Bulk cargo liquefaction

After more than 10 vessel capsizes at sea with the loss of over 100 lives and numerous dangerous list incidents and discoveries of in-hold liquefaction at load ports, incidents still continue to occur and sometimes with devastating consequences. Without strict enforcement of protective regimes domestically in those countries where dangerous bulk cargoes that are capable of liquefying are shipped from, it is quite possible that further incidents will occur. Indeed the industry track record thus far would suggest this to be the case.

Analysis of 3 key mineral ore trades into China; Nickel, Iron and Bauxite suggests though, there is an increasing trend towards pre-shipment/export refining and even alternative process generation which is reducing the levels overall of such ores being shipped unrefined and thus reducing the number of liquefaction incidents occurring or likely to occur in the future.

The unrefined nickel ore trade ex-Indonesia remains shut down as a result of the Government ban in January 2014 on exporting unrefined mineral ores. It also remains to be seen whether low grade unrefined ore exports would start up again even if the ban was lifted given the current status of investment in domestic refining capacity now.

The unrefined nickel ore trade ex-Philippines still continues however it is questionable for how long such a trade will remain commercial viable given the depressed nickel commodity market, shipping costs and high NPI refining costs associated with the low grade lateritic ore deposits available in the Philippines. The virtues of increasing domestic refining capacity over exporting unrefined ores are also on the political radar now.

As a result of a mixture of market forces, India has is now a net importer of iron ore and exports (which were primarily made up of fines) have all but ceased and are unlikely to start up again.

The bauxite trade has changed drastically following the Indonesian ban as China extends its reach to maintain supply for its vast alumina smelting capacity. With these changes have come new risks for vessels and their crew as bauxite deposits are now being sourced from a wider range of locations, often in in tropical and subtropical regions that are vulnerable to increasingly unpredictable and severe monsoon seasons. Whilst underlying trends are similarly working to reduce the overall risk exposure, near term dangers remain ever present.

Read the full analysis

DNV GL has also published guidelines on cargo liquefaction. You can find them here.

 


20. Oct. 2015