Author: Ricardo Perez

The EU’s natural gas storage is already at 95% full, data from Gas Infrastructure Europe show, after the bloc reached in August its target to have 90% full storage well ahead of its self-imposed binding deadline, November 1.

In the middle of August, the EU reached its target of filling gas storage facilities to 90% of capacity 10 weeks ahead of the 1 November deadline. This achievement is on par with last year, when EU countries reached the 90% target on August 18, the European Commission said two months ago.

Now the EU storage is 95% full as the heating season begins. The storage level this year is slightly below last year’s level, but above the 2017-2021 average and the 2022 storage levels, according to the data.

Major economies and gas markets such as Germany and Italy have their storage at more than 97% full, while Austria, still dependent on Russian pipeline gas flows, had its gas storage at 93.73% full as of this weekend.

Yet, gas in storage wouldn’t cover Europe’s needs for winter, and the volumes of gas in storage are slightly lower compared to this time last year, mostly due to lower numbers of incoming LNG cargoes.

As Europe prepares for the winter amid uncertainty about the remaining Russian pipeline gas flows, LNG imports have been rising in recent weeks.

Now that more cargoes have headed to Europe, supply concerns could ease, but prices are set to increase with rising seasonal demand and competition between Europe and Asia for LNG supply.

In addition, the conflict in the Middle East and fears of it spreading through the region are pushing up Europe’s natural gas prices early on Monday.

Dutch TTF Natural Gas Futures, the benchmark for Europe’s gas trading, were up by 2% to $43.42 (40.00 euros) per megawatt-hour (MWh) at 12:42 p.m. in Amsterdam on Monday.

By Charles Kennedy, Oilprice.com / October 21, 2024

China guzzled roughly 16.5 million b/d of the world’s oil supply in 2023, all liquids included. As the world’s second-largest oil consumer, accounting for about 16% of global demand, a peak or plateau in its refined oil product demand is crucial to the oil market. The timing of the peak and the pace of oil demand decline from there on will affect global oil balances and, consequently, oil prices.

“With a total oil demand tripling that of India’s, the world’s third-largest oil consuming nation, China is the only major developing country that is likely to see demand of gasoline and gasoil/diesel to reach a plateau at present or in the near future,” said Kang Wu, global head of oil demand research at S&P Global Commodity Insights. “While oil demand in nearly all developed countries has peaked, the vast majority of developing countries other than China will see their oil demand continue to grow in the foreseeable future.”

“As such, China is a decisive force in determining if and when the global oil demand will peak,” Wu added.

Analysts have varying views on the year when China’s oil demand will peak, but most of them agree the decline will not be so dramatic as to trigger a sharp downturn in global oil demand.

Commodity Insights projects China’s total refined product demand, excluding direct crude burn and all NGLs, will peak in 2027 at 16.4 million b/d. It consumed 15.5 million b/d in 2023. Global refined product demand is forecast to peak in 2028 at 91.5 million b/d, compared with 88.4 million b/d demand in 2023.

However, China’s oil demand growth in the second quarter of 2024 – merely 16 months after reopening from pandemic-related restrictions – has been slower than expected, with a year-on-year reduction in crude throughput. The combination of rapid growth in the displacement of road transportation fuels, muted demand from construction and manufacturing sectors, and extreme weather disruptions hit consumption.

The average utilization of independent refineries in China’s Shandong province fell to 52% in June 2024, the lowest level since March 2020, when the country’s oil demand was slowly recovering from the pandemic outbreak, data from local information provider JLC showed. China’s independent refineries are swing suppliers and their activity directly reflects the country’s oil demand.

Gasoil, the largest component of China’s oil barrel, accounting for about 22% or 3.8 million b/d of the country’s refined product demand, either already has or is close to reaching peak as growing sales of LNG-fueled heavy-duty trucks displace conventional diesel-powered trucks, analysts said.

Commodity Insights expects China’s gasoil demand to peak in 2027 at slightly over 4.0 million b/d. The International Energy Agency (IEA) estimates the demand to grow by 1.5% and 3.1% in 2024 and 2025, respectively, according to its monthly Oil Market Report dated July 11, while a few China-based analysts told Commodity Insights that gasoil demand has already peaked.

State-owned PetroChina’s Planning & Engineering Institute estimated China’s gasoil demand peaked in 2023 and will see a 5% year-on-year decline in 2024 amid sales of LNG-fueled heavy-duty trucks jumping more than 120% and displacing about 612,000 b/d gasoil this year.

CPPEI estimated gasoline demand had also peaked in 2023 at 155 million metric tons per year, or 3.6 million b/d, and has started to decline this year due to the rising proportion of new energy vehicles (NEV) and higher-efficiency internal combustion engine vehicles on the road.

Commodity Insights expects China’s gasoline demand will peak in 2025 at 3.8 million b/d. The IEA projects demand of the fuel to peak at 3.66 million b/d in 2024 and start to fall by 2.3% in 2025. NEV sales accounted for 43.8% of total vehicle sales in July — an all-time high.

January to July sales of battery electric vehicles and plug-in hybrid electric vehicles jumped 31.1% year-on-year, while ICE vehicle sales declined 6.5%, according to data from the China Association of Automobile Manufacturers. Meanwhile, new ICE vehicles are estimated to displace about 2%-3% of gasoline consumption due to improved energy efficiency, a senior refining economist with Sinopec said.

The peaking of China’s gasoline and gasoil demand is decisive in indicating the overall trend in China’s oil demand. Demand for other transportation fuels, led by jet fuel and fuel oil, is expected to continue rising but they account for a smaller proportion of China’s overall oil demand.

It should be noted, however, that when it comes to oil liquids as a whole, including petrochemical feedstocks such as LPG and ethane, it will take a few more years before China’s demand stops growing.

A later peak for gasoil demand, based on some analyst projections, would be mainly due to a more optimistic expectation in the development of China’s construction and manufacturing sectors, information collected by Commodity Insights showed.

Shift to petrochemicals

An earlier-than-expected peak for refined products — estimated mainly by research arms connected with China’s state-run oil companies — would lead to a decline in the country’s crude imports until demand surges for petrochemical products.

Market sources said the demand wave of petrochemical products is unlikely to happen until 2027. Bracing for a demand peak in refined oil products, most refineries in China, whether state-owned or independent, have been heavily investing in facilities to shift to petrochemical production.

However, trade sources in the petrochemicals sector said that China’s ongoing property market crisis, coupled with the economic slowdown, will continue discouraging demand for petrochemical products in the foreseeable future. “It will take a few years for the petrochemical industry to recover from the recession cycle,” the senior refining economist with Sinopec said.

China’s January-July crude imports have fallen nearly 3% year on year, official customs data showed, due to slow demand for refined and petrochemical products. On the other hand, domestic crude output rose 1.6% to 4.3 million b/d in the same period.

Despite the year-on-year decline, crude imports so far in 2024 remain the second highest in history – slightly above the third highest of 10.70 million b/d seen in the same period of 2021, according to customs data.

Medium sour crudes remain in favor

China’s appetite for medium sour crudes is unlikely to change for at least the next five years due to the configuration of Chinese refineries and refining economics, the senior refining economist with Sinopec said. API and sulfur content of the crudes that China imports averaged at 30.5 and 1.57%, respectively, as of June, almost flat to the 30.4 and 1.48% levels seen in 2017.

“There were some up and down between 2017 and 2024, but the changes are more related to price movements of different grades of crude rather than refinery configuration,” Mengbi Yao, a senior research analyst with Commodity Insights said.

Most of China’s refineries are designed to process medium sour crudes, including the new private mega plants and the ones built by Sinopec and PetroChina. Refineries that can process cheaper heavy, sour barrels follow, led by PetroChina’s new Guangdong Petrochemical, as well as the independent refineries in Shandong province.

The Middle East remains China’s top crude supplier by region, with its market share steady at 54.2% in H1 from 54.4% in the same period of 2023, Commodity Insights estimates. The configuration of China’s refining sector has encouraged Saudi Aramco, the world’s top crude producer, to invest in China’s integrated refineries. Aramco has a 30% interest in a planned integrated refinery and petrochemicals complex in Panjin in northeast China.

In March 2023, Aramco acquired a 10% interest in China’s Rongsheng Petrochemical. As of July, it has been in talks with Shenghong Petrochemical and Hengli Petrochemical for potential investments. Saudi Aramco is China’s biggest crude supplier. Its Arab Heavy (API 27.7, 2.87% sulfur) coupled with Arab Medium (API 30.2, 2.59% sulfur) crudes account for more than 63% of the Middle East crudes supplied to China, S&P Global Commodities at Sea data showed.

Meanwhile, most of the brownfield refineries are shifting production from oil products to petrochemical products by adopting the route of naphtha/LPG to ethylene to extend the value-chain, a Beijing-based analyst said.

“Generally speaking, the existing refineries will stick to the most competitive crudes, which are the medium and light grades from the oil-rich Middle East, North Africa, Norway and Guyana,” the Sinopec economist said, adding that the profitability from processing these grades was better due to their lighter yields, although the heavy barrels are cheaper.

“But in the future, when oil product demand slumps and aging refineries are phased out, light feedstocks will be in favor, led with NGL, LPG and followed by light crudes for directly cracking into ethylene, than the conventional route of refining light, medium crudes into ethylene as well as oil products,” the Sinopec economist added.

By: Oceana Zhou / 14 Oct 2024.

Kinaxis^® (TSX:KXS), a global leader in end-to-end supply chain orchestration, announced a co-development deal with ExxonMobil, one of the largest integrated fuels, lubricants and chemical companies in the world, to create supply chain technology solutions designed specifically for the energy sector.

Empowered by the growing demand for energy products that support modern life, the companies will work together to identify supply chain challenges unique to the energy sector and create a potential industry solution to mitigate them.

Kinaxis and ExxonMobil will focus on a supply and demand planning solution for the complicated fuel commodities market which has no industry-wide standard and which relies heavily on spreadsheets and other manual methods. The solution will enable integrated refinery-to-customer planning with timely data for the most accurate supply/demand planning, balancing and signaling. Benefits include automated data visibility, improved inventory management and terminal replenishment, and enhanced supply scenario planning that are expected to enable arbitrage opportunities and decrease supply costs.

In the chemicals and lubricants space, the companies are developing an advanced planning solution that provides manufacturing and logistics constraints management coupled with scenario modelling and evaluation.

Finally, the co-development will fit established sales and operations planning solutions specifically for upstream operations to optimize sourcing, storage and movement of materials and assets to improve utilization and lower costs.

“Last year, we brought together all ExxonMobil supply chain activities and expertise into one centralized organization, creating one of the largest supply chain operations in the world, and through this identified critical solution gaps to enable our businesses to capture additional value,” said Staale Gjervik, supply chain president, ExxonMobil Global Services Company. “Collaborating with Kinaxis, a leading supply chain technology provider, is instrumental in providing solutions for a large and complex business like ours.”

“ExxonMobil is uniquely placed to understand the biggest opportunities in improving energy supply chains, from more accurate sales and operations planning, increased agility in field operations, effective management of enormous transportation networks and adapting quickly to complex regulatory environments,” said John Sicard, Kinaxis CEO. “There is an urgent need to increase efficiency in every step, from extraction to end-user consumption, and we’re looking forward to making a big impact across the sector.”

Operating for more than 140 years, ExxonMobil is one of the largest energy companies in the world; it will bring its deep energy sector knowledge and experience, while Kinaxis will tap into its market-leading supply chain expertise and digital innovation to create techniques and software solutions purpose-built for the sector.

By: Ajot, American Journal of Transportation/ Oct 14 2024

We recently published a list of 8 Best Oil Refinery Stocks To Invest In. In this article, we are going to take a look at where Marathon Petroleum Corporation (NYSE:MPC) stands against other best oil refinery stocks to invest in.

The global oil refining industry has undergone significant shifts over the past few years, driven by geopolitical tensions, changes in consumption patterns, and emerging market demands. As of 2023, the world’s refining capacity was estimated at 103.5 million barrels per day (b/d), according to the U.S. Energy Information Administration (EIA). With the recent disruptions in petroleum markets, such as Russia’s invasion of Ukraine and supply chain challenges due to COVID-19, there is heightened interest in how much refinery capacity will come online in the coming years to meet the rising demand for petroleum products. This interest is primarily centered on new projects expected to be operational by 2028, most of which are in high-demand regions like Asia-Pacific and the Middle East. The EIA’s analysis suggests that between 2.6 million b/d and 4.9 million b/d of additional refining capacity will be added globally over the next four years.

The focus on expanding refining capacity in countries such as China, India, and those in the Middle East stems from their rapid economic and population growth, which translates into a rising need for refined petroleum products. While countries in the Atlantic Basin, including the United States and Europe, have seen stagnating demand, the Asia-Pacific and Middle Eastern markets continue to grow robustly. These regions have also experienced increased investments in refining projects. For instance, Saudi Aramco has consistently been the largest investor in refinery capital expenditures, allocating over $9 billion annually since 2017, while China and India collectively contributed between $15 billion to $28 billion each year.

In contrast, refiners in the Atlantic Basin are expected to face slower demand growth and fierce competition. Refineries in these regions may encounter additional headwinds due to planned closures and the transition to renewable energy sources, which is further complicated by supply chain disruptions and geopolitical conflicts. Refinery expansions in countries like Nigeria and Mexico will also contend with distinct market conditions compared to the surging demand in Asia and the Middle East. Recent geopolitical tensions, such as Houthi attacks in the Red Sea, have increased shipping costs and further isolated the Atlantic and Pacific markets, reinforcing these divergent trends.

The story between Nvidia (NVDA) and SoftBank dates back to 2017, when Masayoshi Son, the investment company’s founder, acquired a $4 billion stake in the chipmaker.

At the time, Nvidia was already making waves with its cutting-edge graphics processing units, which were becoming essential in fields beyond gaming, including artificial intelligence and data centers.

Nvidia was struggling in 2019, with its share price nearly cut in half from its 2018 high. SoftBank sold its stake in Nvidia in 2019, just two years after the initial investment, pocketing more than $3 billion.

But if SoftBank had held on to its original investment in Nvidia, it would be valued more than $15 billion as the chipmaker soared 2600% over the past five years.

What Q3 Big Tech earnings show

Widespread demand for AI-optimized chips, particularly the Blackwell GPUs, is fueling Nvidia’s ascent. These graphics processing units are increasingly used in data centers as they handle the heavy lifting required to train and operate large AI models efficiently.

Nvidia’s major clients include Google parent Alphabet, Microsoft, Meta, and Amazon. Each depends on Nvidia’s technology to develop AI-driven applications and services for cloud data center customers.

The demand for Blackwell chips is so intense that industry heavyweights are vying for a slice. In a now-famous dinner, Oracle’s Larry Ellison and Tesla’s Elon Musk reportedly urged Nvidia CEO Jensen Huang to “take more of our money.”

It’s part of the reason Apple (AAPL) decided to ditch the company’s processors in favor of designing its own Arm-based chips. Since then, Apple has managed to squeeze out more power and battery life from its systems than ever before.

Qualcomm and its Snapdragon X Elite chips also offer impressive battery life compared to competing Intel-based machines. But the second-gen Core Ultra is set to change that, using less power while offering comparable performance.

Intel’s Client business is still incredibly important, bringing in the majority of the company’s revenue, so any potential to increase sales there could be a boon for the chip builder.

By: Attiya Zainib, Finance.yahoo / October 12, 2024

Crude may be back near $80 a barrel, but major oil companies have just given a reminder of how October’s rally is built on shaky foundations.

Shell Plc and BP Plc published third-quarter trading updates this week, and both commented on the weakness of a key part of their businesses: refining.

On Monday, Shell said the margin earned for processing crude sank by 29% in the period. Its chemicals division — also a bellwether for the strength of the wider economy — expects to report a “marginal loss.” Strong gas production was one of a few bright spots.

BP followed on Friday with another warning flag: an increase in its net debt. This core metric has fallen in recent years — from $40 billion in 2020 to about $23 billion at the end of the second quarter — as high energy prices boosted profits.

Now, feeble refining income has halted the downward trend, while a change in the timing of asset-sale payments was also a factor.

These aren’t just issues for the European majors. On Oct. 3, Exxon Mobil Corp. said lower crude prices and poor refining margins would reduce earnings by $1.6 billion quarter-on-quarter.

Profits from processing are closely tied to demand for road fuels, so the decline indicates broad weakness in the global economy — notably in China, but also in the US and Europe.

True, much has changed since the end of the third quarter. Beijing has taken steps to stimulate a faltering economy, though market movements suggest investors remain unconvinced about the scale of the assistance.

On the supply side, jitters about the risk of a wider conflict in the Middle East have pushed oil prices up about 10%.

Either of those drivers could send crude — and the majors’ profits — higher in the fourth quarter.

But if Iran and Israel step back from the brink of all-out war, this week’s company reports show there’s little else around to support the market.

Attempts to protect the world’s rainforests are badly off track — and in the public mind, electric vehicles are increasingly to blame. Felling of tropical woodlands resulted in greenhouse pollution equivalent to 3.7 billion metric tons of carbon dioxide last year, the Forest Declaration Assessment said this week. Indonesia was the biggest culprit, and many people assume it’s largely about the nickel used in EV power packs. Yet the far bigger threat to the nation’s forests is palm oil, writes Bloomberg Opinion’s David Fickling.

By: Bloomberg James Herron, / 11 October 2024.

Oman Tank Terminal (OTTCO) is likely to award the FEED consultancy services contract for the expansion of the Ras Markaz Crude Oil Import/Export and Storage Terminal, located approximately 70 kilometres south of Duqm, in the first quarter of 2025.

The tender was issued on 21 August 2024, with a bid submission deadline of 6 October 2024.

The contract is expected to be awarded by January 2025, with completion targeted for fourth quarter of 2027, the source close to the project told Zawya Projects.

The expansion project aims to significantly increase the terminal’s crude oil storage capacity, which currently holds 5.2 million barrels. The terminal, built by China Petroleum Pipeline and Engineering Company, has a designed capacity of 26.7 million barrels of crude oil storage with future expansion planned in five phases (1.1 to 1.5) up to 200 million barrels.

The current built capacity of the terminal is 5.2 million barrels of crude oil storage at the completion of Phase 1.1.

The expansion will also include new crude oil storage and handling facilities, pipelines, offshore import/export infrastructure, and provisions for renewables such as green hydrogen and petrochemicals.

The selected FEED consultant will be responsible for concept and feasibility studies, detailed engineering designs, cost estimations (capex and opex), and project execution plans for the expansion as well as modification of existing facilities. The consultancy will also provide technical support throughout the project lifecycle, ensuring optimisation and integration of existing facilities and infrastructure.

 By: Zawya Projects / October 9, 2024

Fujairah’s Oil Industry Zone, a key player in the world oil market, released new data showing changes in its massive refined oil storage, suggesting broader shifts in oil supply dynamics.

Situated in the Middle East, Fujairah has the largest commercial storage for refined oil products globally, highlighting its strategic significance. The recent update for the week ending October 7, 2024, showed Light Distillates rose to 6,687 thousand barrels, Middle Distillates fell to 2,142 thousand barrels, and Residual Fuels dropped to 7,191 thousand barrels. These variations indicate shifts possibly driven by changing supply and demand, geopolitical tensions, or seasonal trends. As a global oil trend indicator, Fujairah’s data is crucial for traders and analysts aiming to predict price movements and adjust supply chain strategies.

The inventory changes from Fujairah provide insights into global supply and demand dynamics. The rise in Light Distillates and declines in Middle and Residual Fuels storage can influence global prices, pushing traders to adjust strategies. Given Fujairah’s strategic influence, these insights might shape investment and trading approaches in the oil industry.

Fujairah’s storage data is a key indicator of global economic health and geopolitical stability. Shifts in storage levels might reflect larger changes, from geopolitical tensions affecting supply routes to economic policies influencing demand. By monitoring Fujairah, businesses and governments can better anticipate changes in the global oil supply chain, potentially driving policy adjustments and strategic decisions.

By: Finimize Newsroom, 09/10/2024

The shipping industry faced significant challenges in the first half of 2024. The sector is responsible for transporting about 90% of global trade, including large quantities of crude oil, iron ore, and grain, and has been essential to the global economy. The volume of seaborne trade, which has more than doubled since 1990, is expected to triple by 2050. However, recent geopolitical conflicts, extreme weather events and logistical bottlenecks have tested the industry’s resilience.

To navigate these challenges, shippers are being forced to adapt their operations in real-time. This has increased the need for innovative solutions that prioritize flexibility and data-driven decision-making to mitigate against ongoing disruptions.

Evolving Supply Chain Capabilities

The evolution of supply chain technology has allowed the shipping industry to enhance its operational capabilities. Automation, real-time tracking and improved throughput have helped manage the heavy volume growth experienced during the pandemic, but recent challenges have highlighted the need for even more robust strategies.

For instance, the ongoing conflict in the Red Sea has forced carriers to bypass the Suez Canal and reroute around the Cape of Good Hope, extending transit times and reducing the overall capacity of container ships. Compounded by extreme weather conditions, such as hurricanes and storms, ships traveling along the Cape have experienced further delays. These factors, alongside congestion at key ports, resulted in global ocean shipments averaging 66 days from initial booking to clearing the final port in Q2 2024. This represents a two-day increase from Q1 and an eight-day year-over-year (YoY) rise from Q2 2023.

Managing the Panama Canal and Geopolitical Strains

One of the most notable chokepoints, the Panama Canal, has been severely impacted by drought conditions, leading to traffic restrictions and water shortages. Shipments from Asia to North America averaged 63 days in Q2 2024, an increase of seven days over the same quarter of the previous year, while Asia-to-Europe shipments saw an increase of 14 days during the same period. While the Panama Canal Authority has announced plans to increase vessel throughput, these changes may take time to alleviate the backlogs caused by water shortages and traffic restrictions.

Further compounding the issue, geopolitical instability and climate-related disruptions have led to prolonged shipping times across major trade routes. Europe-to-Asia shipments averaged 84 days in Q2 2024, an 11-day YoY increase, while South America-to-Asia routes experienced the sharpest rise, averaging 87 days, up 15 days YoY. 

These delays are largely the result of port congestion, extended transit times, and longer booking periods, all of which strain an already burdened system.

Achieving Operational Efficiency 

Given these persistent challenges, shippers must rely on data-driven insights to optimize operations and navigate the volatile logistics landscape. By analyzing historical trends and real-time data, companies can better anticipate delays and adjust their operations accordingly. This proactive approach allows for improved cost-efficiency, enhanced agility, and more effective planning in the face of unpredictability.

At the same time, broader economic factors are also influencing global trade. Food prices, for example, have risen due to a combination of factors stemming from supply chain disruptions. Fuel costs further impact transportation and food supply chains, contributing to higher prices for consumers. While the shipping industry adapts to these pressures, economic slowdowns in major production hubs like China have compounded the situation, leaving end-point retailers with excess inventory and reducing demand for outbound shipments.

As these trends continue, shippers must adopt a proactive, strategic approach to ensure they can mitigate future disruptions. With geopolitical instability, extreme weather and evolving consumer behaviors likely to persist, the future of global trade will depend on the industry’s ability to adapt and innovate.

Embracing Technological Solutions

The future of shipping success depends on flexible, tech-enabled supply chain solutions. Modern advancements in supply chain management technology offer key tools to help navigate the complexities of today’s logistics environment.

To manage these disruptions effectively, supply chains must be flexible and adaptable rather than rigid and prone to breaking under pressure. The solution lies in fully utilizing advancements in supply chain management technology, which can help navigate the complexities of modern logistics, conflicts, and regulations.

Real-Time Tracking: Modern tracking systems provide immediate visibility into the status and location of shipments, allowing companies to quickly adapt to changing conditions. This enables swift rerouting and scheduling adjustments, minimizing delays, and allowing for proactive responses to emerging threats.

Connected Network: A seamlessly integrated network of supply chain participants, all validated and operational, capable of providing alternative solutions when disruptions occur. Rather than relying on ad hoc integration during crises, this system should function as a plug-and-play model, built on a well-defined and carefully curated network, ready to facilitate business continuity efficiently.

Data Analysis: Advanced analytics offer insights into the risks posed by various shipping routes and potential disruptions. By analyzing data from multiple sources, companies can predict and prepare for challenges, allowing for more strategic planning and decision-making in global shipping.

Navigating New Trade Routes: With real-time tracking and data analysis, businesses can assess new shipping routes based on safety, cost and transit time. This allows them to reroute shipments effectively, ensuring goods reach their destinations despite disruptions.

Optimizing Inventory Management: As transit times increase and costs rise due to high-risk areas, effective inventory management becomes crucial. Technology helps monitor inventory across locations, optimizing distribution to prevent stockouts and overstocking, even with extended delivery times.

Efficient Rerouting: Data-driven tools evaluate different routing options, identifying the most cost-effective and efficient alternatives. This capability is critical for maintaining operational continuity in the face of geopolitical and logistical disruptions.

The shipping industry faces unprecedented challenges in 2024, from geopolitical tensions to extreme weather and logistical bottlenecks. As global trade continues to expand, the pressure on shipping operations will only intensify.

In an increasingly unpredictable global market, the ability to adapt quickly and make informed decisions will be key to sustaining efficient operations and meeting growing consumer demand. By adopting these approaches, the shipping industry can better position itself to overcome current obstacles and prepare for future disruptions, ensuring the continued flow of global trade.

By: Supplychainbrain, Karim Jumma / October 9, 2024.

Korea and Singapore signed deals to ensure supply chain resilience in the energy and biotech sectors as the two countries’ leaders held a bilateral summit on Tuesday.
 
President Yoon Suk Yeol and Singapore’s Prime Minister Lawrence Wong held a bilateral summit during the Korean leader’s state visit to discuss strengthening cooperation in trade and investment, artificial intelligence (AI), digital technology and startups.
 
The two countries signed a Supply Chain Partnership Arrangement, or SCPA, the first deal of its kind, agreeing to enhance bilateral cooperation on supply chains for strategic materials in the energy and biotechnology industries, extending beyond raw materials.  
 
Korea, as the world’s third largest importer of liquefied natural gas (LNG), and Singapore, a global logistics hub, also signed a memorandum of understanding (MOU) for cooperation in LNG supplies, a move expected to contribute to the stability of the international supply chain, Yoon said in a joint press conference with Wong.  
 
Through the LNG MOU, the state-run Korea Gas Corp., or Kogas, and Singapore’s Energy Market Authority will be able to swap or jointly purchase gas to lower purchase prices when necessary, depending on each country’s LNG inventory level. Singapore is the world’s fourth-largest LNG re-exporter.  

In the joint press conference after the bilateral summit, Yoon highlighted that the two countries have “strived together towards national development over the past half-century,” calling Singapore “a key partner with whom we will pioneer the future together.”  
 
Under the new SPCA, the two governments will hold an emergency meeting within five days of detecting signs of supply chain disruptions and operate a joint crisis response system. This marks the first bilateral supply chain partnership arrangement signed by either government with another country.
 
It upgrades a multilateral supply chain agreement established through the U.S.-led Indo-Pacific Economic Framework, or the IPEF, initiated by the Joe Biden administration in 2022.
 
The two sides also discussed methods of procuring strategic material from third countries.
The two leaders further agreed to work together in the startup and cutting-edge technology sectors, leveraging Korea’s expertise in semiconductors, batteries and vehicles and Singapore’s strengths in AI, biotech and energy.
 
The two sides also signed MOUs on technological cooperation, food safety, and SMEs and startups.  
 
Korea established a startup center in Singapore in 2020, its first in Southeast Asia, to support Korean companies entering the region.
 
Korea and Singapore also signed an extradition treaty to step up bilateral judicial cooperation and enable the smoother arrest and extradition of fugitives in each other’s countries.  
 
During the joint press conference, Wong referred to the two countries as “Asian tigers” who transformed their economies and share a vision of a “rules-based global order.”  
  
Korea and Singapore are working to establish a strategic partnership next year, which will mark the 50th anniversary of the establishment of diplomatic relations, according to the two countries’ leaders.
 
The two sides further agreed to cooperate on regional security issues, including North Korea’s nuclear and missile threats, ahead of the upcoming Asean meetings in Laos this week.  
 
Korea and Singapore also want to upgrade their bilateral free trade agreement (FTA), which went into force in March 2006.
 
Yoon also met with Singaporean President Tharman Shanmugaratnam and former Prime Minister Lee Hsien Loong.
 
Yoon and first lady Kim Keon Hee were hosted by Prime Minister Wong and his wife for a luncheon at the Singapore Botanic Gardens. The presidential couple also had an orchid named in their honor.

Later Tuesday, Yoon visited Hyundai Motor Group’s Global Innovation Center in Singapore’s Jurong Innovation District, an industrial complex, accompanied by Hyundai Motor Group Executive Chair Euisun Chung.
 
The center, completed in November last year, is a futuristic factory where AI technology and robotics are employed in a cell-based production system to manufacture cars instead of traditional conveyor belts.
 
“Ford’s conveyor belt 100 years ago and Toyota’s just-in-time production 50 years ago were important examples of innovation, and now Hyundai Motor Group’s method of combining AI and robots is leading innovation,” Yoon said during the visit. “The spread of AI has increased the productivity of the Korean manufacturing industry.”  

Yoon later attended the Korea-Singapore business forum with some 250 officials and business executives from the two countries, including the heads of Korea’s top conglomerates, such as Samsung Electronics Executive Chairman Lee Jae-yong and Hyundai Motor’s Chung.
 
The two sides signed a total of 17 MOUs and agreements on the occasion of Yoon’s state visit, the presidential office said. This included 10 MOUs signed through the business forum covering fields such as energy, LNG, joint research and K-pop.
 
The Singaporean presidential couple were set to host a state banquet for Yoon and Kim.
 
On Wednesday, Yoon is scheduled to give an address on his unification vision.  
 
Yoon arrived in Singapore on Monday for a three-day state visit, the second part of a three-country Southeast Asia tour that will take him to Laos for a series of Asean-related meetings and bilateral talks. 
 
Japan’s new Prime Minister Shigeru Ishiba confirmed he is set to make his diplomatic debut with a visit Vientiane in Laos. This could be an opportunity for Yoon to hold his first bilateral talks with Ishida.  

By: Sarah Kim, Koreajoongangdaily / 08 Oct. 2024