Latest News
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Norway Releases Ship Suspected of Baltic Sea Cable Damage
Police in Norway said that a Norwegian cargo ship, with a crew made up entirely of Russians, suspected of damaging a Baltic Sea Telecoms Cable has been released after authorities found no connection to the incident. Tromsoe police, in northern Norway, said that the Silver Dania had been seized on the request of Latvian officials and with the assistance of the Norwegian coast guard. "The investigation is continuing, but there's no reason why the ship should remain in Tromsoe." The police stated that no evidence has been found to link the ship with the act of damaging the cable. Norwegian broadcaster TV2 reports that Silver Sea Shipping Group, owner of the Silver Dania, denies involvement in the incident. Sweden and Latvia have launched an investigation into the Sunday suspected sabotage of the cable connecting the two countries. The Swedish police boarded and seized the Maltese flagged cargo ship Vezhen, on suspicion that it was the cause of the damage. The Bulgarian operator of Vezhen, the head of that company, admitted on Monday they may have hit the cable with their anchor, but denied malicious intent. Mats Ljungqvist said that the Swedish prosecutor who is handling the investigation dismissed the Norwegian ship's involvement on Friday. Since Russia's invasion of Ukraine in 2022, the Baltic Sea region has been on high alert. This is because there have been a series of power cables, telecom links, and gas pipelines outages. NATO recently increased its presence by adding aircraft, frigates and naval drones.
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Why the US claims that China's presence in Panama violates the neutrality treaty
Some U.S. officials and lawmakers are citing a nearly 50-year-old treaty signed between the United States of America and Panama as a way to justify Trump's threat to take back the Panama Canal, provided they can prove that the waterway's operations are threatened. Some, however, believe that obstacles would arise if the U.S. tried to use the 1997 Panama Canal Neutrality Treaty - which went into effect in 1999 - to claim the canal. The treaty guarantees the canal will remain neutral and available to ships from any country. Since 1999, the Panama Canal Authority has controlled the 82-km waterway. This autonomous agency is overseen by Panamanian government. Donald Trump, during his inauguration speech on Jan. 20, falsely claimed that China was operating the second-largest interoceanic canal in the world. He has also complained about Panamanian firms based in China and Hong Kong, as well the tolls on the canal. At a Senate hearing held on Tuesday, Federal Maritime Commission Chairman Louis Sola stated that the agency overseeing U.S. ocean transport and merchant marine will "consider broad reviews" of Panama's nautical sector and may impose fines or restrictions on Panamanian flagged vessels entering U.S. port. Panama is the flag and registration country for more than 8,000 vessels worldwide. In advance of the weekend visit by U.S. Secretary Marco Rubio to Panama, President Jose Mulino said on Thursday that he was unable "to negotiate and even less open a negotiation process on the canal." He added, "The canal belongs Panama." Is China a threat? Some U.S. officials claim that, in addition to stipulating the canal will "remain secure and open for peaceful transit by vessels of all countries," the treaty gives the U.S. military the right to defend the canal. In this week’s hearing, U.S. Senator Ted Cruz stated that a new bridge being built over the canal by Chinese contractors could cause a shutdown of transit. He also said the Chinese ports at both ends of the canal posed "acute" risks to security. After listening to U.S. officials, experts and other Texas Republicans, the Texas Republican stated that "Panama could well be violating this treaty." After delays and contract modifications, the $1.3 billion bridge is expected to be finished by 2026. CK Hutchison Holdings, a Hong Kong-based company, has operated the Balboa Port and Cristobal ports for more than 20 years. Hong Kong-based CK Hutchison Holdings, a publicly listed company, is not financially linked to the Chinese government. At the hearing, Eugene Kontorovich of George Mason University, a law professor and research fellow with the Heritage Foundation (a conservative organization), said: "The presence and involvement of Chinese companies and the Chinese government raises serious questions and concerns about the neutrality and integrity of the treaty." The favorable financial terms offered to the company by CK Hutchison led to criticism both in the U.S.A. and Panama. Security was not a concern at the time. Hutchison Port Holdings is a global company that operates in hundreds of ports, including the U.S. Why don't the U.S. terminate Hutchison contracts if these ports are a threat to their security? In a recent opinion piece published in a local paper, Julio Yao wrote that he was one of Panama’s advisors at the time it signed its neutrality treaty. The U.S. can't force Panama to terminate or review contracts with Chinese companies. Yao, an expert in international relations, says that arguments for intervention are based upon 1978 amendments by the U.S. Senate, which guaranteed the U.S. protection of the canal from any threats. Panama should not acknowledge those amendments, said Yao. The eight-paragraph agreement and its annexes don't include any provisions on the resolution of disputes, or a date for expiration. Do higher tolls on canals violate neutrality? Some U.S. officials also claimed that the increase in Panama Canal passage fees in recent years "disproportionately impacts Americans". The toll system for the canal does not distinguish between flags, origins or destinations. The severe drought in the year ended September saw the canal report a 5% drop in toll revenues to $3.18billion. The annual reports show that the toll revenue of the canal increased by almost 26% between 2020 and 2023. The canal's fee structure, however, is based on the number of reservations made by vessel type and size. This is combined with auctions to determine ships that arrive without reservations, and a variable surcharge for water. The toll for military vessels is different than that of commercial vessels. Priority is given to U.S. military vessels. The treaty states only that "tolls, other charges, and fees for transit, ancillary service, and related services, shall be reasonable, fair, and consistent with international law principles." Daniel Maffei, a commissioner from the FMC, said that the U.S. was disproportionately affected because "the U.S. uses it disproportionately." He added, "We are aware that it is an important trade corridor. We want to continue using this corridor and to be treated fairly." Shipping experts warned that toll increases were applied by Panama and other waterways, including the Suez Canal in recent years. This was due to a spike in demand, geopolitical conflict, and weather conditions made worse by climate change. "The U.S. does not operate a fleet commercial vessels." In the 1960s, less than 10% of cargo entering or leaving the U.S. was under American flag. In a recent TV interview, John Feeley said that the toll has increased to 1.5%. He added that Panama's use of freshwater is what caused this increase.
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Can the US declare that China's presence in Panama violates the neutrality treaty with Panama?
Some U.S. officials and lawmakers are citing a nearly 50-year-old treaty signed between the United States of America and Panama as a way to justify Trump's threat to take back the Panama Canal, provided they can prove that the waterway's operations are threatened. Some, however, believe that obstacles would arise if the U.S. tried to use the 1997 Panama Canal Neutrality Treaty - which went into effect in 1999 - to claim the canal. The treaty guarantees the canal will remain neutral and available to ships from any country. Since 1999, the Panama Canal Authority has controlled the 82-km waterway. This autonomous agency is overseen by Panamanian government. Donald Trump, during his inauguration speech on Jan. 20, falsely claimed that China was operating the second-largest interoceanic canal in the world. He has also complained about Panamanian firms based in China and Hong Kong, as well the tolls on the canal. At a Senate hearing held on Tuesday, Federal Maritime Commission Chairman Louis Sola stated that the agency overseeing U.S. ocean transport and merchant marine will "consider broad reviews" of Panama's nautical sector and may impose fines or restrictions on Panamanian flagged vessels entering U.S. port. Panama is the flag and registration country for more than 8,000 vessels worldwide. In advance of the weekend visit by U.S. Secretary Marco Rubio to Panama, President Jose Mulino said on Thursday that he was unable "to negotiate and even less open a negotiation process on the canal." He added, "The canal belongs Panama." Is China a threat? Some U.S. officials claim that, in addition to stipulating the canal will "remain secure and open for peaceful transit by vessels of all countries," the treaty gives the U.S. military the right to defend the canal. During this week's hearing U.S. Senator Ted Cruz stated that a new bridge being built over the canal by Chinese contractors could cause a shutdown of transit. He also said the Chinese ports at both ends of the waterway posed "acute" risks to security. After listening to U.S. officials, experts and other Texas Republicans, the Texas Republican stated that "Panama could well be violating this treaty." After delays and contract modifications, the $1.3 billion bridge is expected to be finished by 2026. CK Hutchison Holdings, a Hong Kong-based company, has operated the Balboa Port and Cristobal ports for more than 20 years. Hong Kong-based CK Hutchison Holdings, a publicly listed company, is not financially linked to the Chinese government. At the hearing, Eugene Kontorovich of George Mason University, a law professor and research fellow with the Heritage Foundation (a conservative organization), said: "The presence and involvement of Chinese state-owned companies and the Chinese government raises serious questions and concerns about the neutrality and integrity of the treaty." The favorable financial terms offered to the company by CK Hutchison led to criticism both in the U.S.A. and Panama. Security was not a concern at the time. Hutchison Port Holdings is a global company that operates in hundreds of ports, including the U.S. Why don't the U.S. terminate Hutchison contracts in their own country if these ports are a threat to U.S. national security? In a recent opinion piece published in a local paper, Julio Yao wrote that he was one of Panama’s advisors at the time it signed its neutrality treaty. The U.S. can't force Panama to terminate or review contracts with Chinese companies. Yao, an expert in international relations, says that arguments for intervention are based upon 1978 amendments by the U.S. Senate, which guaranteed the U.S. protection of the canal from any threats. Panama should not acknowledge those amendments, said Yao. The eight-paragraph agreement and its annexes don't include any provisions on the resolution of disputes, or an expiration date. Do higher tolls on canals violate neutrality? Several U.S. officials also claimed that the increase in Panama Canal passage fees in recent years "disproportionately impacts Americans". The toll system for the canal does not distinguish between flags, origins or destinations. The severe drought in the year ended September saw the canal report a 5% drop in toll revenues to $3.18billion. The annual reports show that the toll revenue of the canal increased by almost 26% between 2020 and 2023. The canal's fee structure, however, is based on the number of reservations made by vessel type and size. This is combined with auctions to determine ships that arrive without reservations, and a variable surcharge for water. The tolls for military vessels are different than those charged to commercial vessels. Priority is given to U.S. military vessels. The treaty states only that "tolls, other charges, and fees for transit, ancillary service, and related services, shall be reasonable, fair, and consistent with international law principles." Daniel Maffei, a commissioner from the FMC, said that the U.S. was disproportionately affected because "the U.S. uses it disproportionately." He added, "We are aware that it is an important trade corridor. We want to continue using this corridor and to be treated fairly." Shipping experts warned that toll increases were applied by Panama and other waterways, including the Suez Canal in recent years. This was due to a spike in demand, geopolitical conflict, and weather conditions made worse by climate change. "The U.S. does not operate a fleet commercial vessels." In the 1960s, less than 10% of cargo entering or leaving the U.S. was under American flag. In a recent TV interview, John Feeley said that the toll has increased to 1.5%. He added that Panama's use of freshwater is what caused this increase.
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After 10 months of uninterrupted power supply, South African power cutbacks return
Officials announced on Friday that South African households and businesses will be experiencing scheduled power outages for the first 10 months because of breakdowns and planned maintenance at Eskom's coal fired power stations. Kgosientsho RAMOKGOPA, the Energy Minister told reporters Eskom's reserves had been depleted and that as a result "Stage 3 power cuts" would be implemented. This could require up to 3,000 Megawatts to be removed from the national grid. Outages will begin at 5 pm (1500 GMT) Friday. He said that the breakdowns occurred when several units were off-line for maintenance. Ramokgopa called the return of power outages in Africa's largest industrialised economy a "temporary reversal" and said that the country is still on track to ending the electricity outages. Since more than a century, power cuts have slowed down South Africa's economy. However, since March of last year there has been no power cut after Eskom's generator fleet suddenly improved its performance. Eskom announced last month that they expect to make their first profit in 8 years. This is due to improved power supplies and the debt relief package provided by the government. South Africa's energy regulator, however, could have dealt a blow to its efforts at a turnaround. On Thursday, it awarded the company a tariff increase average of 12.7% for the fiscal year starting in April. This is about a third less than what they had requested. Eskom's request for tens or even hundreds of millions of rands to cover coal contracts, an increased carbon tax, and increasing municipal debt is effectively denied by the regulator.
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Businesses sell in Russia
Many Western companies sold their Russian assets to comply with the sanctions imposed over the conflict in Ukraine, and to respond to the Kremlin's threats that it could seize foreign assets. The following companies have sold their business in Russia. They are grouped by sector. Continental sold its Russian tire plant to holding company S8 Capital by May 2023. Renault sold Avtovaz's majority stake to the Russian government in 2022. The price was reportedly only one rouble, but there was a six-year buyback option. Volkswagen sold its Kaluga production facility and local subsidiaries to Volkswagen in May 2023. Banks & Insurance The government decree, published on January 31, showed that President Vladimir Putin had authorized the Armenian investment fund Balchug Capital to purchase Goldman Sachs Russian unit. This could pave the way for U.S. Bank to withdraw fully from Russia. ING announced on January 28 that it had agreed to the sale of its Russian business to Global Development JSC, without disclosing any financial details. The deal is expected to have a negative impact on the company's post-tax results of approximately 0.7 billion euro ($730.7m). HSBC said that it had transferred its Russian unit, owned by Expobank, to the bank for an undisclosed amount in May. In May 2022, Societe Generale will sell its Rosbank division to Interros Capital. The loss is 3.1 billion euros. Uniqa Insurance announced on October 4 that it has completed the sale of Raiffeisen Life, and is now out of Russia. ENERGY Shell sold its Russian retail business and lubricants to Lukoil by 2022. FOOD & BEVERAGES, CONSUMER GOUVERNMENTS Carlsberg announced on December 3 that it had agreed with long-time employees of Baltika Breweries in Russia to sell their shares. Heineken said that it sold its Russian operations to Arnest Group in August 2023 for a symbolic amount of one euro. Belgian brewer AB InBev has agreed to sell its share in the joint venture AB InBev Efes by April 2022. This will result in a $1.1billion impairment. Danone sold its Essential Dairy and plant-based business to Vamin R LLC, resulting in a loss of 1.2 billion euro. Unilever announced on 10 October that it had sold its Russian unit to Arnest Group. Arnest Group is a Russian manufacturer of cosmetics, household products and perfume. FORESTRY AND PACKAGING International Paper sold its 50 percent stake in a joint venture to Russian shareholders in 2023. Mondi, a British company, sold three packaging converting businesses to Gotek Group in September 2023 for 1.6 billion roubles (16.41 million dollars). It also agreed to sell the largest plant it has in Russia to Sezar Invest at 80 billion roubles. Finnish packaging company Huhtamaki sold its Russian operations last year for 151 millions euros. Forestry firm Stora Enso also sold three corrugated packing plants to local management. RESTAURANTS & RETAIL AmRest sold its KFC business to Smart Service in Russia for 100 million Euros in May 2023. Gazprombank Group purchased 14 MEGA shopping centers in Russia in September 2023 from a division of IKEA operator Ingka Group for an undisclosed amount. Ingka announced that it sold its final asset in Russia on Nov. 8, 2024. Hugo Boss announced on August 5 that it had sold its Russian business for an undisclosed amount to Stockmann, a wholesale partner. Moscow has approved the sale of Inditex's Russian operations to an UAE-based buyer by April 2023. LPP sold its Russian businesses in June 2022, to a Chinese group and the former CEO of Russian firm Re Trading. The stores were sold for $135.5m plus 1.2billion zlotys (about $297.6m) in inventory. LPP reported a loss of 600 million zlotys on the sale in March 2024. McDonald's closed its Russian business in 2022 and took a $1.28 billion charge. TOBACCO British American Tobacco announced in September 2023 that it would sell the Russian and Belarusian operations to a consortium headed by its Russian management. The amount of this sale was not disclosed. Imperial Brands sold its Russian business in April 2022 to Russian investors. OTHER EMBRACER In March, the Swedish gaming company announced that it had ceased its operations in Russia after selling selected assets of its Saber Interactive subsidiary to a third party for $247 millions. FRAPORT On Dec. 5, the German airport operator announced that it was nearing completion of its sale of a 25% stake in St. Petersburg's airport Pulkovo, to Middle East investor Orbit Aviation LLC. POLYMETAL INTERNATIONAL In March 2024, the precious metals company announced that it had sold its Russian operations to a Siberian miner for $3.69 billion. This included the net debt of $2.21 billion. Vimpelcom was sold to the senior management of Vimpelcom in October 2023, completing the telecoms operator's exit from Russia. XEROX HOLDINGS In October 2023, Xerox Holdings, a printer maker, announced that it had sold the Russian operations of its company to local management. The amount was not disclosed. YANDEX NV Yandex is a Dutch company that runs an internet search engine. In July, a Russian investor consortium bought the majority of its business in a deal valued at around $5 billion. ($1 = 0.9148 euros) ($1 = 97.5000 roubles) ($1 = 4.0323 zlotys)
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TASS reports that Russia has begun to inspect its fleet of tankers after a major oil spill.
A government official told the TASS state news agency that the Russian government had launched an inspection program to examine the condition of the tanker fleet in the country after a major oil spill involving a tanker. The authorities in southern Russia's Krasnodar Region have declared an emergency in the region after a large oil spill was caused by two old tankers that got into trouble in December during a storm. The Volgoneft tanker 212 split in two in the Kerch Strait between the Black Sea Sea of Azov. Meanwhile, the Volgoneft Tanker 239 ran aground in the Kerch Strait about 80 metres away from the shore, near the port of Taman. The older ships, which were more than 50 years old, carried a total of 9,200 metric tonnes (62,000 barrels), and the spillage was one of largest environmental disasters that hit the region for many years. (Reporting and Writing by Anastasia Teterevleva, Editing by Andrew Osborn).
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CORRECTED - Asian spot LNG prices are down due to low demand during Lunar New Year.
The Asian spot price of liquefied gas (LNG), which is a product of liquefied gas, fell this week due to low demand in Asia during the Lunar New Year holidays. This encouraged cargo diverts towards Europe, where gas prices have reached a 15-month peak amid concerns about storage refilling. The average LNG price in March for delivery to North-east Asia Industry sources estimate that the price per million British Thermal Units (mmBtu) was $13.80, down from $14/mmBtu a week ago. The demand in Asia has been lower than normal, especially in China. This has caused rates to fall. Toby Copson is chairman of Davenport Energy Partners. Copson said that "Overall sentiment is muted, so cargoes continue to be rerouted towards Europe in order to gain premiums." In South-East Asian markets, high prices also discourage price sensitive buyers. "Asian LNG Buyers are firmly off the market for spot U.S. Gas Cargoes. This is true not only for deliveries next month but also in future months," Natasha Fielding said, Head of European Gas, LNG, and Biomass Pricing at Argus. The market continues to be concerned about the colder temperatures in Europe and the increased storage withdrawals. The higher prices in Europe prompted a surge of LNG tankers in early January to divert from Asia to Europe, with at least 6 making mid-Atlantic route changes. This week we saw the LNG Juno change course from Japan to Greece, said Alex Froley senior LNG analyst at ICIS. Malaysia's Petronas has confirmed that its operations at Miri and Bintulu remain unaffected despite severe flooding. This eases market concerns about LNG supply disruptions. Florence Schmit is the European energy strategist for Rabobank. She said: "All eyes are on the final straw which could speed up the pace of European storage withdraws and leave sites depleted so after the winter, that the only option will be fierce competition with LNG." Schmit said that the current sentiment is bullish and the fact that governments in Europe are talking about subventioning storage injections over the summer will only amplify this trend. S&P Global Commodity Insights estimated its daily North West Europe (NWM) LNG Marker price benchmark on a basis of ex-ship (DES), for cargoes to be delivered in March at $15.31/mmBtu, a $0.47/mmBtu reduction from the gas price for March at the Dutch TTF Hub. Spark Commodities set the price for the February delivery period at $15.39/mmBtu. Qasim Afghanistan, Spark Commodities analyst, says that the U.S. arbitrage for north-east Asia via Cape of Good Hope has narrowed slightly, but it still signals strongly that U.S. cargoes will be delivered to Europe and not Asia. As a result of increased vessel availability, global LNG freight rates have fallen to record lows. On Friday, Atlantic rates dropped to the lowest ever recorded levels, at $3,500/day. Afghan also said that Pacific rates dropped to $11,500/day.
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Spanish port traffic surges due to Red Sea crisis
In 2024, the volume of goods passing through Spanish ports increased by 6% after many companies chose to send their goods south of Africa in order to avoid attacks by Houthi militias on ships in the Red Sea. The state port agency reported on Friday that Las Palmas, Canary Islands, and Barcelona both saw a 13% and 10% increase in volume of goods, liquid bulks, and dry bulks respectively. The agency said that Spanish ports had adapted to the situation, which has led to some peak times of extra activity. It added that it expects higher port traffic as long as the Red Sea remains unstable. Yemen's Houthis launched more than 100 attacks against ships in November 2023. They sank two vessels and seized another, claiming to be in solidarity with Palestinians living in Gaza. Following a Gaza ceasefire agreement, the Houthis announced last week that they would stop attacking vessels owned or operated by U.S. and British companies. They will instead limit their attacks to commercial ships with ties to Israel. Transport companies, however, have stated that the risks are still too high for them to re-use the Red Sea route. Emily Stausboll is a senior shipping expert at Xeneta. She said that carriers will want to know if there are any long-term plans for safe passage in the Red Sea before they return. This would help them avoid further disruptions if conditions worsen and they have to once again divert around Cape of Good Hope. According to the agency, container traffic through Spain's port increased by 11% in 2018. Spanish ports also saw an increase in vessel bunkering in preparation for longer routes. The ports will see a drop of 4.5% in 2023 for container traffic. Two executives from the fashion industry in Spain claim that some Spanish retailers have increased their air shipping to Europe to meet the demand. This is due to the two-week delay required to ship goods via Southern Africa to Europe. Corina Pons is the reporter. (Editing by Charlie Devereux, Mark Potter and Mark Potter.)
INDIA BUDGET - India to establish $3 billion maritime development fund for the shipping industry
Nirmala Sitharaman, India's Finance Minister, announced on Saturday that the country will create a maritime development fund of 250 billion rupees ($2.9 billion) to finance the shipbuilding and repairs industry for a long time.
India, a South Asian nation, is investing billions in infrastructure to upgrade it to a level of world-class manufacturing. Prime Minister Narendra modi wants India to be developed by 2047.
Sitharaman, in her budget proposals for the fiscal period starting April 1, said that the government would contribute 49% and ports and private sector will provide the rest.
India's fleet of ships has not kept up with the rapid growth of its trade, which includes imports of energy products and exports refined oil products.
Last year, it was reported that the government planned to create a new shipping firm with participation from Indian oil refiners as well as Shipping Corp of India in order to expand its fleet and reduce freight payments to foreign carriers.
Shipping Corp. shares rose by 3.8% following the announcement of the budget.
Sitharaman stated that the governments will also promote clusters of shipbuilding to increase the types, sizes and capacities of ships. This will include new infrastructure, skills and technology in order to develop the ecosystem.
India will issue credit notes to encourage the demolition of old ships and construction of new vessels.
Sitharaman extended the exemption from import taxes by 10 years for inputs required for shipbuilding and shipbreaking activities.
(source: Reuters)