The tanker market is faced with slow demand growth, which has led to a softening of the freight rate market over the course of the past few months. In its latest weekly note, shipbroker Allied Shipbroking said that â€œdespite the efforts being made by oil producing nations and especially efforts being made by OPEC members, we have seen limited gains in terms of pricing for crude oil in the year to date. Despite most expectations that were being made during the end of 2016 of the average price of crude reaching in the US$ 60 per barrel, prices have stubbornly held at around US$ 50 per barrel never reaching levels above US$ 55 per barrel. In part this is a reflection of the limited and not so aggressive commitment by OPEC members to curb their outputâ€.
Regulatory approval of the proposed Ocean Alliance has met delays with the US Federal Maritime Commission (FMC) this week. The alliance of CMA-CGM, China COSCO Shipping, Evergreen and OOCL had submitted plans to the FMC in mid-July and hoped to receive clearance by 29th August. The FMC has requested further information from the group, and once provided, the 45 day review period will be re-started. The alliance is scheduled to start operations in April 2017, subject to approval by competition authorities. • UASC reportedly made an operating loss of $132m in 1H 2016, with a negative operating margin of 9%. These results were amongst the weakest of the major containership operators, although many lines have suffered financially from the weak freight market environment. According to the SCFI, the spot freight rate on the peak leg Far East-Europe route marginally rose w-o-w to $695/TEU this week, still a historically depressed level.
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