Good day,
As the IMO2020 sulfur cap regulation looms large over the maritime industry, the U.S. government is looking to ease the pressure of the rollout, fearing drastic implications on its economy. The regulation will mean a strict enforcement of sulfur emissions to less than 0.5%, which currently stands at 3.5%. This would lead to container lines spending millions more in building new ships to suit the low-sulfur fuel, or installing scrubbers in their existing ships, which is by no means a bargain.
Such a situation would lead to a surge in demand for low-sulfur fuels, causing seismic changes in the prices of crude oil. The U.S. government is focusing on damage-control, and as the changes coincide with an election year, a lot more might be at stake for the Trump government. A spokesperson from the White House said that the government was not seeking to withdraw from the IMO agreement, but would try looking into ways the rules could be phased out, rather than delaying the inevitable.
Did you know?
Chinese consumers eat 123 billion pounds of pork annually in everything from dumplings to fiery mapo tofu. In a nation of 1.41 billion people, that works out to about 87 pounds a person this year, up around 30% since 1998, according to the U.S. Department of Agriculture.
Quotable:
“China’s policy makers are trying to figure out how to react to the U.S.’s trade agenda and are less confident about their standing in the global arena compared with the past cycles.”
– Bin Shi, portfolio manager at Acadian Asset Management, on Chinese third quarter GDP growth dropping to 6.5%, its lowest since Q1 2009.
In other news:
Saudi Aramco Pulls The Trigger On $25 Billion Megaproject
Saudi Aramco signed an agreement to invest in a 400,000-bpd refinery and associated petrochemical plants in eastern China as part of Saudi Arabia’s push to expand its downstream business and secure additional markets for its oil. (Oilprice)
Amazon revisits some cities as HQ2 decision looms
Company appears to be favoring an urban site; New York City, Newark, N.J., and Chicago received visits. (Wall Street Journal)
Walmart’s newest high-tech warehouse will automatically load pallets
Walmart’s new warehouse in Shafter, California, will be a tech-enabled fresh and frozen grocery facility that stores and retrieves items and loads pallets automatically. (Supply Chain Dive)
International Maritime Organization rolls out ship and port toolkits to tackle maritime emissions
The IMO said Thursday that it rolled out a new set of toolkits to assess and address emissions from ships as well as ports. (S&P Global)
Roadrunner Transportation Systems receives notice from NYSE regarding share price continued listing standard
The company has fallen below the NYSE’s continued listing standard related to price criteria for common stock, over a 30 consecutive trading day period. (Business Wire)
Final Thoughts
The Chinese stock market fell sharply yesterday, at the wake of Chinese GDP sauntered to 6.5% in Q3, a scenario last seen in the first quarter of 2009. The Shanghai Composite Index crashed by 3% on a single day, which marked its lowest point in nearly four years. But this has been a regular occurance in China, with stock markets having lost over $3 trillion in the last six months.
One of the primary driving factors for this situation is the ongoing China-U.S. trade spat, which has hit export businesses heavily in the country. This accompanied with a weakening yuan and the rise of global fuel prices is causing the economic growth to melt. Last week, China saw an unprecedented crash in auto sales, as sales fell by 11.6% year-on-year with three months of successive fall. This apart, China is facing down tariffs on $200 billion of its U.S. exports, which would see a rise from 10% to 25% from 2019. This could wreak havoc on the local GDP and also cause a negative stir in the global economy.
Hammer down, everyone!