Coronavirus epidemic to disrupt earnings of Indian shipping companies; Coronavirus scare: 50 Goan seafarers could be on board quarantined ship

Coronavirus epidemic to disrupt earnings of Indian shipping companies
10/02/2020 https://www.hellenicshippingnews.com/coronavirus-epidemic-to-disrupt-ear...

Tanking freight rates on the back of spread of the corona epidemic in China are likely to hurt earnings of Indian shipping companies in March quarter.

“Freight rates have tumbled significantly and are impacting SCI (Shipping Corporation of India) across segments. We have seen the damage in January already. Our Q4 earnings are most likely to be affected due to this,” Harjeet K. Joshi, chairman of state-owned Shipping Corporation of India (SCI) said today.

She was speaking on the sidelines of an ASSOCHAM event held here.

State-owned SCI reported consolidated net sales of Rs 1,25,761 crore in December quarter, up 17 percent from same period last year with strong contribution from tanker segment.

“We had robust performance in third quarter mainly from tankers. Now, tanker freights have softened, so currently we are in a wait-and-watch mode. There is impact on every segment for us but it is varying,” said Joshi without detailing the quantum of impact on each of its businesses.

Liners, offshore, bulk carrier, tankers and containers are the business segments of SCI.

Coronavirus was first detected on 8 December 2019 and by 1, January 2020, Chinese authorities were able to pinpoint the source to a seafood market in Wuhan, said reports.

By end of January, about 9,700 cases were detected and 213 deaths reported. By 3 February, there were 17,000 confirmed cases and as on date, the number stands at 28000, informed industry officials.

“The coronavirus impact is much bigger than what the market had predicted. We are helpless and simply watching the market at present. Nothing can be done,” said Anil Devli, chief executive officer at Indian National Shipowners’ Association (INSA)

The Chinese New Year (this year January 25, 2020) is the time when most native Chinese workers travel to their hometown for the festival. On Jan 22, 2020, Wuhan was cordoned off and transportation restrictions imposed in most parts of the country because of the corona epidemic.

On 1 February, all international flights to China were cancelled and this brought down the dragon country’s fuel consumption drastically.

China consumes 16 percent of total global oil production. Lower consumption led to a drop of about 4 percent in import of crude oil by China. This in turn has heavily impacted the sea transportation of oil.

“The Very Large Crude Carriers (VLCCs) that were trading at over $100,000 per day in December have dropped to $15,000 per day as on 7 February,” Captain Rahul Bhargava, director-commercial & operations at Essar Shipping told Business Standard via emailed interaction.

Similar impact has been witnessed on dry bulk cargo movement, he added.

The Baltic Dry composite Index (BDI), which was trading at about 1,500 on 10 December 2019, dropped to 976 on 3 January and is trading at 431 as on 6 February.

Baltic Cape index, for the first time in history of the Baltic Index, dipped to negative digits on 31 Jan and is now trading at negative 187.

On time charter yield, for the equivalent Cape sized vessels, freight rate has come down to $3,000 per day from $22,000 per day. Similarly, that of Panamax vessels freight has come down to$3,400 per day from $12,000 per day.

“All sections of dry bulk trade have lost about 75 percent to 85 percent of their earnings in last one month,” informed Bhargava.

Supramax and Handysize vessels are part of the dry bulk trade section along with Cape and Panamax among others.

However, Great Eastern Shipping, India’s largest private sector shipping company, is of the view that the epidemic alone is not responsible for the drastic fall in freight rates.

“Economic slowdown and lifting of Cosco sanctions by the US which brought in vessel supply into the market has also led to the fall in freight rates,” said a company source close to the development. “Next one month will be crucial, we are watching,” source added.

Great Eastern Shipping has a fleet size of 46 vessels, which includes crude oil and product carriers, along with LPG and dry bulk carriers.

On September 25, the US laid sanctions on Cosco Shipping Tanker (Dalian) and Cosco Shipping Tanker (Dalian) Seaman and Ship Management for trading oil with Iran. Those sanctions were lifted by the US last week. This initially caused VLCC freight rates to spike but with more supply of the vessels into the market, freights eventually declined.

Cosco Shipping controls more than 5 percent of the global VLCC fleet.

“As ship owners, we at Essar Shipping have to manage the vessels doing short voyages until the market improves. There may be some positive movement once China returns from extended New Year holiday on 10th February as it has already taking some steps to control the epidemic by building modern hospitals and restricting people movement,” said Bhargava of Essar Shipping.

Essar Shipping with its youngest fleet in the country is in tankers and bulk carriers.
Source: Business Standard

Coronavirus scare: 50 Goan seafarers could be on board quarantined ship
TNN | Feb 9, 2020 https://timesofindia.indiatimes.com/city/goa/50-goan-seafarers-could-be-...

MARGAO: Anxiety gripped the families of several Goan seafarers on Saturday following reports that among the 300 persons onboard the cruise ship Diamond Princess, quarantined off the coast of Japan, several are Goans. By some estimates, up to 50 Goans are onboard.

Japanese authorities, it is learnt, have quarantined a large number of people onboard the ship as a preventive measure against coronavirus as the vessel is reported to have travelled to Japan from China.

Commissioner of NRI affairs Narendra Sawaikar said that while details are awaited, the Union government was keeping a close watch on the emerging situation.

Union minister for external affairs S Jaishankar said that as per information from the Indian embassy, no Indian has tested positive.

“Many Indian crew & some Indian passengers are onboard the cruise ship #DiamondPrincess quarantined off Japan due to #coronavirus. None have tested positive, as per the latest information provided by our Embassy @IndianEmbTokyo. We are closely following the developments,” minister for external affairs S Jaishankar posted on his Twitter account.
Sawaikar responded to Jaishankar’s tweet stating that of the 300 Indians onboard the ship, 50 were Goans.

MARGAO: Anxiety gripped the families of several Goan seafarers on Saturday following reports that among the 300 persons onboard the cruise ship Diamond Princess, quarantined off the coast of Japan, several are Goans. By some estimates, up to 50 Goans are onboard.

Japanese authorities, it is learnt, have quarantined a large number of people onboard the ship as a preventive measure against coronavirus as the vessel is reported to have travelled to Japan from China.

Commissioner of NRI affairs Narendra Sawaikar said that while details are awaited, the Union government was keeping a close watch on the emerging situation.

Union minister for external affairs S Jaishankar said that as per information from the Indian embassy, no Indian has tested positive

“Many Indian crew & some Indian passengers are onboard the cruise ship #DiamondPrincess quarantined off Japan due to #coronavirus. None have tested positive, as per the latest information provided by our Embassy @IndianEmbTokyo. We are closely following the developments,” minister for external affairs S Jaishankar posted on his Twitter account.
Sawaikar responded to Jaishankar’s tweet stating that of the 300 Indians onboard the ship, 50 were Goans.