Thursday, May 28, 2009
Baltic Exchange Daily Summary of Baltic Exchange Dry Indices - 26 May 2009
Baltic Exchange Dry Index 2942 (UP 156)
Baltic Exchange Capesize Index 4797 (UP 454)
Baltic Exchange Panamax Index 2369 (UP 76)
Baltic Exchange Supramax Index 1830 (DOWN 7)
Baltic Exchange Handysize Index 871 (UP 2)
Daily Summary of the Baltic Exchange Time Charter Routes
Rate($/Day) Change
BCI
Average of the T/C routes $50481 (UP 5476)
BPI
Average of the T/C routes $18997 (UP 618)
BSI
Average of the T/C routes $19139 (DOWN 71)
BHSI
Average of the T/C routes $12471 (UP 32)
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Baltic Exchange Capesize Index TM - 26 May 2009
Baltic Exchange Capesize Index 4797 (UP 454)
Rte
Num Description Weight Avg. Move
====== =============================================== ====== ====== =====
C2 160000lt Tubarao -Rotterdam 10 15.755 0.778
C3 150000mt Tubarao - Beilun/Baoshan 15 31.567 1.734
C4 150000mt Richards Bay - Rotterdam 5 13.950 0.941
C5 150000mt W Australia - Beilun/Baoshan 15 13.900 1.286
C7 150000mt Bolivar - Rotterdam 5 16.395 0.718
C8_03 172000mt Gibraltar/Hamburg trans Atlantic RV 10 49000 4500
C9_03 172000mt Continent/Mediterranean trip Far East 5 71192 5230
C10_03 172000mt Pacific RV 20 54231 9423
C11_03 172000mt China/Japan trip Mediterranean/Cont 5 27500 2750
C12 150000mt Gladstone - Rotterdam 10 20.455 1.320
Average of the T/C Routes 50481 5476
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Baltic Exchange Panamax Index TM - 26 May 2009
Baltic Exchange Panamax Index 2369 (UP 76)
Rte
Num Description Weight Avg. Move
====== ============================== ====== ===== ====
P1A_03 74000mt Transatlantic RV 25 22679 506
P2A_03 74000mt SKAW-GIB/FAR EAST 25 26613 39
P3A_03 74000mt Japan-SK/Pacific/RV 25 17445 1136
P4_03 74000mt FAR EAST/NOPAC/SK-PASS 25 9250 790
Average of the T/C Routes 18997 618
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Baltic Exchange Supramax Index TM - 26 May 2009
Baltic Exchange Supramax Index 1830 (DOWN 7)
Rte
Num Description Weight Avg. Move
=== ================================== ====== ===== ====
S1A Antwerp - Skaw Trip Far East 12.5 30461 88
S1B Canakkale Trip Far East 12.5 33120 92
S2 Japan - SK / NOPAC or Australia rv 25 14533 -328
S3 Japan - SK Trip Gib - Skaw range 25 7619 -47
S4A US Gulf - Skaw-Passero 12.5 32444 -6
S4B Skaw-Passero - US Gulf 12.5 12783 8
Average of the T/C Routes 19139 -71
The route(s) below do not form part of the index calculation
S5 W.Africa via ECSA to FarEast 0 23883 -448
S6 Jpn-SK trip via Aus/India 0 14750 -328
S7 EC India - China 0 15657 -121
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Baltic Exchange Handysize Index TM - 26 May 2009
Baltic Exchange Handysize Index 871 (UP 2)
Rte
Num Description Weight Avg. Move
=== ================================================== ====== ===== ====
HS1 Skaw - Passero trip Recalada - Rio de Janeiro 12.5 12200 -36
HS2 Skaw - Passero trip Boston / Galveston 12.5 12136 -28
HS3 Recalada / Rio de Janeiro trip Skaw / Passero. 12.5 17456 -233
HS4 US Gulf trip via US Gulf or NCSA to Skaw / Passero 12.5 19211 -78
HS5 SE Asia trip via Australia to S'pore / Japan 25 10163 144
HS6 S Korea / Japan via NOPAC to S'pore-Japan 25 9221 171
Average of the T/C Routes 12471 32
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Baltic Exchange Daily Fixture/Index List 26/05/2009
BDI 2942 (UP 156) BCI 4797 (UP 454) BPI 2369 (UP 76)
BSI 1830 (DOWN 7) BHSI 871 (UP 2)
Last published BDTI 480 (DOWN 5) BCTI 485 (UP 1)
TIMECHARTER
'Eptalofos' 2007 92567 dwt dely Immingham 24/26 May trip via US Gulf redel Continent $24500 daily - Swiss Marine
'Bahia' 2004 76801 dwt dely dlosp Ghent 25/28 May trip via Orinoco redel China $26750 daily - Pacific Bulk
'RBD Fiuggi' 2008 76500 dwt dely Zhanjiang ppt trip via EC Australia redel China $17500 daily - Pacific Bulk
'Pacific Breeze' 2004 76200 dwt dely Kashima 30/31 May trip via NoPac redel Far East $16500 daily - cnr
'Seaguardian' 1999 75462 dwt dely Xingang 30/31 May trip via NoPac & PG redel PMO $19000 daily - JK Shipping
'Ribbon' 1998 74522 dwt dely Chiba 26/30 May trip via Roberts Bank redel China $16250 daily - Cargill
'Seawind' 1996 74012 dwt dely Amsterdam 28/31 May trip via Baltic redel Skaw-Cape Passero $22000 daily - Oldendorff
'Pacific Prospect' 1993 73630 dwt dely Rizhao 26/28 May trip via EC Australia redel China $15250 daily - cnr
'Omegas' 1997 73606 dwt dely PMO 24/26 May trip via Richards Bay redel Skaw-Cape Passero $12000 daily - Swiss Marine
'Alpha Effort' Bunge relet 1999 72844 dwt dely Shanghai 30/31 May trip via Australia redel Singapore-Japan rge $16500 daily - BHP Billiton
'Nikos O' 1982 63100 dwt dely Hong Kong spot trip via Indonesia redel WC India $13000 daily - Armada
'Lowlands Patrasche' 2007 58790 dwt dely Richards Bay early June trip via East Coast South America redel Continent approx $15000 daily - Cargill
'Ocean Morning' 2001 52404 dwt dely retro passing Durban 23 May trip via East Coast South America redel Singapore-Japan $22250 daily - Bunge
'Achilleus' 2001 50992 dwt dely Nemrut Bay early June trip via Black Sea and PG redel PMO $36000 daily - MSA Dubai
'Oceanic Angel' 1999 46677 dwt dely retro sailing Japan 20 May trip via Chile redel Singapore-Japan $14000 daily - cnr
'Grand Fortune' 1984 38248 dwt dely passing Durban prompt trip via east coast South America redel Mediterranean $11000 daily - Transgrain - <fixed end of last week>
'Armstrong' 1995 27900 dwt dely Jakarta prompt trip via West Australia intention salt redel Southeast Asia $12000 daily - Tri-net - <fixed end of last week>
'CN Jumbos' 1995 27321 dwt dely Kaliningrad spot trip via Poland redel Algeria $15000 daily - Glencore
PERIOD
'C.Vision' 2008 174000 dwt dely retro Rizhao 20 May 3/5 months trading redel worldwide $45000 daily - BHP Billiton
'Gaurav Prem' 2005 73901 dwt dely Kandla 26/31 May 4/6 months trading redel worldwide $18000 daily - GMI
'Great Creation' 1998 27383 dwt dely Changjiangkou 1/5 June 12 months trading redel worldwide $10000 daily - Cosbulk
ORE
'Cape Jupiter' 1997 160000/10 Dampier/Qingdao 3/12 June $13.35 fio scale/30000sc - Rio Tinto
COAL
Yun Tong Hai' 1990 70000/10 Dalrymple Bay/Rizhao 27/30 May $14.00 fio 25000sc/15000sc 12 hours tt - Rizhao Steel
TNT Dry Freight Review - May 26, 2009
PANAMAX
=======
Atlantic Panamax business was steady/slightly up today as sources reported only
a limited offering of new business, particularly on the trans-Atlantic trades.
There was said to be some hope of cape splits as talk circulated that cape
owners were asking for tremendous gains on runs to the East. However, this was
discounted as very unlikely by most. Tight tonnage availability continued to
provide support to the market. Out of the Pacific, rates were said to be
firming on short tonnage lists and good demand. The Baltic Panamax index rose
76 today to 2369.
Out of the Atlantic came word that Norden has reportedly fixed the 2006-built
76,465 dwt Maritime Baqui with spot delivery Portbury for a trip via the Baltic
and redelivery UK-Continent range at $28,000 daily.
The 2004-built 76,801 dwt Bahia has gone to Pacific Bulk with May 25-28 delivery
dlosp Ghent for a trip via Orinoco with redelivery China at $26,750 daily.
The 2004-built 76,616 dwt Medi Vitoria went on subjects to EDF with May 30-31
delivery Cape Passero for a trans-Atlantic run with redelivery Skaw-Cape Passero
at $25,500 daily.
Louis Dreyfus was linked with the 2001-built 74,600 dwt Altair for June 11-20
delivery east coast South America for a trip with redelivery in the East at
$24,500 daily plus a ballast bonus of about $600,000.
The 2007-built 92,567 dwt Eptalofos has gone to Swiss Marine with May 24-26
delivery Immingham for a trip via the U.S. Gulf and redelivery Sweden/Finland
range at $24,500 daily.
The charterer also fixed the 1997-built 73,606 dwt Omegas with May 24-26
delivery passing Muscat outbound for a trip via Richards Bay with redelivery
Skaw-Cape Passero range at $12,000 daily.
It emerged that the 1996-built 74,012 dwt Seawind went to Oldendorff late last
week with May 28-31 delivery Amsterdam for a trip via the Baltic and redelivery
Skaw-Cape Passero at $22,000 daily.
Atlantic period business included reports that the 2000-built 74,293 dwt Great
Intelligence has fixed with Norden for end-May/early-June delivery in the
Atlantic for 4-6 months trading with redelivery worldwide at $25,000 daily and
the first leg said to be USEC/India business.
Proline fixed the 1995-built 70,728 dwt Voge West with May 28-30 delivery Brake
for about 3-5 months trading at $19,500 daily.
In the Pacific, JK Shipping agreed a firmer $19,000 daily for the 1999-built
75,462 dwt Seaguardian with May 30-31 delivery Xingang for a trip via NoPac and
the Persain Gulf, with redelivery passing Muscat outbound at $19,000 daily.
The 2002-built 76,634 dwt CSE Harmony Express has fixed to an undisclosed
charterer with spot delivery Jintang for a trip via Australia and redelivery
China at $19,000 daily.
Pacific Bulk reportedly took the 2008-built 76,500 dwt RBD Fiuggi with prompt
delivery Zhanjiang for a trip via east coast Australia and redelivery China at
$17,500 daily.
An unnamed charterer will pay $16,500 daily for the 2004-built 76,200 dwt
Pacific Breeze with May 30-31 delivery Kashima for a trip via NoPac and
redelivery in the Far East at $16,500 daily.
BHP Billiton has the 1999-built 72,844 dwt Bunge-relet Alpha Effort with May
30-31 delivery Shanghai for a trip via Australia with redelivery Singapore-Japan
range.
The 1998-built 74,522 dwt Ribbon has gone to Cargill with May 26-30 delivery
Chiba for a trip via Roberts Bank and redelivery China at $16,250 daily.
The 1993-built 73,630 dwt Pacific Prospect has fixed to an undisclosed charterer
with May 26-28 delivery Rizhao for a trip via east coast Australia and
redelivery China at $15,250 daily.
Armada was linked with the 1982-built 63,100 dwt Nikos O for spot delivery Hong
Kong on a trip via Indonesia with redelivery west coast India at $13,000 daily.
For voyage business, the 1990-built Tun Tong Hai fixed to Rizhao Steel with May
27-30 loading 70,000 tons 10% ore from Dalrymple Bay to Rizhao at $14.00.
For Pacific period business, an unnamed charterer has the 2007-built 75,149 dwt
Louis Dreyfus-relet Ecostar G.O. with end-May delivery southeast Asia for 4-6
months trading and redelivery worldwide at about $20,000 daily.
The 2006-built 74,444 dwt Garv Prem has reportedly fixed to STX Pan Ocean with
June 10-25 delivery east coast India for 4-6 months trading and redelivery
worldwide at $18,750 daily.
CAPESIZE
========
Atlantic Capesize activity was very limited today. The basin appeared to have
trouble shaking off the lethargy of a Bank Holiday in the UK and Memorial Day
activities in the U.S. yesterday. Owners were also said to be demanding rates
for trips out at levels not seen since early-to-mid-last year. According to the
Baltic Exchange, owners asked $80,000 daily for trips out this morning. Pacific
Capesize business took off today, with rates in the Pacific basin roaring back.
An Australia round fixed with modern tonnage at a very strong $59,000 daily.
Period business of about 1-years trading said done at $27,000 daily. The
Baltic Capesize index soared a stunning 454 today to reach 4797.
From the Atlantic, the 2007-built 171,810 dwt Cargill-relet Anangel Vision was
reported fixed to SK Shipping with June 15-30 loading 170,000 tons ore from
Tubarao to Qingdao at $33.50, or optionally $35.00 if Ponta da Madeira/Qingdao.
Pacific Capesize business saw Rio Tinto take the 2003-built 176,298 dwt Lowlands
Sunrise with prompt delivery south China for a trip via Australia and redelivery
China at $59,000 daily.
The 2001-built 174,000 dwt Corus-relet BW Arctic has fixed on subjects to the
same charterer with June 05-10 delivery Qingdao for a trip with redelivery in
the East at $58,000 daily.
Rio Tinto was linked with the 2004-built 169,724 dwt Aigaion for June 01-05
delivery China for a trip with redelivery in the East at about $56,000 daily.
In addition, the charterer has the 2006-built 174,008 dwt Scope for June 01-05
delivery China for a trip with redelivery in the East at about $52,000 daily.
Vitol was said to be the charterer of the 2000-built 169,150 dwt Marvellous with
June 04 delivery Qingdao for a trip via west Australia and redelivery China at
$55,000 daily.
The 2009-built 171,000 dwt Cosbulk-relet Maha Anosha fixed to Elcano with June
02 delivery Caofeidian for a trip via Saldanha Bay and redelivery Koper at about
$26,000 daily.
In voyage business, Rio Tinto Shipping was linked with the 1997-built Cape
Jupiter for June 15-30 loading 160,000 tons 10% ore from Dampier to Qingdao at
$13.35.
The 2005-built 175,086 dwt Tey May has gone to BHP Billiton with June 10-15
loading 170,000 tons 10% ore from Port Hedland to China at $13.25.
In Pacific period business, the 1995-built 151,688 dwt China Act has fixed to
Bunge with end-June delivery China for 12-14 months trading and redelivery
worldwide at $27,000 daily.
It emerged that the 2008-built 174,000 dwt C. Vision fixed to BHP Billiton last
week with May 20 delivery retro-Rizhao for 3-5 months trading and redelivery
worldwide at $45,000 daily.
HANDY/SUPRAMAX
==============
Out of the Atlantic it was a fairly quiet day for the Handy sector. Holidays in
the U.K. and U.S. yesterday were still slowing trade today, and rates appeared
to be a touch softer, particularly in the south Atlantic, according to sources.
There was also said to be a longer list of available early vessels weighing on
the market. Pacific business was also slow today, but sources were reporting
steady-to-slightly-firmer numbers. The Baltic Supramax index was off 7 at 1830,
while the Handysize index edge up 2 at 871.
Atlantic Handy business heard that MSA Dubai has the 2001-built 50,992 dwt
Achilleus with early-June delivery Nemrut Bay for a trip via the Black Sea and
Persian Gulf, with redelivery passing Muscat outbound at $36,000 daily.
Bunge has the 2001-built 52,404 dwt Ocean Morning with May 23 delivery
retro-passing Durban for a trip via east coast South America and redelivery
Singapore-Japan range at $22,250 daily.
Glencore agreed $15,000 daily for the 1995-built 27,321 dwt CN Jumbos for spot
delivery Kaliningrad on a trip via Poland with redelivery Algeria.
The 1995-built 45,000 dwt Great Majesty has fixed to NYK with spot delivery
Nigeria for a trip via Paranam and redelivery Norway at $15,000 daily.
The 2007-built 58,790 dwt Lowlands Patrasche went to Cargill with June 01-05
delivery Richards Bay for a trip via east coast South America and redelivery on
the Continent at $15,000 daily.
Out of the Pacific basin, the 1999-built 46,677 dwt Oceanic Angel fixed to an
unnamed charterer with May 20 delivery retro-sailing Japan for a trip via Chile
and redelivery Singapore-Japan range at $14,000 daily.
It emerged that the 1995-built 27,900 dwt Armstrong went to Tri-net last week
with prompt delivery Jakarta for a trip via west Australia and redelivery
southeast Asia at $12,000 daily.
German owners set to ink CSAV rescue deal
Patrick Hagen, Hamburg - Wednesday 27 May 2009
GERMAN containership owners were heading for an agreement today to save Chilean line Compañía Sud Americana de Vapores from collapse, just ahead of tomorrow’s deadline.
However, Lloyd’s List understands that some companies do not want to participate in the rescue of CSAV under the given terms.
Owners were asked to disclose their decision by Wednesday night to the steering committee led by Henning Winter, a former member of the managing board of Deutsche Schiffsbank.
The signing of the contracts is planned for tomorrow.
Participants in the negotiations confirmed that most affected German owners had agreed to take part in the effort to prevent the stricken line from bankruptcy.
Their agreement is understood to be a condition for CSAV’s shareholders to back the first capital increase which the line needs for survival.
Shipowners, lawyers and the line have been in negotiations since early April, when CSAV held a meeting in Hamburg at which owners were asked to accept reduced charter payments in exchange for shares in the company.
It remained unclear on Wednesday night whether CSAV’s offer would be affected by the decision of some owners not to support the deal. CSAV had made it a condition that all involved owners take part in the agreement.
CSAV, ranked number 18 in the world in terms of its containership fleet, has 55 ships with combined capacity of 148,000 teu on charter, according to ci-online.
Total fleet capacity now stands at just over 166,000 teu, compared with less than 100,000 teu in 2005.
The ambitious expansion programme of recent years included an order for four 12,600 teu ships and a commitment to charter another quartet of the same size.
Negotiations have not been easy, as owners’ opinions and interests are diverse. The discussions of the last few weeks were described as “intense”, partly because of the time pressure.
Part of the debate revolved round question of whether all owners would be affected in the same way by charter rate cuts, independent of their exposure to the line.
“There were a lot of questions raised and not all owners share all the same interests,” said one participant.
CSAV was said by participants to have been uncompromising in the negotiations, using its threatened bankruptcy as a bargaining tool.
After last month’s Hamburg meeting, CSAV said it had asked shipowners to contribute $400m to its equity base and claimed the plan had met “a positive response”.
Owners said, however, that they had proposed modifications to CSAV’s offer.
As a number of vessels on charter to CSAV are owned by KG one-ship companies, this raised the question of whether the KG company consisting of individual investors, or the KG house that initiated the KG fund, would receive the shares.
This could result in tax problems, said one manager of a German KG house. Owners and KG houses wanted to negotiate an extension clause allowing them to route the shares to an associated corporation rather than the KG company.
CSAV has nominated international law firm Freshfields as its legal adviser. The rescue package was developed by HSH Nordbank Corporate Financing, the consultancy arm of ship finance giant HSH Nordbank.
Owners had little alternative but to save CSAV, as an insolvency of the line would mean a huge number of vessels spilling over onto stressed charter markets. “Everybody wants to avoid another Lehman effect,” said a manager close to the negotiations.
German owners were represented in the negotiations by Henning Winter, former member of the managing board of Deutsche Schiffsbank, Jan Dreyer, from Hamburg’s law firm Dabelstein & Passehl, and Herbert Juniel, former head of shipowner F. Laeisz. All are very well-known for their maritime expertise.
Meanwhile, CSAV has revised its Euroatlan service, deploying seven 4,000 teu vessels, of which six will be operated by the Chilean line, and including direct calls at Tilbury and Le Havre, in addition to Rotterdam, Hamburg and Antwerp.
ZIM containers seized following law suit
Manila: A court in Manila, the Philippines, has ordered the seizure of shipping containers belonging to Zim Integrated Shipping Services, after Zim's former local agent, Overseas Freighters Shipping, filed a damages suit, writes news website Haaretz. The agent is said to be suing Zim for about NIS 16.6 million, and the containers are worth an estimated 74.5 million pesos (about NIS 6.3 million).
Overseas contends that Zim is in breach of contract for terminating the 30-year business relationship between the two companies, after Overseas agreed to sell 40% of its agency to Liberty Ships, another local company. Zim refused to ratify the agreement, claiming it was not committed to the sales deal. The court ordered the seizure of 475 Zim containers, which Zim claims were undervalued by the court.
Zim and two Israeli nationals, Danny Hoffman and Hani Kalinski, have countered Overseas' suit with a petition to the Manila Regional Trial Court, claiming that the seizure order was issued "maliciously, with evident bad faith, and undue haste." The petitioners have asked that the seizure order be lifted, arguing that the court had no jurisdiction over the case.
Zim's dire financial straits, caused by a sharp decline in marine shipping and the global credit crunch, have prompted the company to look for escape clauses from many of its contracts, in order to lower its liabilities. A few weeks ago China Shipping threatened to sue Zim for $100 million after the Israeli company ostensibly backed out of a leasing agreement for space in the Chinese company's ships that ply the route from China to Europe. Zim also recently announced it would be paying a $30 million fine to a Taiwanese shipbuilder for canceling a purchase contract for six ships worth $230 million.
Zim, an Israel Corporation member company, lost $199 million in the fourth quarter of 2008 and $332 million for the entire year, mainly due to fluctuations in fuel prices and lower revenues from marine shipping services. Before the global economic crisis hit, Zim signed contracts for the construction of 23 ships, at a cost of $3.2 billion, scheduled to be delivered during 2009-2012. Now Zim is trying to cancel those contracts and streamline its operations by leasing space in other companies' ships, reducing activity on certain shipping routes, laying up 20 ships (20% of the company's shipping capacity), and trimming its workforce of 700 by 70-100 employees.
Zim declined to comment on this report. [26/05/09]
Wednesday, May 27, 2009
Mitsui O.S.K. Says It May Acquire Bulk Shipping Line
Wednesday, 27 May 2009
Mitsui O.S.K. Lines Ltd., the world’s largest merchant fleet operator, may bid for an overseas bulk- shipping line as plunging demand and the global recession send company valuations tumbling. “We’re willing to spend several tens of billions of yen on an acquisition,” Kenichi Yonetani, a senior managing executive officer at the company, said in an interview in Tokyo yesterday. He declined to elaborate further on possible targets.
Japan’s most profitable shipping line expects to be able to borrow funds as it has avoided the worst of a collapse in commodity-shipping rates by locking in fees through long-term contracts. The rates meltdown, caused by rising capacity and slower Chinese demand for iron ore, has pushed at least four dry-bulk shipping lines into bankruptcy.
“This year is a chance for people who can buy,” Yonetani said. “We don’t see a problem in getting financing from banks to pay for our investment.”
The shipping line’s interest-bearing debt will increase 27 percent to 890 billion yen in the year ending March 31 as the company buys new vessels. The following year, it may increase another 12 percent to 1 trillion yen, he said. The company will pare capital spending in the fiscal year starting April 2011, he added.
Economic Recovery
“In the short term, we may see a further drop in demand but I’m forecasting a recovery in the global economy in 2010,” said Masayuki Kubota, who oversees the equivalent of $1.9 billion in assets in Tokyo at Daiwa SB Investments Ltd. “Demand for iron ore will increase in the long term.” Kubota holds Mitsui O.S.K. shares, he said.
The shipping line fell 0.5 percent to 628 yen at the close of trading in Tokyo. The shares have gained 16 percent this year. Nippon Yusen K.K., Japan’s biggest shipping line by sales, has fallen 22 percent.
Pacific Basin Shipping Ltd., Hong Kong’s largest operator of commodity vessels, has also said it may bid for bulk-shipping lines as plunging rates press weaker players. Armada (Singapore) Pte, Denmark-based Atlas Shipping A/S, Odessa, Ukraine-based Industrial Carriers Inc. and London-based Britannia Bulk Holdings Inc. have all turned to courts for protection from creditors since the rates collapse began last year.
The Baltic Dry Index, a measure of commodity-shipping rates, has plunged 76 percent from a record last year. The measure has more than tripled this year to 2,786 points on May 22 as China’s economic stimulus helps revive demand.
Mitsui O.S.K predicts a profit of 40 billion yen this fiscal year, a drop of 69 percent compared with last year. Rival Nippon Yusen forecasts a 68 percent decline in profit to 18 billion yen.
Mitsui O.S.K. plans to boost its fleet of bulk carriers, tankers and car carriers by 6.5 percent to 740 ships by the end of this fiscal year. Its overall fleet will increase to 900 ships from 861.
Source: Bloomberg
New sloshing guidelines for LNG cargo containment systems
Wednesday, 27 May 2009
Lloyd's Register, the world leader in the classification of LNG carriers, has published a new guidance document for the design of membrane-technology liquid natural gas containment systems. The document is aimed at improving design procedures with respect to sloshing forces, and is the result of a long programme of research and development, including extensive consultation with industry, and an investment of over £700k. The document has been used as part of the appraisal process for the approval of the largest LNG carrier built to date - the Q-Max type ships, of which Lloyd's Register is the lead class.
Sloshing is the motion of a fluid in a partially filled tank which may in sometimes be violent. The principal factors that affect the behaviour of the fluid motion are the tank shape, fill height and the ship's motions. As a consequence of this motion high impact forces can occur on the tank boundaries and this document concerns itself with the design procedures necessary to assess the strength of the tank boundary to these sloshing impacts.
'Sloshing Assessment Guidance Document for Membrane Tank LNG Operations' provides guidance and recommendations on the assessment of sloshing in membrane LNG tanks. It provides design teams with an overview of suitable procedures for assessing the strength of Gaztransport and Technigaz NO96, Mark III cargo containment systems (CCS) and also new containment systems.
Nigel White, Technical Manager, Hydrodynamics, with Lloyd's Register's Marine Product Development team, says, "LNG sloshing is a very complex issue as there are many aspects that are difficult to address explicitly by calculation or testing. Consequently, the assessment of the cargo containment system of membrane LNG ships for sloshing loads is very complicated and there is no single definitive assessment procedure that may be applied. The new document is written as guidance and it provides best engineering practice on the assessment of the CCS and the supporting hull structure. "Several levels of assessment method are possible and these procedures reflect an increasing complexity of analysis which can provide better design assurance. This document gives an overview of these alternative assessment methods with recommended procedures that can be applied. It is then the responsibility of the designer to select appropriate procedures."
The guidance mainly applies to membrane tank LNG ships with a barred fill range typical of the vast majority of membrane tank LNG ships in current operation. It can also be applied for the assessment of membrane tank LNG ships at offshore terminals or for LNG ships with no barred fill range. The document can also form the basis of a sloshing assessment procedure for in-depth investigation on other ship types that store or transport liquefied or liquid cargoes in large tanks and which are expected to experience significant sloshing loads. These include:
• Moss spherical tank LNG ships • LPG ships • offshore storage or production vessels, e.g. FLNG, FSRU applications using membrane (or independent) LNG tanks.
Prior to 2008, the design assessment of the membrane ship containment system was undertaken on the basis of a comparative sloshing assessment procedure, as described in Lloyd's Register's document, 'ShipRight Comparative Sloshing Assessment SDA Procedure, April 2005'. In this procedure, the assessment of the CCS was on the basis of predicting the design sloshing loads using an extensive model test programme and did not cover the explicit assessment of CCS strength aspects. Since then, the rapid increase in ship size, and hence cargo tank size, has rendered this approach inadequate.
Recently there have been several incidents involving damage to LNG membrane tanks and the approach adopted in the document provides guidance on the processes necessary to ensure that these incidents will not recur. Hence, as part of the design process, the designer should undertake a risk assessment and a hazard review to determine all possible failure modes. Having done this, it is then possible to set suitable design appraisal methods and acceptance criteria to show that these potential hazards are clearly controlled.
The document gives guidance to the designer on the use of the following assessment methods: • model testing or computational fluid dynamics (CFD) or a combination of both to derive the sloshing loads • linear and non linear dynamic finite element analysis of the CCS and the supporting hull structure supported by physical testing to derive the structural response and ultimate capacity of the system • assessment methods based on extreme value analysis or structural reliability analysis techniques.
Source: Lloyd’s Register
Slide in trade leaves a glut of capacity
Wednesday, 27 May 2009
As the Eugen Maersk, one of the world’s largest container ships, sits at Tangier Container Terminal, on Morocco’s Mediterranean coast, it is easy to imagine that the world’s transport and logistics industry is in good health. The new port, built in the shadow of the Rif Mountains, is busy and the containers are stacked reasonably high on the vast vessel’s deck.
However, the ship’s bow betrays the problems that have shaken every form of freight transport since the world financial crisis set in last September. The ship, which is on a service from northern Europe to China, is riding high in the water. Nearly all the containers it is carrying back to Asia are empty. Most will wait far longer than they would have two years ago before returning full to Europe.
It is one of many signs of the crisis that has transformed the world’s transport and logistics sectors in the past nine months. The sudden drying-up of credit, including trade finance, and collapsing trade volumes have changed the industry’s concerns completely. Only two years ago, when senior public officials and private business people met in Leipzig for the International Transport Forum, Ron Widdows, of Singapore’s Neptune Orient Lines, warned that the infrastructure of US and other rich-country ports was expanding too slowly to handle breakneck growth in traffic volumes. Container traffic between Asia and Europe was then growing around 20 per cent year on year.
As delegates prepare to meet for this year’s ITF, starting today, the past few months have seen Asia-Europe container volumes drop by about 20 per cent. The trade had grown continuously, despite slowdowns, ever since it started in the late 1960s. US rail volumes are down 17.7 per cent for the year so far, according to the Association of American Railroads, while worldwide air cargo volumes are around 21 to 24 per cent below last year’s levels, according to Iata, the global airline trade association. The picture is replicated across the world, with even Africa’s trade volumes falling after months when the continent was an exception to the sector’s gloom.
The combination of excess capacity and falling demand has caused the rates that many transport operators can charge to slump, by 80 to 90 per cent in some cases. Shippers wanting to send goods from Asia to Europe have sometimes recently been offered a freight rate – the rate the line charges to transport a container – of zero as long as they pay surcharges to cover fuel costs and container handling. In such an environment, costs need to be trimmed fast to conserve cash as shrinking volumes devastate the industry’s finances.
The key question is what trade patterns, and hence what kind of transport and logistics industry, will emerge from the downturn’s other side.
“The mood has changed – everybody is pretty nervous at the moment,” says Jack Short, secretary-general of the International Transport Forum. “We’ve been using figures like 4 per cent decline for the economy, 10 per cent for trade and 20 per cent for transport. The transport sector appears to have had a much sharper downturn.”
The concerns extend to transport providers’ customers, who in many cases are growing worried at the ability of their suppliers to continue transporting their goods. At a conference in London in April, Brett Whitfield, head of global ocean transport for Nestlé, the Swiss food conglomerate, said his company was avoiding some container shipping lines out of fear they could face insolvency.
“Carriers claim current freight rates are not sustainable for them to stay in business,” Mr Whitfield said. “I think they’re definitely not sustainable. The rates we’re currently seeing are actually rather frightening.”
There are similar concerns in the US trucking industry, where rates are also well below those needed to cover full operating costs.
Numerous small trucking companies have gone out of business and YRC Worldwide, one of the largest truckers, has had to renegotiate its loan agreements with its banks after its total tonnage carried in the first quarter fell more than 30 per cent.
In air cargo, according to Warren Tempest, a senior manager at BA World Cargo, part of British Airways, insufficient capacity is being taken out of the market. Much air cargo – 75 per cent of BA World Cargo’s volumes – travels in the bellies of passenger aircraft and passenger traffic has held up better than freight. Yields per tonne have fallen around 20 per cent.
“You have excess of capacity in relation to demand,” Mr Tempest says. “That’s further [put under pressure] by the amount of further capacity out there in the market.”
In his conference presentation, Mr Whitfield also expressed concern about container carriers’ increasing tendency to merge rival services to save costs and fill huge new ships that would otherwise sail half-empty.
Nestlé now sometimes struggles to find two different services on some lanes so that it avoids depending entirely on one service. That is particularly the case for services from the Mediterranean to the US east coast, an important route for the food and confectionery supplier. “We cannot put all our volumes in one ship, so it’s a big problem for us,” he said.
There are general concerns about the robustness of supply chains worlwide, according to Mr Short.
Some bullish industry figures insist that, amid such gloom, now is the time to invest in ports, ships, trains and trucks that will be delivered or completed just as world demand is again straining at restricted capacity.
There are undoubtedly areas where that holds true. Bill Matheson, president of the intermodal division of Schneider National, one of the US’s largest trucking lines, insists it is vital to ensure truckers are trained and retained during the downturn, to avoid the driver shortages that plagued trucking throughout the boom years.
Yet, Mr Short points out, there will also be areas where the remarkable boom following China’s accession to the World Trade Organisation in December 2001 will never be replicated. A leaner, fitter transport and logistics industry is likely to emerge. But it will have some painful adjusting to do.
“The question is whether things will resume on the old path or whether there will be some kind of new path,” Mr Short says. “I would say some of the evidence is that growth will not be so trade-driven in future.”
Source: Financial Times
Higher compliance the main target for OPEC
Wednesday, 27 May 2009
Tanker sector can not hope for more oil cargoes form OPEC’s members, but at the same time will not have to cope with less shipments. Cartel members will not cut again their daily production in the forthcoming summit in Vienna next weekend, as the current level of oil prices at $60 per barrel is more than satisfactory, in a period that world economy struggles to recover from a severe recession. The official confirmation about OPEC’s future action came yesterday by Saudi oil minister, Ali al Naimi. The most powerful cartel’s official made clear that OPEC is unlikely to cut output at its upcoming meeting as indications mounted that the oil producing bloc would resist a temptation to tighten the taps despite wanting higher crude prices. The Saudi minister also voiced concerns about global crude stockpiles, whose tenaciously high levels are being sustained by weak demand linked to the economic meltdown.
On the other hand, OPEC of course will not raise its production and this is logical while demand remains in law levels. Boosting production "will not happen until we are sure that global inventories are reduced to their normal levels," said al-Naimi, whose country is the world's largest exporter of crude. He said world crude inventories are currently at between 61 and 62 days of forward cover and the group wants to see them down to 52 or 54 days.
But, as the prices continue to rise the pressure for new cut of the production will be reduced. The weekly average oil prices of the Organization of Petroleum Exporting Countries (OPEC) rose for a forth week to 57.78 U.S. dollars per barrel last week according to official figures.
OPEC's average daily prices of crude oil even hit 58.75 dollars a barrel on the last trading day of last week, which went on with the upward trend of the international crude oil prices,
Analysts pointed out that the world economy is expected to touch ground and recover in the near future, which can boost oil prices, however, according to the latest prediction of the International Energy Agency (IEA), the world crude oil demand is expected to drop to 83.20 million barrels per day this year, which is 3 percent lower than last year.
As prices remain in acceptable levels, even the most hawkish members, as Iran or Algeria, do not push for further actions. The main target for OPEC and its members is to maintain the current official exporting quotas, something that could be proved difficult if the price of $60 per barrel or more would be a temptation for exporting countries to cheat. Algeria's oil minister on Sunday warned OPEC members' compliance to quotas slipped in April and stood at less than 80 percent and said the producer group was unlikely to cut output at its May 28 meeting.
Chakib Khelil also told Reuters he was worried about high inventories, which he predicted would begin falling as early as this summer, and forecast oil prices rising to $70 per barrel by end-2010 if the economy improves.
But under current circumstances, a new cut of oil production could send the oil prices to very high levels that can hurt the effort of developed nations to overcome the current crisis. And an new rally in oil markets is now extremely possible, as speculators have returned.
Optimism returns in the dry bulk market
Wednesday, 27 May 2009
After several months of dim prospects, which of course haven’t faded (rather the opposite), at least the recent and continuous rallyof the Baltic Dry Index has been enough to allow room for more optimism in the market. With the capesize sector leading the pack, yesterday the BDI managed to post its 18th consecutive rise, to end the session at 2,942 points , while the Capesize Index (BCI) gained an impressive 454 points at 4,797 points. This has brought average time charter equivalent rates up by $5,476 to a total of $50,481, since the sector also gained a further 25% during the course of the previous week. The market has not been at this level since last September. In the period market, several forward fixtures of varying periods were signed on newbuildings at midtwenties levels, depending on vessel type and delivery date.
The news of the day was the deal reached between Australian miner Rio Tinto and Japanese steel Nippon Group, for a price reduction for term iron ore annual contract ranging from 33% up to 44%. Still, as Barry Rogliano Salles (BRS) noted in its latest annual report, frenetic stockpiling in China continues to chase up the market, with Chinese mills apparently anticipating a rise in domestic steel prices later in the year.
BRS also reflected the current trends in terms of dry bulk tonnage supply. “Delays in newbuilding deliveries are also propping up the market: some 200-plus Capes are contractually due for delivery this year, excluding recent cancellations. However, after nearly five months of the year we have seen just 30 Capes handed over, equal to around 5m deadweight. (Around one-fifth of this total was itself delayed from 2008.)
With cancellations slowing and shipowners unable to defer deliveries indefinitely, the theoretical orderbook for 2009-2012 delivery remains around 40m deadweight per year. In short, this suggests shipowners and shippers would be wise to proceed cautiously, despite the fact Cape rates have now returned to 2005/2006 averages” said BRS.
In the panama front, there were still lots of vessels open end May and early June, but owners are not in a hurry to fix out and most are still asking US$16,500/17,000/day for a round voyage. There is still a good supply of coal cargos, mostly from ec Australia but also from Indonesia, NOPAC and South Africa, and it is possible for even prompt vessels to pick up business for the ballast leg. “Charterers are monitoring the market and are reluctant to overpay due to the number of potential candidates, accepting a contract once they approach the deadline for nomination. Some vessels were reported fixed but failed, noted BRS.
GAC joins hands with Bibby Ship Management and DehuTech for ship lay-up solution
Singapore: The GAC Group has formed a strategic alliance with Bibby Ship Management and DehuTech AB to enhance its GAC Ship Lay-Up Solutions (GLUS) service package for owners/operators and ship managers.
Under the partnership, UK-based Bibby Ship Management handles technical management and crew management, while Swedish DehuTech covers the dehumidification aspect of laying-up of vessels, including sale and rental of dehumidifiers. These key service features greatly enhance the existing GLUS portfolio of fully-customisable solutions which also includes ship agency, supply services, FRS (Fire, Rescue and Safety), logistics and a range of lay-up specific services from lay-up preparation and documentation to maintenance and inspection.
‘Since we launched GLUS in March, we have received very good response from the maritime industry,’ says Christer Sjödoff, group vp, GAC Solutions, adding, ‘There is also a strong demand for additional high-quality services. Working with the two best-in-class providers with extensive expertise in their respective fields enables us to expand our servicing offerings through one channel. From the comprehensive range of solutions, clients can pick and choose the scope and extent of services for fully tailored packages that meet the needs unique to their vessel type and area of trade.’
Noting that ship owners are increasingly looking at laying-up vessels to avoid non-profitable journeys and reduce costs in the current economic climate, Stephen Blaikie, Business Development Director at Bibby Ship Management, says that the situation presents a different set of needs and operational challenges.
‘GAC’s experience complements our ship management, technical and crewing expertise very well, and allows us to collectively meet the requirements of owners/operators. This alliance enables us to offer specialist skills such as dehumidification, ship agency and logistics in addition to our more mainstream offer, and moves Bibby Ship Management towards being a one-stop ship management offering,’ he adds. [26/05/09]
KR follows compatriot yards into renewable energy
Seoul: Following its compatriot shipbuilders the Korea Register of Shipping (KR) will make a full-fledged entry into the business of certifying new energies. KR plans to boost the ratio occupied by non-ship classification businesses, centering on new energy, in its total sales to 40% by 2020.
In January this year, KR inaugurated its Energy/Environment Business Unit, recruiting 20 engineers holding doctorate degrees. [27/05/09]
Keppel Cebu workers set to strike
Cebu: Union members of Keppel Shipyard Cebu haveyesterday filed their notice of strike at the National Conciliation and Mediation Board (NCMB), citing grounds of union busting attempts by management.
Dennis Faustino of Buklurang Manggagawang Pilipino, which supports Keppel’s union, claimed that the management violated the Memorandum of Agreement (MOA) entered into by both management and the union last April 8.
In the MOA, the management agreed to stop the redundancy program while the union vowed to withdraw their first notice of strike, which was filed last March when the management offered early retirement to the workers engaged in ship building and ship repair who would be covered by the redundancy program.
The redundancy will mean the loss of 70 percent of 280 regular jobs.
But Faustino said the management did not keep its promise. Keppel management continued with the redundancy program and forced the workers to accept their offer, he added.
The management had been enforcing forced leave to workers since May 18, he added. So far, Faustino said more than 90 regular workers had left.
Faustino said that the management had scrapped the ship repair service to pursue plans of remove 70 percent of their workforce. He said that most workers were in ship repair. The rest were in ship building.
Keppel is rejigging its three Philippine yards with Cebu taking a hit manpower wise. [27/05/09]
STX plans $2bn worth of IPOs
Seoul: South Korea's STX Group said Tuesday it plans to raise 2.5 trillion won (US$2 billion) with the initial public offerings of its four unlisted subsidiaries both at home and abroad. The group has successfully expanded in the past via well timed IPOs and now covers just about every link in the shipping supply chain.
In other fund raising news, Indonesia’s Berlian Laju, a tanker operator, announced plans Monday for a bond issue. [27/05/09]
Box lines ''face $10bn global loss this year''
Keith Wallis, Taiwan - Tuesday 26 May 2009
THE world’s container lines could be heading for collective losses of $10bn this year, according to Mitsui OSK Lines president Akimitsu Ashida.
He said first quarter results from the world’s biggest carriers showed they made total losses of around $2.6bn. Mr Ashida said this was likely to top $3bn if the financial performance of smaller carriers was taken into account.
Extrapolating the first quarter figures over the full year, Mr Ashida said lines could face a total “$10bn loss” in 2009.
Mr Ashida said the first quarter is typically a slack period, with relatively low cargo volumes, while more cargo is expected in the second and third quarters.
But even if there is a recovery in container volumes, he said the large volume of newbuildings that are expected to enter service would depress the market and affect financial performance.
“More cargo in the second and third quarters will be offset by new capacity,” Mr Ashida said on Tuesday during the Asian Shipowners’ Forum, which attracted 118 delegates from shipowner groups in Asia.
Evergreen Marine chairman Arnold Wang said the bottom in the container trades would be reached in the second quarter.
He said carriers including Evergreen Marine had achieved a $100 per teu increase in rates on Asia-Europe routes. Although they initially pushed for a $270 per teu increase, the $100 per box rise “was not so bad”, given box ships were operating at considerably less than full capacity.
He said rates in Asia-Europe trades would continue to improve, while the results on transpacific trades “were not so good”.
Pointing to the container shipping market in general, Mr Ashida said cargo volumes were down by an average of 20% even though more than 500 containerships, totalling around 300,000 teu, were laid up.
By comparison, the number of newbuildings coming into service this year would boost capacity by 13%.
Mr Ashida said there is about 33% of excess capacity. “The gap between supply and demand is widening,” he added.
Mr Ashida said the only options for carriers faced with this capacity imbalance was to increase the amount of tonnage in lay-up, slow steaming and negotiating newbuilding delivery delays with shipyards.
For MOL’s part, he said the company was cutting costs by $200m, but this would only go some way to improving profitability. Ultimately, “rate recovery is the only way” to return to the black, Mr Ashida said.
While there was no discussion within the shipowners’ forum meeting yesterday about possible rate increases, the shipping economics review committee did talk about other options including changes in the bunker adjustment factor.
Mr Ashida, who is retiring as committee chairman to be replaced by NYK Line president Yasumi Kudo, said the chief executives of Asian container lines were urged to handle the downturn in the container trades “in a rational and patient manner to ensure the sustainable operation of the liner business in these trades”.
Asked if the relatively strong intra-Asian trade could be affected by carriers redeploying larger vessels into the sector, Mr Wang doubted most Asian ports could handle the large ships. As a result, he doubted business in the intra-Asia trades would worsen.
• Mitsui OSK Lines may bid for an overseas bulk shipping business as asset valuations tumble in response to plunging demand and freight rates.
“We’re willing to spend several tens of billions of yen on an acquisition,” Kenichi Yonetani, a senior managing executive officer at the group, told Bloomberg.
“This year is a chance for people who can buy,” Mr Yonetani said. “We don’t see a problem in getting financing from banks to pay for our investment.”
IRON ORE CONTRACT PRICE AGREEMENT
26-05-2009
Rio Tinto has announced that a 33% drop in the contract price for iron ore fines for the 2009 financial year has been agreed with Nippon Steel. This is accompanied by a 45% fall in the FY 2009 iron ore lump price. As yet there has been no settlement involving Chinese steel mills.
Despite the decline, this would still leave the iron ore contract price above the level of the FY 2007 settlement.
Tuesday, May 26, 2009
Morgan Stanley: Steel prices may stay at low levels
Monday, 25 May 2009
It is unrealistic to expect a recovery in steel prices and, from the long run, the prices are likely to stay at the level just a little more than the costs, Morgan Stanley said in a report. Constant expansion and the rising level of imports have offset the recent increase in orders, in particular for long products, putting a cap on the recovering prices.
Morgan Stanley remained cautious about the steel industry in Chinese mainland, South Korea and Taiwan Island. The group made forecast about the steel price index in Chinese mainland at $490 per ton in 2009.
Source: CISA