The insurance industry’s Joint War Committee (JWC) said in an advisory dated March 7 that the high-risk area had been widened to waters close to Romania and Georgia after initially adding Russian and Ukrainian waters in the Black Sea and Sea of Azov on Feb. 15.

At least five commercial ships have been hit by projectiles since Feb. 24, including one vessel that sank and another on which a seafarer was killed by a missile that struck the ship. Read full story

The new high-risk areas also extend to various inland waters and sections of the high seas, underscoring the increasing dangers.

“There is clearly a growing nervousness around the region in the insurance market, especially in relation to the Black Sea,” said Marcus Baker at insurance broker and risk adviser Marsh.

“Any future amendments to these areas will very much depend upon a further escalation of activity in the region.”

Insurance premiums for voyages in the region have soared since Russia’s invasion on Feb. 24, an action Moscow calls a “special operation”.

Many shipping companies have suspended sailings to affected ports and the United Nations’ shipping agency will convene a special meeting this week to discuss the worsening situation.

Guidance from the JWC is watched closely and influences underwriters’ considerations over insurance premiums.

The JWC advisory pointed to three ships that had been hit around the Ukrainian port of Odessa, adding that the situation is “dynamic” and being monitored closely.

The listed areas will be readjusted if the JWC believes it appropriate, the guidance said.

The JWC normally meets every quarter to review areas it considers high risk for merchant vessels and prone to war, piracy, terrorism and related perils. It had previously met in February before Russia’s invasion.

Niels Rasmussen, chief shipping analyst at trade association BIMCO, said there was a higher risk of Black Sea export disruption owing to shipping companies’ reluctance to service the area and because of increasing freight costs.

“Of particular concern to global supply is the export of wheat and maize, which is mainly loaded in the Black Sea (region).”

Source: www.marinelinks.com

Image: www.pixibay.com

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A senior cabinet minister said in a statement the ban implemented on Jan. 1 had been eased for miners that have met a requirement to sell a portion of their output for local power generation, after the state utility procured enough coal to ensure 15 days of operation.

“I request that this is supervised closely so this also becomes a moment for us to improve domestic governance,” Coordinating Minister of Maritime and Investment Affairs Luhut Pandjaitan said in the statement on Thursday.

The 37 vessels included 14 ships whose clearance was announced earlier in the week.

The ships can carry a total of about 1 million tonnes of coal, a spokesperson for Luhut said. That compares to exports of around 30 million tonnes of coal in January of 2021 and 2020.

Indonesia set the export ban after state power company Perusahaan Listrik Negara (PLN) reported critically low coal stocks at power plants and said Indonesia was on the brink of widespread power outages. The ban sent shockwaves through global energy markets, especially in Indonesia’s largest coal customers, including Japan and South Korea.

Indonesian authorities blamed its coal supply crisis on miners failing to meet a Domestic Market Obligation (DMO), which requires them to sell 25% of output to local buyers with a price cap at $70 per tonne for power plants.

The government has been lobbied by coal miners and some of its biggest buyers to ease the export ban.

There were about 120 vessels either loading or waiting to load off Indonesian’s coal ports in Kalimantan on the island of Borneo on Wednesday, according to Refinitiv Eikon data.

“We recognize that allowing loaded ships to depart is a small step in easing and progress needs to be made towards lifting the export ban,” research group CreditSights said.

“Indonesia’s government will monitor DMO compliance every month, which we think will help to avoid the abrupt imposition of coal export bans in the future,” it said in a note.

MINERS FACE FINES

The investment ministry said in its statement that mining companies that had met their sales contract with PLN and 100% of their DMO requirements for 2021 would be allowed to begin exporting.

Miners that had not fulfilled their PLN contracts and DMO would face fines, it said.

Citi in a research note on Jan. 5 estimated around 490 out of 631 coal miners in the country had not yet fulfilled their DMO obligation. These 490 coal miners represent about 35%-40% of Indonesia’s total production, it said.

According to minutes of a meeting between miners and the trade ministry earlier this month, 418 miners did not sell any of their coal locally last year.

Indonesia’s two largest coal groups, PT Bumi Resources and Adaro Energy, as well as state coal miner Bukit Asam, were among companies who said in stock exchange filings they have met DMO requirements.

Bumi Resources director Dileep Srivastava said on Thursday the company was awaiting formal confirmation from the government but said an easing would be a positive development.

An Adaro spokesperson said its ships were yet to leave port as of Thursday morning.

Meanwhile, energy minister Arifin Tasrif in a parliamentary hearing on Thursday was peppered by questions regarding the DMO implementation and the export bans, while a number of parliament members called for greater transparency over DMO compliance.

Source: www.marinelink.com

Image: www.pexels.com

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In a new blog, the White House National Economic Council said the Federal Maritime Commission (FMC), an independent agency, was already investigating excessive shipping fees, but should consider using other tools, including challenging carrier alliances if they resulted in unreasonable costs or delays.

It also urged Congress to enact reforms to give the FMC more tools to oversee the global shipping sector, including boosting transparency about fees carriers charge their customers.

President Joe Biden and his administration are racing to address supply chain snarls that emerged in the wake of stronger-than-expected recovery from the COVID-19 pandemic, fueling product shortages and inflation.

Much of the focus has been on U.S. ports, which have been inundated with cargo as a result of seismic shift in consumer spending during the pandemic, from travel and dining to physical goods.

The pandemic also reduced the number of workers needed to keep goods flowing smoothly. Aging truckers retired early, while infection control measures have limited dock and warehouse staffing.

The White House said new data showed continued improvements, with a record number of containers imported at the ports of Los Angeles and Long Beach, California, from January to October, retail inventories up 4% from 2020, and on-the-shelf availability at 90%, just 1% below levels seen before the pandemic.

“The good news is that we’re moving more goods than ever before, we’re seeing that retail is fully stocked, and we’re seeing that the ports are moving these goods more quickly,” a senior White House official said. “That means it’s going to be a normal holiday season for Americans.”

At the same time, the White House said more work was needed to improve exports out of U.S. ports, with rising shipping costs making it more profitable for carriers to load empty containers instead of waiting for loaded containers to get to ports.

“The problem … raises questions about the fair treatment of American exporters and importers in the shipping industry,” it said, noting that nine carriers organized in three alliances now controlled 80% of global shipping, up from just 29% in 2011.

The alliances are legally immune from antitrust laws, but the FMC can challenge them if they result in unreasonable delays, unreasonable increase in transportation costs or “substantially lessen competition,” the White House said.

It said the U.S. Justice Department stood ready to help the FMC, adding that the agency needs a bigger budget than its current $30 million.

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Under the new quotas, 1 million tonnes of LSFO can be exported while 1.579 million tonnes of refined fuels can be shipped, according to the source and the document issued by the Ministry of Commerce.

The new issue brings this year’s total permits for refined fuel exports to about 38.6 million tonnes, down one-third from last year’s quotas.

The document did not break down the specific products allowed to be exported under the refined fuel quotas, which normally cover diesel, gasoline and jet fuel.

The new LSFO quotas raise the total allowances for LSFO to 12 million tonnes for 2021, up from 10 million tonnes last year.

The refined fuel quotas were issued to state-run China National Petroleum Corp (CNPC), China Petroleum & Chemical Corp (Sinopec) and Sinochem Group, as well as private refiner Zhejiang Petrochemical Corp, the document shows.

The LSFO quotas were allotted to CNPC, Sinopec and CNOOC.

China’s Ministry of Commerce did not immediately respond to a request for comment.

The table below gives details of the third batch of LSFO and refined fuel export quotas for 2021. Figures are in tonnes.

Source: www.marinelink.com

Image: www.pexel.com

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