Monday, August 31, 2009
Empty oil tanker sinks near Suez canal
Sunday, 30 August 2009
An empty Panamanian oil tanker sank near the southern entrance of Egypt's Suez canal on Friday as it headed to dry docks for maintenance, maritime sources said. The sources added that the sinking of the ship, which they identified as the "Elli", had not disrupted normal shipping through the busy trade route.
The vessel had a capacity of 59,000 tonnes but was only carrying its own fuel supply of around 60 tonnes, they added.
Authorities from the canal, which connects the Indian Ocean and the Mediterranean Sea, sent out vessels to rescue 24 sailors from the ship before it sank, the sources said.
The ship had travelled from Yemen for repairs in Suez port and had split in half during cleaning, state news agency MENA reported.
Egypt has reported declining revenue from the canal, one of its main foreign currency earners, in recent months as the global slowdown cuts trade volumes between Asia and Europe.
Egyptian authorities plan to use heavy machinery to recover the vessel and investigate the reason for its sinking.
Source: Reuters
EXMAR releases first half results
Sunday, 30 August 2009
The Board of Directors of EXMAR has drawn up the accounts for the period ending 30th June 2009. LPG: Spot conditions since the beginning of the semester confirm the challenging outlook for 2009; no substantial improvement is expected until the end of the year. However, EXMAR’s VLGC and MGC fleets are covered for 55% and 90%, respectively, which reduces the exposure on the spot market. The performance of the second semester should be in line with the first six months.
The delivered Pressurized fleet is covered for approx. 60% for the balance of the year.
LNG: The entire LNG fleet will be in continuous employment during the second semester (or, in the case of the EXCEL, covered by the minimum revenue undertaking from a third-party), with the exception of the EXCELSIOR that will go in planned dry-dock during three weeks after her regas season at Bahia Blanca in Argentina.
Two more LNGRV’s, namely the EXQUISITE and Hull 2271 tbn EXPEDIENT will have joined the fleet by the end of the year. Financing of EXMAR’s share in these two vessels is still underway.
OFFSHORE: Although positively influenced by the contribution of the NUNCE, earnings are expected to be affected by the absence of revenues for the OPTI-EXTM and the KISSAMA (during its refurbishment process).
Source: Exmar
Hellas: Ship owners retain first place in ship acquisitions with $2.35 billion invested in 2009
Saturday, 29 August 2009
Despite the still challenging financing environment, Hellenic ship owners have managed to stay on top of the global list in terms of the investments undertaken so far this year in the second hand ship market. With vessel values way below the peak levels reached about a year ago, ship owners from the leading maritime nation have invested $2.35 billion from the beginning of the year until the end of August. According to figures compiled by Allied Shipbroking this translates to 118 vessels added to Hellenic-owned fleets, with the vast majority of them being dry bulk carriers and tankers.
During the same period of last year, there had been 164 ships reportedly acquired, with their value reaching the impressive amount of $7.4 billion. Of course, at the time few could have predicted the market’s collapse which followed just a few weeks later, from the end of September onwards until the end of 2008. Today, many ship owners are wishing they had kept their cash in their pockets, since it’s exactly these investments, made at the market’s peak, which are hurting today’s profitability and are increasing costs.
During the whole of 2008, Hellenic ship owners poured a total of $8 billion in the second hand market, acquiring a total of 197 ships, even though during the fourth quarter of the year, investments were scarce, as a result of the financial and shipping crisis. An evidence of the plunge of investments is a comparison with 2007, a year of records. Two years ago, investments had reached a more than impressive $17 billion, which amounted at 445 second hand vessels.
Breaking down this year’s purchases, one notices that most owners turned once again towards bulkers, opting for a total of 88 ships for a total price of $1.76 billion, versus 96 ships costing $4.52 during the same period of 2008. This comparison proves the radical decrease of ship values, which prompted ship owners to invest again, also because they could bring the average acquisition value of their fleets down, which in turn can yield better profits, with the freight market recovering until the end of June, before going down again in August.
Owners from Hellas also acquired 22 tankers for $535 million (against 58 tankers of $2.52 billion in the same period of 2008), while they also bought 8 containerships for just $52.2 million, compared to last year’s 10 containerships, costing $326.5 million.
CKYH to streamline Asia - North Europe/Med services
Seoul: CKYH Alliance (Coscon, “K” Line, Yang Ming, and Hanjin Shipping) announces it is to 'rationalise' its Asia - North Europe/Mediterranean services effective October 2009, reducing capacity by about 20%. In this way, "the partner carriers will be able to avoid overlapping of similar service loops and reduce duplicate calling ports, thereby improving efficiency of their service," the alliance said in a statement.
Details of the new service structure are as follows:
1. NE1 (North Europe 1)
Port rotation: Ningbo - Shanghai - Hong Kong - Nansha - Rotterdam - Hamburg - Felixstowe - Antwerp - Singapore - Ningbo. Vessels deployed: 8,500TEU X 8 (Coscon, Hanjin)
2. NE2 (North Europe 2)
Port rotation: Xiamen - Kaohsiung - Yantian - Singapore - Rotterdam - Felixstowe - Hamburg - Antwerp - Jeddah - Hong Kong - Yantian - Xiamen. Vessels deployed: 7,700TEU/8,000TEU X 8 ("K" Line, Yang Ming)
3. NE3 (North Europe 3)
Port Rotation: Xingang - Dalian - Qingdao - Ningbo - Yantian - Singapore - Port Said - Rotterdam - Hamburg - Felixstowe - Singapore - Xingang. Vessels deployed: 8,000TEU X 6, 7,700TEU X 3 (Coscon, "K" Line, Yang Ming, Hanjin)
4. NE4 (North Europe 4)
Port Rotation: Kwangyang - Pusan - Ningbo - Shanghai - Singapore - Hamburg - Rotterdam - Le Havre - Port Said - Singapore - Hong Kong - Kwangyang. Vessels deployed: 8,000TEU X 3, 7,700TEU X 5 ("K" Line, Yang Ming, Hanjin)
5. MD1 (Mediterranean 1)
Port Rotation: Pusan - Shanghai - Ningbo - Yantian - Hong Kong - Singapore - Port Said - Ashdod - Malta - Naples - Genoa - Livorno - Fos - Port Said - Singapore - Pusan. Vessels deployed: 5,000TEU X 8 (Coscon, "K" Line, Yang Ming, Hanjin)
6. MD2 (Mediterranean 2)
Port Rotation: Shanghai - Ningbo - Xiamen - Kaohsiung - Shekou - Singapore - Port Said - Piraeus - Genoa - La Spezia - Barcelona - Valencia - Singapore - Shanghai. Vessels deployed: 6,000TEU X 8 (Coscon, "K" Line, Yang Ming, Hanjin). [22/08/09]
Buenos Aires strike hurting NYK and other Asian carriers
Buenos Aires: NYK Line’s Asia to East Coast of South America (ECSA) service is being diverted from Buenos Aires to Montevideo due to a stevedores strike in Argentina’s main container port.
The dispute clocked up a tenth day of strike action today as two rival dockers’ unions battle it out over crane drivers’ responsibilities. They are also seeking better pay and conditions but in the meantime carriers - including NYK Line, Hyundai, K Line and PIL - are having to leave behind export cargo and are diverting Argentine imports to the port of Montevideo, across the River Plate, in Uruguay.
It is understood around 30 vessel calls have been affected so far and around 4,000 extra export containers are piling up in the Buenos Aires Puerto Nuevo port area.
Workers at Puerto Nuevo - which includes the Hutchsion-operated BACTSA facility, DP World-operated TRP and also Terminal Four, run by APM Terminals - downed tools and stopped work, or began working to rule, initially over a dispute between the stevedores SUPA union and the Guinchelos union, that represents crane drivers.
And, according to a senior manager at Multimar, the shipping agency that is wholly owned by NYK Lines, the dispute - which started in the TRP terminal but then spread to Bactsa and T4 - has brought Puerto Nuevo to its knees.
“It has been going on for over a week now and we have cancelled two of our weekly calls and just unloaded the containers in Montevideo,” the Multimar manager told Seatrade Asia Online. “I think many other carriers are doing the same.”
NYK Line is in a joint ECSA to Asia service with Hyundai, K Line and PIL.
Argentine carrier Maruba - which also calls at TRP - and Maersk Line, which uses T4, have also been badly affected but German carrier Hamburg Sud has not been affected at all as its ships call at the Exolgan terminal which is 20 km away on the outskirts of BA and does not have the same unions operating there.
The Multimar manager added that the Argentine Labour Ministry seems about to make a ruling that crane drivers must belong to the Guinchelos union, and that should help bring the dispute to a close. [28/08/09]
Friday, August 28, 2009
CANSI says 6m dwt of ship orders cancelled
Beijing: The China Association of the National Shipbuilding Industry (CANSI) has announced that contracts for 172 newbuildings totaling 5,952,000 dwt during a 10-month period from October 2008 to July 2007 had been canceled in China. The finding was revealed in the State of Economic Operations by the Shipbuilding Industry for January-July 2009, a CANSI report released earlier this month. CANSI stated, however, the number of cancellations is based on an approximate estimate, which led Japan’s Kaiji Press to speculate that “the number is actually higher”. During July, deals for six newbuildings amounting to 342,000 dwt were annulled, according to CANSI. On that score, an association official commented, "The temp of cancellations is slowing". [28/08/09]
PSA and Hanjin win operating concession at Busan New Port
Busan: The Busan Port Authority reports it has awarded a consortium comprising PSA and Hanjin Transportation the operating concession for three berths (Phase 1-1) at New Port, which were bought earlier from Pusan Newport Co.
The Authority had launched three tenders inviting interested operators to make a bid for the berths. Two final tender offers were received before the August 24th deadline from Korea Express and the PSA/Hanjin consortium.
The BPA says its choice of winning bid took into account several factors including proposed leasing fees, ability to attract cargo, company track record and stability, and plans to contribute to the future development of Busan Port. [28/08/09]
Oil's Long-Term Premium to Fade as Supplies Fall, Merrill Says
Friday, 28 August 2009
The price difference between short and long-term oil futures, which drove investment banks and oil companies to hoard crude on board tankers, will narrow further as inventories in developed economies shrink, Bank of America’s Merrill Lynch unit said. In January the amount of oil stored at sea climbed to the most in at least two decades as traders profited from a so- called contango structure where future prices are higher than those for contracts closer to delivery. The spread between front-month futures and those for delivery in a year has since declined 73 percent.
“We expect a modest seasonal draw in total crude oil and petroleum inventories” in developed nations during the fourth quarter, Francisco Blanch, Merrill’s head of commodities research, said in a report dated Aug. 26. “The term structure of crude oil prices should flatten further over the next few months.”
Crude futures in New York for settlement in October this year are $6.75 a barrel cheaper than those for settlement in October 2010. On Jan. 15 they were $24.45 a barrel cheaper.
The volatility in crude prices declined to about the same level as before the bankruptcy of Lehman Brothers Holdings Inc. last September, Merrill’s Blanch added. Implied volatility, a gauge for predicting future swings in price, is also likely to abate, he said. West Texas Intermediate, or WTI, has traded around $70 a barrel over the past month on the New York Mercantile Exchange.
“In commodity markets, price volatility is mainly a function of stock levels,” Blanch said in the report. “With a more balanced outlook for oil fundamentals and with other asset classes starting to price in an economic recovery, implied volatility in WTI crude could soon drop.”
Source: Bloomberg
Is the freight market recovering?
Friday, 28 August 2009
Positive economic indicators coming out of Europe, Asia and the US over the last ten days give reason to forecast a recovery in the global logistics and express industry. However, for global freight and parcel volumes and revenues to rebound significantly there will need to be major improvements in consumer confidence, industrial output and subsequent international trade volumes, according to new research by independent market analyst Datamonitor.
Major economies rebounding
German exports, which have traditionally driven the country's economic growth, surged by seven percent in June compared to the previous month, representing the fastest such growth in almost three years. Imports were also up by seven percent month on month. As a result, the German economy has now exited the recession, recording 0.3% overall growth between April and June. With France matching this performance, Europe's two largest economies have rebounded from a 12-month period of recession.
Such positive signs have not been exclusive to Europe. After four quarters of negative growth, Japan exited recession in Q2 after its economy grew 0.9%. Hong Kong also recorded growth, of 3.3%, in the same period. In the US, the IMS manufacturing survey rose in May and specifically the new orders index rose above the threshold for growth for the first time since December 2007. This indicates a swing in industrial production levels from steep contraction to flat or even modest expansion.
Both Japan and China have been boosted by rising domestic consumption and government stimulus plans. In China, the government's stimulus plan helped spur growth in Q2 of 7.9% (an increase of 1.8% from the first quarter) and a rise in retail sales in June of 15%. Japan suffered with particularly negative results in Q1 when exports were badly impacted by the economic downturn. Government stimulus measures totalling $260billion, including cash handouts to stimulate spending, are thought to have kick-started the economy. Japanese manufacturers also benefited from recovering demand in China and other markets, with overall exports up 6.3% during the quarter.
However, such stimulus spending-driven growth cannot last forever and it is difficult to find evidence of any impact on the logistics and express industries, as Asia's export-dependent markets are still suffering from the slump in spending in Europe and North America. Once the stimulus budgets are spent, new sources of growth will be needed and as logistics and express companies’ volumes are coming from such low levels, a real recovery still seems a long way away, says Datamonitor logistics & express senior analyst Erik Van Baaren. “We have seen the year-on-year decline in air freight volumes at Hong Kong International Airport, the world's busiest air cargo hub, ease in July with volumes down just 8.4%, representing the smallest monthly decline since September last year.
“Year-to-date volumes are still down 19.6%, however, signalling that there is a long road to recovery still,” he says.
Not all news is good
In the meantime, Orient Overseas Container Line announced a 17.2% drop in container liftings in the first half of 2009 compared to the same period in 2008, and Japan Airlines reported a 56% decline in cargo revenue in its first quarter. Away from Asia, the latest figures from the European Liner Affairs Association indicate ongoing decline in transatlantic container volumes and revenues. “Ultimately, it seems small glimmers of hope in economic performance are making little impact on the volumes and revenues of the logistics and express industry so far,” Mr. Van Baaren says.
There are also some very negative reports to dampen any optimism creeping into the minds of the industry executives. The so-called barometer of world trade, the Baltic Dry Index recently plunged 17.2%, representing the worst week for the index since the deep crash of October 2008, as Chinese demand for steel and coal slowed and stalled price negotiations took effect. In addition, the International Energy Agency issued warnings that oil prices above the current levels of $70 per barrel could dampen nascent economic recovery.
There are also signs that some economies are 'arriving late' to this recession. Russia's economy, for example, shrank by a sharper than expected 10.9% in the second quarter of this year, having been hit by a slump in world demand and weaker prices for its oil and commodity exports.
While economic growth is a key indicator of growth in logistics and express markets, the steep decline in volumes over the past twelve months means that the industry is coming from a very low base and so will need significant and sustained periods of improving macroeconomic factors to have a noticeable impact on logistics and express volumes, Mr. Van Baaren says. “A significant upturn in parcel and freight volumes, combined with the improved performance of logistics and express companies will therefore not be realised until late this year, or even early 2010.”
On a global level, volumes in the courier, express and parcels industry diminished considerably in the second half of 2008 and the first half of 2009 due to the impact of the global economic recession, as it led to a decrease in global trade and lower consumer demand. This changed organisations’ supply chain design and selection of express services in order to minimise their distribution costs, leading to a shift from air to road as customers switched from premium to more economy-type products. This shift severely impacted the value of almost all countries’ express markets, especially in the Air Premium (express) segment, which was further impacted by lower fuel surcharges decreasing yields in air express services.
By the end of 2008 the downturn had gradually affected the wider express market, reaching its lowest point in the first part of 2009. The integrators (DHL, TNT, UPS and FedEx) all reported substantial declines in their volumes and revenues at the end of the second quarter, although the decline was bottoming out. However, as outlined in Datamonitor’s recently published report ‘Global Express through the Economic Downturn’, Mr. Van Baaren says: “given what happened to volumes at the end of 2008, seemingly positive results at the end of this year should not be misinterpreted as signs of recovery too early, as it will take the global express industry at least until the end of 2010 to return to its former levels from before the onset of the economic downturn.”
China's two box majors report large losses
Hong Kong: China COSCO Holdings, the country's largest shipping group, swung to a slightly smaller-than-expected net loss in the first half, and warned of a still tough second-half amid continuous decline of economy and trade.
"In the face of the significant over-supply and re-surging oil prices, it is expected that the operational conditions for the second half of the year will remain difficult," the company said on Thursday.
Analysts have said the freight market has begun to recover but the pace of a shipping industry upturn is likely to be slower than recovery of the world economy considering the long order books for new ships.
Drewry Shipping Consultants estimated global container volume to fall by 10.3 per cent in 2009 and global container fleet capacity is expected to grow by more than 10 per cent this year, China COSCO said.
China COSCO, which warned of a first-half net loss in July, reported a net loss of 4.59 billion yuan in Jan-June as the global recession took a toll on international trade, which badly hit sea transport volumes and rates.
The result was slightly better than a consensus forecast of 4.84 billion yuan loss from four analysts polled by Reuters and compared to a profit of 15.12 billion yuan a year ago.
Total revenue plunged nearly 60 per cent to 28.9 billion yuan from 70.57 billion yuan a year ago.
China Shipping Container Lines (CSCL), which vies with China COSCO as the world's sixth-largest operator of a container fleet, also posted a steep first-half loss on Thursday of 3.4bn RMB.
"There have been some improvements seen in the freight rates and China COSCO is expected to see a smaller loss in the second half than the first six months," Daiwa Securities analyst Geoffrey Cheng said.
But the Baltic Exchange's dry sea freight index (BDI) peaked for the year in June and a continual downtrend could require the company to make further provisions ahead, he added.
The BDI, which tracks prices to ship commodities such as iron ore and grains, jumped more than six fold to a high of 4,291 in June from a low of 663 points last December.
The index stood at 2,425 points on Thursday or just about one-fifth of its peak of 11,793 in May 2008.
China COSCO, which operates the world largest dry bulk fleet, shipped 4.8 per cent less dry bulk cargoes, or 129.3 million tonnes, in the first six months, it said.
Chinese shipping firms have also been badly hit due to wilting demand for made-in-China goods from European and U.S. consumers.
China COSCO's container volume dropped 22 per cent to 2.35 million twenty-foot-equivalent units (TEU) in the first half.
Shares of China COSCO ended down three per cent in Hong Kong on Thursday, but have risen 88 per cent so far this year, beating a 41 per cent gain in the benchmark Hang Seng Index.
China COSCO's Shanghai shares have also increased 91 per cent year to date. [28/08/09]
Shenzhen port unveils $45m of incentives
Shenzhen: Undergoing its hardest year of business for a generation Shenzhen port in the south of China will today unveil a series of incentives to coerce shipping lines to call more often at the port’s four box terminals. The total package the authority is making available is 300m RMB, one of the largest incentives packages offered by any port this year, underscoring the gravity of the shortfall in boxes in south China. Shenzhen, at the heart of the manufacturing centre that is the Pearl river delta, has suffered from a severe drop in demand from Europe and the US for Chinese products. The port is likely to post a full year double-digit percentage decline, becoming the worst performer of the major boxports in China. Its performance will see Hong Kong remain ahead of it in third place in the global boxport rankings for another year. [28/08/09]
Big three Korean yards vie for Gorgon gas deals
Seoul: Hyundai Heavy Industries Co., the world’s biggest shipyard, and its rivals may end an eight-month dry spell with a slew of new orders after Australia approved the $42 billion Gorgon liquefied natural gas project, Bloomberg reports.
Hyundai Heavy, Daewoo Shipbuilding & Marine Engineering Co. and Samsung Heavy Industries Co., the world’s three largest yards, have bid for Gorgon contracts that may be worth as much as $6 billion, said Lee Sang Hwa, an analyst at Hyundai Securities Co., which isn’t affiliated with Hyundai Heavy. Gorgon partners Chevron Corp., Royal Dutch Shell Plc and Exxon Mobil Corp. may award orders as early as next month for the project off the Western Australian coast, Lee said. [27/08/09]
Sungdong scores big Vale order
Seoul: Sungdong Shipbuilding & Marine Engineering, located at the base of the Korean peninsula, has grabbed an order for four 180,000 dwt capesizes from Brazilian mining giant Vale.
The deal is worth $250m and represents Sungdong’s first bulker orders of the year.All the ships will be delivered by 2011. This latest order follows on from a spate of Greek VLCC orders and brings the yard’s backlog to 93 ships. [27/08/09]
ABB launches new turbocharger manufacturing base in Chongqing
Chongqing: ABB, the leading power and automation technology group inaugurated a brand new turbocharger manufacturing base in Degan Industrial Park, Chongqing this week, localizing and producing latest turbocharging products which can improve diesel engine output by 300% and increase fuel efficiency by 10%.
This new facility of ABB Jiangjin Turbo System Co. Ltd., occupying a total land area of 73,000 m2 and a building space of 21,000 m2, is three times bigger than its old site. It is one of the three global turbocharging manufacturing bases of ABB, who is the No. one supplier with over 30% market share of turbochargers of 500 kW and above, focusing to support customers in marine, railway and power plant areas.
Ulrich Birch, head of ABB Turbocharging in China said, “the new facility, allowing us to localize the very latest turbocharger technology which already fulfills future emission and efficiency standards, will enable ABB Jiangjin Turbo Systems to further spread its wings.”
The new manufacturing base houses advanced facilities, including fully air-conditioned workshops, advanced manufacturing machinery, energy saving and rainwater collection facilities, will not only improve product quality and working efficiency, but will also cut more than 35% energy consumption and 10,000 tons of water consumption each year, compared with conventional buildings.
The new site will allow ABB to initiate local production of many of its product series, including the TPS, TPL and TPR which are three mainstream product series and enjoy great popularity around the world. ABB’s latest A100 series is expected to be brought into local production in the new site, which will be a significant step in the development of single-stage, high-efficiency, high-pressure turbocharging systems and will set a new industry standard with highest compression ratios for modern diesel and gas engines.
ABB has built a strong presence in Chongqing, with 1600 employees, two joint venture companies including ABB Jiangjin Turbo System and ABB Chongqing Transformers, one branch office and one process automation service centre. [27/08/09]
Sinochem books four ships in Korea
Seoul: Sinochem Group has signed a shipbuilding letter of intent with Korean 21st Century shipyard for four stainless steel 20,000dwt chemical tankers. The two sides are negotiating for lower price as the recent quote is $40m per ship.
The shipyard said they will sign the formal contract in October and the first ship will be delivered in the first half of 2011. [27/08/09]
Thursday, August 27, 2009
Asian Stocks Advance on China Earnings, U.S. Consumer Report
Wednesday, 26 August 2009
Asian stocks advanced, lifting the MSCI Asia Pacific Index to a two-week high, as Chinese companies increased earnings and a U.S. consumer confidence report beat economist estimates. Air China Ltd., the country’s biggest international carrier, surged 10 percent in Shanghai after first-half net income doubled. China Life Insurance Co., the nation’s biggest insurer, gained 3.2 percent as profit in the period climbed 15 percent. Westfield Group, which operates 55 U.S. shopping malls, rose 4.7 percent in Sydney as a gauge of American home prices advanced.
“People are generally happy that things are improving,” said Tim Schroeders, who helps manage about $1 billion at Pengana Capital Ltd. in Melbourne. “It’s now a question of how strong that is going to be. We’re probably still going to get the occasional rogue figure from time to time.”
The MSCI Asia Pacific Index rose 0.6 percent to 113.73 as of 7:22 p.m. in Tokyo, the highest level since Aug. 14. The gauge has climbed 61 percent from a more than five-year low on March 9 on speculation government stimulus packages and lower borrowing costs will revive the global economy.
Japan’s Nikkei 225 Stock Average gained 1.4 percent as a government report showed the country’s exports fell 36.5 percent in July from a year earlier, less than some economists predicted. China’s Shanghai Composite Index rose 1.8 percent. Taiwan’s Taiex Index sank 1.3 percent, the region’s biggest drop.
Beating Estimates
A third of the 548 companies in the MSCI Asia Pacific Index that have reported net income since early July have exceeded analyst estimates, while 19 percent have missed, according to data compiled by Bloomberg.
Yinchuan Xinhua Department Store Co. rose 9.1 percent in Shanghai after first-half profit climbed. Noritz Corp., which makes water heaters, soared 10 percent after Credit Suisse Group AG said the party favored to win Japanese elections on Aug. 30 will push a policy requiring people to replace old boilers. Consolidated Media Holdings Ltd. surged 12 percent in Sydney after agreeing to sell a stake in an employment Web site.
Futures on the Standard & Poor’s 500 Index were little changed. The gauge advanced 0.2 percent yesterday as the Conference Board’s consumer-confidence index climbed in August for the first time in three months. The S&P/Case-Shiller home- price index declined 15.4 percent in June from a year earlier, less than estimated by economists.
“The housing and confidence reports cemented evidence that the U.S. economy is recovering,” said Hiroichi Nishi, an equities manager at Tokyo-based Nikko Cordial Securities Inc.
China Earnings
Air China climbed 10 percent to 7.92 yuan. Net income surged to 2.88 billion yuan ($422 million) from 1.23 billion yuan a year earlier, the carrier said in a Hong Kong stock exchange statement late yesterday. Cathay Pacific Airways Ltd., Hong Kong’s biggest carrier, added 2 percent to HK$11.42.
China Life gained 3.2 percent to HK$34.30 in Hong Kong. Net income increased to 18.2 billion yuan from 15.8 billion yuan a year earlier on investment returns, the company said late yesterday.
Yinchuan Xinhua Department Store rose 9.1 percent to 21.22 yuan in Shanghai after first-half profit climbed 49 percent from a year earlier to 93.9 million yuan.
Asian stocks have rallied this week after the National Association of Realtors said existing home purchases in the U.S. jumped in July by the most since the tallies began in 1999. U.S. Federal Reserve Chairman Ben S. Bernanke said Aug. 21 that the global economy was “beginning to emerge” from recession after “aggressive” action from central banks and governments.
Westfield Group rose 4.7 percent to A$13.03. The world’s largest owner of shopping centers said it doesn’t need to sell shares to raise capital, as the company reported a first-half loss on property writedowns.
U.S. Sales
Toyota Motor Corp., which gets 31 percent of its sales in North America, climbed 1.5 percent to 4,110 yen in Tokyo. Honda Motor Co., which gets 45 percent of its revenue in North America, added 0.7 percent to 3,010 yen.
Companies on the Asian gauge are currently priced at an average 24 times estimated earnings, up from 13.7 times at the end of 2008, as improving economic data and better-than-expected corporate earnings globally point to a global economic recovery.
Water-heater maker Noritz climbed 10 percent to 1,299 yen. The Democratic Party of Japan, which opinion polls suggest will win Aug. 30 parliamentary elections by a landslide margin, has promised to require old water heaters to be replaced with high- efficiency models, a Credit Suisse report said.
Stake Sale
Consolidated Media surged 12 percent to A$3.28. The company said it expects A$440.6 million ($368 million) from the sale of a stake in Seek Ltd., which dropped 3.2 percent to A$5.18.
Transfield Services Ltd. surged 9.2 percent to A$3.80, as the provider of network-maintenance services to miners and utilities said it won a C$150 million ($138 million), 12-year contract with the Ontario Ministry of Transportation.
Aozora Bank Ltd. gained 3 percent to 139 yen. The lender will form a business alliance with Hokuhoku Financial Group Inc.’s Hokkaido Bank to provide agricultural sector finance, Aozora said in a release. Hokuhoku lost 0.9 percent to 231 yen.
Central Glass Co. surged 13 percent to 485 yen, after Hiroshi Matsuda, an analyst at Mizuho Securities Co. boosted the glassmaker’s stock rating by two notches to “strong buy” from “hold.”
Source: Bloomberg
Venezuela says oil stocks high, sees no OPEC rise
Wednesday, 26 August 2009
World oil inventories are too high, Venezuela's Oil Minister Rafael Ramirez said on Tuesday, adding that he did not expect OPEC to raise output at its meeting next month. Ramirez told Reuters that oil could reach an average of $70 per barrel by year-end if "current conditions hold," and could go as high as an average $75 per barrel in the last three months of the year.
"Inventories have declined but they remain above average. We need for them to come down to the average levels," Ramirez said.
Members of the Organization of Petroleum Exporting Countries meet in Vienna on Oct. 9 to discuss output policy. Other members have indicated a reluctance to increase production due to high inventories despite a sharp increase in prices in recent months.
"We've said that the price of a barrel will end the year at $70 and I think if current conditions continue we will achieve that," Ramirez said.
Analysts surveyed by Reuters on Tuesday said they expected U.S. oil inventory data to show a decline in crude oil stocks this week as importers shun purchases with tanks brimming.
Source: Reuters
Oil falls below $72 a barrel in Asian trade
Wednesday, 26 August 2009
Global oil prices eased further in Asian trade Wednesday after sliding more than three percent overnight. Light sweet crude for October delivery was seen trading at $71.86 a barrel at 10.30 a.m Singapore time while Brent crude was at $71.69 a barrel at the same time. On Tuesday, October delivery dropped $2.33, or 3.1 per cent, to settle at $72.04 a barrel at the close of floor trading on the New York Mercantile Exchange. The contract touched $US71.11, the lowest level since August 19. Oil has risen 62 per cent this year
Brent North Sea crude for October delivery shed 41 cents to close at $71.41 a barrel.
Oil extended losses from its highest since last October a day ago as US industry figures showing a hefty rise in country’s crude stocks and overshadowing upbeat economic data.
American Petroleum Institute (API) data showed an unexpected 4.3 million-barrel build in US crude stocks last week, confounding analysts' expectations for a 1.1-million-barrel fall, and coming after the 8.4-million-barrel drop the week before.
Gasoline stocks fell 1.8 million barrels, the API said, more than the 1-million-barrel drop predicted in the Reuters poll, while distillates declined 146,000 barrels, versus forecasts for a 300,000-barrel rise.
Investors also viewed prices touching 10-month highs near $75 Tuesday, capping oil's jump of 65 % this year, as a good reason to take profits.
Source: Commodity Online
Transneft sees Russia 09 oil output no less than 08
Wednesday, 26 August 2009
Russian oil output this year will not be less than that of 2008, the head of the country's pipeline monopoly Transneft said on Tuesday, adding that the BTS-2 pipeline project could be finished early. "It is quite absolutely clear that the volume of oil output will remain no lower than last year's levels," Transneft President Nikolai Tokarev said. "There is every reason to say this, people in the oil sector will confirm it."
Russian oil output fell by about one percent in 2008 to 488 million tonnes, the first decline in a decade.
Tokarev told reporters that that the BTS-2 pipeline could be completed six months ahead of schedule, in the first quarter of 2012 rather than the third quarter.
Construction of the pipeline, which would bring oil to ports on the Baltic Sea, began in June of this year. It is intended to ease Russia's dependence on transporting oil through pipelines running across Belarus, Ukraine and Poland.
But analysts have warned that the new route may force Russia to divert oil from other outlets, which are also vital for Russia to fill. For an analysis on BTS-2 see.
Source: Reuters
China favors both Australia and Russia coking coal
Wednesday, 26 August 2009
It is reported that this week the international thermal coal market has edged up slightly. Statistics from GlobalCoal indicated on August 21st the price index of thermal coal price at Australia's Newcastle port continued to dip USD 2.25 per tonne to USD 72 per tonne by over 3%. This had been the fourth consecutive downward week.
The price index of thermal coal at Richard port in South Africa edged down by USD 0.35 per tonne to USD 63.45 per tonne by 0.4%. That in ARA market in Europe dropped by USD 0.94 per tonne to USD 70.72 per tonne by over 1.3%.
After climbing up to USD 78 per tonne the price index of thermal coal has finally dropped in Asia's thermal coal market. However, as price drops would lead to increases in China's imports, it's not expected to drop below USD 70 per tonne.
Mr Murray Houston CEO from Xstrata predicts China coal imports would surge by 80% and exports down by 30% this year making China a net importer of coal with 30 million tonnes to 35 million tonnes of net import volume. This is partially due to the fact that devalued international coal is more advantageous for China than self produced coal. China' coal imports in Jul remained at 13.89 million tonnes down by 2.18 million tonnes or 13.6%YoY. In August it's still expected to be in the downward path.
This week China, while still possessing much enthusiasm for imports, has witnessed Australia coking coal running tight to import, for more coal has flowed to Japan and Korea than before. The other reasons are, Australia coal is passed over traders and to large scale steel mills directly and that transporting capacities at ports are curbed and export quotas are implemented on Australia's coal imports. This week Australia primary coking coal remains at USD 165 per tonne at each port in China and the transaction price stays at CNY 1,240 per tonne at Jingtang port in China.
While Russia coal is quite hot, and is relatively flexible in delivery. As it's cheaper than domestic coal, trade is quite active, and the spot price has risen by CNY 60 per tonne to CNY 1,160 per tonne this week. Other varieties of coal also experienced CNY 20 per tonne to CNY 30 per tonne rise in price.
Coal stock volume in power plants dropped 0.6% in the US this week. However, current stock level is still 27.7% higher than the same period of last year. Statistics from the power sector show there is now 176 million tonnes of coal stock in America power plants, compared with 177 million tonnes last week and 138 million tonne at the same period of last year. This amount of coal, in the light of normal operation, can sustain 66 days' working, compared with only 14 days YoY.
Source: Steelguru
Pipavav Shipyard IPO likely in September
Mumbai: The initial public offering of India's Pipavav Shipyard (artists's impression pictured) is likely to open for subscription either Sept. 16 or Sept. 17, writes the Wall Street Journal quoting a banker directly involved in the issue.
The company wants to launch the IPO before regulatory approval, received in September last year, expires on Sept. 17, the investment banker told Dow Jones Newswires.
"The founders have decided to go ahead with the issue now. We're just waiting for the final nod from the Securities and Exchange Board of India," the banker added.
He said that as some time has passed since the initial approval, the company is updating data in the initial prospectus such as financials, legal and other information, which SEBI will need to approve.
According to the preliminary prospectus filed with SEBI, Pipavav Shipyard was to offer 86.9 million shares via the sale.
The banker said the company is planning to raise 4 billion rupees to 5 billion rupees via the issue by diluting about 13% of the post-issue equity.
He added that the company would begin pre-marketing the maiden share sale in Hong Kong and Singapore towards the end of this week.
Pipavav, a shipbuilding and repair facility, is co-owned by SKIL Infrastructure Ltd. and Punj Lloyd Ltd. and also counts Singapore's Sembcorp Marine Ltd. among its stakeholders.
Other stakeholders include Infrastructure Leasing and Financial Services Ltd. and the Indian government-controlled Exim Bank, Industrial Development Bank of India and UTI Mutual Fund. Merrill Lynch International and Deutsche Bank AG also hold stakes.
Citigroup Global Markets India Pvt. Ltd., Enam Financial Consultants Pvt. Ltd. and JM Financial Consultants Pvt. Ltd. are the joint global coordinators and book runners for the issue.
CMA CGM, Maersk and Hyundai suspend an Asia/US East Coast loop
Shanghai: CMA CGM, Maersk and Hyundai have revealed that they are to suspend their China, Korea, US East Coast service via Panama after the departure on September 27th, 2009 of the last eastbound vessel from Ningbo. The lines claims that this joint decision allows them to rationalize existing services and capacity to meet market needs.
‘This rationalisation of port coverage and slot supply corresponds to the actual trend demand observed on the Asia / US market since beginning 2009,’ said Jean-Philippe Thénoz, CMA CGM vp North America Lines. ‘Suspension of services is in our mind a temporary move. We are fairly confident that the North America trade will rebound in the near future.’
The loop operated by eight 5100 TEU vessels, named HUDSON Service by CMA CGM, was calling ports such as Ningbo, Shanghai, Qingdao, Pusan, Balboa, Savannah, New York and Miami.
The future coverage of these ports will be done through existing services already operated either independently by CMA CGM or in a venture with partner such as COLUMBUS Service. [26/08/09]