CONCORDIA MARITIME'S 2019 ANNUAL
GENERAL MEETING WAS WELL ATTENDED
Over a hundred shareholders gathered on this sunny spring day to attend Concordia Maritime's Annual General Meeting, which took place on 25 April at the Elite Park Avenue Hotel on Kungsportsavenyn in Gothenburg. The Sulphur Directive IMO 2020 and the pros and cons of installing scrubbers was the single most important topic of discussion during the meeting.
Board members Carl-Johan Hagman, Stefan Brocker, Mats Jansson, Helena Levander and Michael G:son Löw were re-elected, and Henrik Hallin was newly elected. Carl-Johan Hagman was named Chairman of the Board. The Meeting also resolved that no dividends would be paid for the fiscal year 2018.
President Kim Ullman began his speech by noting that 2018 had largely been a tough year, and indeed the tanker market has been the worst since the 1990s. At the same time he pointed out that 2019 looks to be the start of the next boom in tanker shipping and that now it’s definitely possible to see a turnaround.
FIVE FACTORS POINT TO A STRONGER MARKET IN SIGHT
- Good global economy and the continued rise in the demand for oil
- Increased OPEC production beginning Q3 this year
- Extensive growth in US oil exports
- The effects of IMO in 2020
- Slower growth in the fleet
Christopher Pålsson and Niklas Bengtsson from Lloyd’s List Intelligence with offices in Gothenburg participated in the meeting and spoke about New Sulphur Directive IMO 2020 and shared general thoughts about energy and oil transportation. It was noted that 86% of energy comes from fossil fuels today and the corresponding figure is likely to be around 78% in 2030. And furthermore that the world consumes around 100 million barrels of oil per day and that more than two thirds goes to transportation.
In essence, however, this aligns with the new global rules for bunker fuel, which as of 1 January 2020 may contain a maximum of 0.5% sulphur. There are different ways to meet the new rules: the use of more or less expensive fuels, like the new permitted 0.5% product, Marine Gas Oil (0.1%), methanol or LNG, or the continued use of high sulphur oil (3.5%) with the installation of scrubbers. Current shareholders were given a thorough review of the pros and cons of different solutions, a highly relevant discussion as the directive will come into force in six months.
How then will Concordia Maritime act on this important issue? Kim motivated his “no” to the installation of scrubbers with the following arguments: that 0.5% bunker oil will be available, that one partially secures the future price of MGO in the futures market that 80-85% of the global tanker fleet (and over 90% of product tankers) will not have scrubbers in 2020 whereupon shipping companies will be able to transfer the higher costs to the customer, that it would involve huge investments and ultimately it probably is not a sustainable solution.
The Q1 report for 2019 was presented and later in the afteronnon a telephone conference was held. The meeting ended with a lively mingle.
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