop a 3 mtpa FLNG moored some 10 km offshore in waters with a depth of about 20 m, receiving and processing up to 500m standard cubic feet of gas daily.
In addition, a stream of natural gas will be delivered from the FLNG to the 230MW power barge for power generation and for the supply of electricity to Ace Gas-operated gas assets and gas processing facilities within the Escravos and Forcados hub.
The feedstock for the project will be sourced from multiple fields located within a minimum of four blocks in the swamp and shallow water regions close to the OML 109 license. According to Ace Gas, the investment for this project is expected to exceed $1bn.
The developer has ensured 7 tcf of gas supply for Phase 1 and 2 of the project with a possibility for expansion.
Offshore rig owner Noble has won new contracts for two of its drillships, one in the Gulf of Mexico and one in Ghana.
The first contract was awarded to the 2011-built Noble Globetrotter I drillship by an undisclosed client. The contract is for one firm well with up to six optional wells comprising a total potential duration of around 200 days.
The contract is expected to begin in early January 2025 and has an estimated total contract value of $70m if all options are exercised.
The drillship is not currently working and its last deal was with Shell, also in the Gulf of Mexico. It was operating on a $390,000 dayrate and completed the campaign in October.
The second is for the 2014-built Noble Venturer drillship in Ghana with Tullow Oil. The new deal will begin in May 2025 after the rig completes its campaign for Rhino Resources in Namibia. The rig is working in Namibia on a $410,000 dayrate.
The contract is for six firm wells and will last 360 days with a total contract value of $171m. After the first two wells which should take around 120 days, the contract will be suspended at zero rate until the end of 2025 to perform a planned SPS maintenance period including thruster replacement.
After this break, the contract will resume in January 2026 for the remaining four firm wells which would take around 240 days. The contract also includes three additional options of two wells each estimated at 120 days each.
Italian offshore engineering and construction giant Saipem has been awarded a new offshore contract by Shell’s Nigerian arm for the Bonga North project.
Saipem will work on the project as part of a consortium with KOA Oil & Gas and AVEON Offshore.
The project is related to the tieback of wells to the existing FPSO. Saipem’s scope of work encompasses the engineering, procurement, construction, and installation of risers, flowlines, subsea umbilicals, and associated subsea structures.
Design and fabrication activities will be carried out locally, involving Nigerian suppliers and subcontractors. The overall value of the deal is around $1bn and Saipem’s share amounts to approximately $900m.
Shell has already hired offshore contracting giant TechnipFMC for the provision of subsea production systems for the project.
The contract with TechnipFMC covers the design and manufacture of subsea tree systems, manifolds, jumpers, controls, and services.
Shell recently approved the Bonga North deep-water project to sustain operations at its Bonga FPSO. The project will see the company drill 16 wells – eight production and eight water injection wells – and upgrade subsea infrastructure to connect to the FPSO.
Expected to produce over 300m boe, Bonga North targets peak production of 110,000 bpd by 2030. The Bonga facility began operations in 2005 and has a capacity of 225,000 bopd.
