In 2019 Maritime trade volumes expanded by only 0.5 % which was a decrease from 2.8 % in 2018 to reached a total of 11.08 billion tons and was at its lowest point since the crisis of 2008–2009. Asia was reported to be the largest seaborne trading region as of 2019 due to a strong contribution by the Asian economies and their integration into global shipping networks. As of 2019, compared to much smaller volumes in other continents the Asian seaport handled 6.9 billion tons of goods unloaded and 4.5 billion tons of goods loaded. Further in 2019, both in terms of imports and exports developing economies accounted for the largest share of global seaborne trade. 65% of the world total was unloaded and 58% of the world total was loaded by the developing economies. Developing economies of Asia and Oceania made the majority of the share with a volume of 4.3 billion tons loaded and 6.1 billion tons. With the continuously changing structure of their trade, their share of world imports has surpassed that of world exports.
There is a predominance of Asian and intra-Asian trade in globalized production processes and value chain growth. Asia has become a maritime hub that brings together over 50 % of global maritime trade volumes owing to the fragmentation of globalized production processes. Expansion in exports from Brazil and the United States have supported long-haul journeys from the Atlantic to Asia. Crude oil imports to China increased by 10.6 % in 2019, compared with that of 2018. Long-haul United States exports to Asia continued to expand steadily due to substitution trends and limited growth in Western Asian exports stemming from sanctions and supply cuts. With regard to imports, China and India remained key markets. Imports into China picked up speed in 2019 compared with 2018, supported by its petrochemical sector demand and the coming online of new propane dehydrogenation capacity. Asia’s unrivaled distinction as the world’s factory has been one of the prime driving factors facilitating the expansion in intra-Asian container trade, with a growing contribution from South-East Asia. In India, import demand for liquefied petroleum gas was supported by the continued rollout of liquefied petroleum gas infrastructure in rural areas under a government subsidy program. In India and countries of South-East Asia, imports continued to rise, given new coal-fired power generation capacities. India, the world’s largest seaborne coking coal importer, and Viet Nam, which is becoming a major steel producer, increased their coking coal imports in 2019 to support growth in their steel sectors.
The aforementioned is an adequate substantiation of the anticipated expansion of the share of the APAC region in the global marine fuel market. Also, Sales of marine fuel at APAC bunkering hubs have reportedly sustained, despite major turmoil. Further in May 2020, Singapore’s marine fuel sales increased in March to 4.3 mt attaining a figure of 442,600 t from February 2020 and up by 231,400 t from 2018, Further. Sales of bunker increased by more than 70,000t to 348,500t in March from February at Zhoushan which is China’s largest bunkers hub. Besides the maritime transport segment has been continuously influenced by stringent environmental requirements. Besides the need to maintain service levels at reduced costs, concomitantly ensure that operations are sustainable, the managing GHG emissions from international shipping features at the topmost rung of the international priority ladder. To this end, IMO (International Maritime Organization) has capped marine fuel Sulphur emissions content at 0.5pc, down from 3.5pc 1st January 2020 onwards.
Along with various investments that are in line with mitigating the effects of climate change, policies like the aforementioned are expected to further facilitate the expansion of alternative fuels and aid in the growth of the global marine fuel market. Nevertheless, such ambitions come with their baggage for example., LNG (liquified natural gas) has virtually no sulfur and very low particulate and nitrous oxide (NOx) emissions and is potentially an attractive fuel that falls with the ambit of Annex VI of MARPOL (The International Convention for the Prevention of Pollution from Ships) however it is associated with the proverbial chicken-or-the-egg syndrome. In the sense that shipowners are simply unable to justify investing in vessels capable of running LNG till uninterrupted LNG supply infrastructure is well established, contrarily there is a reluctance to invest in LNG infrastructure until a sound demand basis is set from shipowners. However, these erstwhile inhibitions are being gradually being supplanted by investments in alternative fuels, which are expected to augment the growth of the global marine fuel market and a few of them are listed out for further contextualization.
HySHIP, which is a Maritime innovation project that involves 14 European partners collaborating on the design and construction of a new roll-on/roll-off (RoRo) demonstration vessel running on liquid green hydrogen (LH2), as well as the establishment of a viable LH2 supply chain and bunkering platform reportedly received a grant of €8 million in EU funding as the Norwegian government emphasizes a renewed focus on carbon-neutral fuel through the means of the development and commercialization of hydrogen.
The installation of the first unit of an LNG fuel gas supply system (FGSS) for marine dual-fuel engines was announced by Mitsubishi Shipbuilding Co Ltd, which is a part of MITSUBISHI HEAVY INDUSTRIES, LTD. (TYO: 7011)
Gazprom Neft PJSC (MCX: SIBN) had reportedly announced that the construction of its first liquified natural gas (LNG) bunkering vessel has entered the completion stage of construction. This includes the installation of tanks and other cryogenic equipment for the storage and transportation of LNG.
Plans for introducing eight new methanol dual-fuel 49,999 deadweight ton vessels that would be built in South Korea at Hyundai Mipo Dockyard were announced by Waterfront Shipping Company Ltd. (WFS) which is a wholly-owned subsidiary of Methanex Corporation (TSE: MX). The vessel will be designed with the MAN second-generation B&W ME-LGIM two-stroke dual-fuel engines and would be able to run on methanol or traditional marine fuels allowing for fuel flexibility.