Thursday, April 30, 2009
Janet Porter - Wednesday 29 April 2009
Maersk will not allow armed guards on board its vessels.
DANISH shipping giant AP Moller-Maersk is opposed to weapons on board its ships that could be used to fend off piracy attacks.
Days after the crew of a Mediterranean Shipping Co cruiseship used firearms to successfully repel pirates, AP Moller-Maersk said it was maintaining its policy of not arming crews or allowing armed guards on board its vessels.
“Weapons onboard could lead to a dangerous escalation and raise a number of multi-jurisdictional legal issues,” the company said in a statement as it continued with its inquiry into the Maersk Alabama hijack, when US Navy personnel shot and killed three of the pirates who were holding the ship’s captain hostage.
The chief steward is now suing Maersk Line Ltd. and seeking at least $75,000 as compensation.
Company procedures have been changed as a result of that attack earlier this month, with only ships of a certain size allowed to enter the area in which pirates are known to be active.
The 1,092 teu Maersk Alabama is small for a containership, with a service speed of 18 knots, whereas bigger, modern vessels would be able to go at 24 knots or more, and with higher freeboard, be more difficult for pirates to clamber aboard.
In a statement today, AP Moller–Maersk said it remained “vigilant and constantly monitors the situation in the Gulf of Aden and the area off the Somali coast” and regularly updated its policy and procedures for operating in the Gulf of Aden and off the coast of Somalia.
While proceeding with its investigation of the Maersk Alabama attack, it has taken action to further boost the safety and security of crews and vessels against piracy.
“We have expanded the area off the coast of Somalia where only vessels with a certain freeboard or capable of sailing certain speeds are allowed to enter,” said group partner and Maersk Tankers chief executive Søren Skou.
“Vessels should spend as little time in the area as possible, and while in the area sail at maximum speed,” he added.
The group is also examining defensive measures to further boost security onboard its vessels such as making access to the vessel more difficult, but for security reasons have not released specific details.
The group said it gives detailed instructions and procedures to its crews prior to sailing in the area, which includes reviewing safety plans onboard before entering into the area.
AP Moller-Maersk has also reiterated its call on the international community to find a solution to the problem of piracy.
While the naval presence in the Gulf of Aden has achieved some success in deterring attacks there, the pirates still remain a threat to crews and vessels in the area and elsewhere, the company said.
“We back proposals such as establishing a regional maritime sea patrol to protect vessels in the area from piracy attacks. The nations in the region with the support of the international community must address this problem,” Mr Skou said.
“We also call on the international community to establish a transit corridor, so vessels can safely call ports in Kenya and Tanzania.”
The group also said it insists that it is possible for seafarers to do their jobs in a safe and peaceful environment; ensuring the transportation of traded goods around the world.
“This is why the group maintains its policy of not arming crews or allowing armed guards onboard its vessels. Weapons onboard could lead to a dangerous escalation and raise a number of multi-jurisdictional legal issues,” the statement said.
“However, in certain instances when force protection is government mandated, the group will work with and comply with government instructions.”
By Marcus HDanaos delays delivery of 15 boxship newbuilds and in Singapore - Wednesday 29 April 2009
GREEK containership owning company Danaos has delayed the delivery of 15 newbuildings from Chinese and Korean shipbuilders.
In its quarterly results announcement, Danaos said that it had agreed with China Shipbuilding and Trading to delay the delivery of a quintet of 8,350 teu vessels by 200 days each on average.
The company has also agreed with Hanjin Heavy Industries & Construction to delay the delivery of 10 containerships by about three months each, comprising five 6,500 teu vessels and five 3,400 teu vessels.
The shipowner is now expecting to take delivery of six vessels this year; 12 in 2010, although three due in December 2010 may be delivered the following year; and another 11 in 2011.
Should the three vessels due to be delivered in December 2010 be delivered in 2011, annual capital expenditure will be roughly $465m for the remainder of this year, $875m in 2010 and $785m in 2011.
Danaos has a total of 29 boxship newbuildings on order.
“We wish to reiterate that our vessels, both operating and those under construction, are under long time charters with some of the largest counterparties in the shipping industry. Although the current economic conditions are presenting everybody in our trade with new challenges, our chartering arrangements do not allow for unilateral modification of the prevailing terms,” said Danaos chief executive John Coustas.
Danaos reported a net profit of $20m for the first quarter of 2009, compared to $25.9m in the same period a year earlier.
Iron ore stockpiles at China’s discharge ports have risen by 10 Mt over the past two months to over 68 Mt at the end of last week - the first time since November 2008. However, this is still lower than the 4q08 peak of 74.4 Mt. Meanwhile, the spot fob price of iron ore from India is around $53/t compared with $73/t in mid-February.
Manila: The Philippines, the largest single provider of the world's seafarers, urged Pacific Rim transportation ministers Tuesday to aid its ships and sailors through pirate-infested Somali waters amid a slump in global trade.
Transportation Secretary Leandro Mendoza appealed to officials from the 21-member Asia Pacific Economic Cooperation addressing the menace of piracy to the world's merchant ships to provide armed escorts to Philippine ships, said Transportation Undersecretary Maria Elena Bautista.
The Philippines supplies about 30 percent of the world's 1.2 million merchant sailors, and the Foreign Affairs Department says 81 Filipino seafarers are among Somali pirates' prisoners.
A strengthened international naval force has been patrolling the Gulf of Aden since the beginning of 2009 following a surge in hijackings in the area last year.
The Philippines is in "Category E," which Bautista said is the lowest priority in receiving naval escorts near Somali waters.
"The appeal of Secretary Mendoza is for the Philippines to be given additional assistance because we have a lot of Filipinos serving in their vessels," she added.
She thanked China, Germany and the U.S. for aiding the Philippine tanker M/T Stolt Strength and its 23 Filipino crewmen after Somali pirates released them on April 21. A Chinese frigate escorting the tanker out of Somali waters deployed helicopters Monday to drive away pirates again lurking close to the ship as it sailed toward Oman's territorial waters, Bautista said. [29/04/09]
Shanghai: It’s not the owners’ fault, it’s the yards who are to blame for the likely prolonged downturn in shipping, said Arthur Bowring, md of the Hong Kong Shipowners Association. Speaking at the final session of TradeWinds’ Shipping China Energy conference, Bowring said: “The problem is not the excess shipbuilding orders. The problem is excess shipbuilding capacity.”
He reflected that the industry had seen the same situation in the 1980s where governments kept yards on life support to keep local communities employed.
Bowring estimated that shipbuilding capacity has trebled over the past five years. “We need to cut shipbuilding capacity,” he concluded. [29/04/09]
Shanghai: Chinese oil giant CNOOC recently signed an agreement with Wuchang Shipbuilding Industry Company for the construction of two anchor handing, tug and supply vessels.
Wuchang Shipbuilding Industry Company will build the two UT788 CD deepwater vessels with overall construction value of 1.4 billion yuan.
The vessels measure 93.4 meters in length, 22 meters in width and 6.5 meters of water line with 29,000 HP of total propeller power. [29/04/09]
London: The Baltic Dry Index (BDI), a measure of world trade that collapsed a record 92% last year, won’t rebound until 2011, Nomura Holdings Inc. said.
“We maintain our bearish view due to the large supply of new ships coupled with slow bulk demand,” Jim Wong, a Hong Kong-based transport and infrastructure analyst with Nomura, said in a report on Tuesday. “We forecast the BDI to decline 74% to 1,666 in 2009 and decrease further to 1,416 in 2010 before a rebound to 2,408 in 2011.” [29/04/09]
Shanghai: 55.65% of the 7.862m cgt terminations seen globally have happened in China thus far. The current global orderbook stands at just shy of 158m cgt.
These statistics were provided by Matthew Flynn (pictured), md of shipbuilding database Worldyards, while speaking at TradeWinds’ Shipping China Energy conference in Shanghai this morning.
21.32% of the 2010 China yards orderbook are being built at greenfield yards in CGT terms led by bulkers. 2010 marks the height of the global orderbook, Flynn noted.
“The majority of contracts are performing” in China, he maintained. Flynn said that the difference between Korea and China when it came to shipyard aid was that the former was reacting to the crisis, a form of rescue capitalism while China was continuing its long held tradition of state capitalism. [29/04/09]
BDI 1772 DOWN 18
BCI 2342 DOWN 22
BPI 1469 DOWN 28
BSI 1438 DOWN 9
BHSI 694 DOWN 3
'Unique Brilliance' 2001 176347 dwt dely Immingham 3/7 May trip via Narvik and Cape of Good Hope redel PMO $40000 daily - Kleimar 'Aquahope' 1997 167109 dwt dely ex dd Zhoushan 10 May trip via Brazil redel China $19520 daily - Cargill 'Stalo' Alfred C.Toepfer relet 2005 87036 dwt dely Rotterdam spot trip via Noaudhibou redel China abt 55-60 days $20000 daily - Cosco Europe 'Orange Trident' 2007 78932 dwt dely Niihama 5/10 May trip via EC Australia redel Sweden $7500 daily - Transbulk 'Good Hope Max' 2005 76739 dwt dely Piombino 29 Apr/5 May trip via Hampton Roads redel Piombino $11000 daily - Cargill 'Medi Taipei' 2003 76633 dwt dely retro sailing Taizhou 25 Apr trip via EC Australia redel China $10000 daily - Hongxiang Andrea D'Amato' 2008 76618 dwt dely CJK spot trip via Australia redel China $12000 daily - Noble 'Mulberry Wilton' 2004 76453 dwt dely Inchon 2/7 May trip via Australia redel China $10000 daily - Norden 'Loch Lomond' 2002 75854 dwt dely Stade 7/9 May 2 laden legs redel Skaw-Cape Passero $12500 daily - Practica 'Giovanna Iuliano' 1997 75265 dwt dely retro Bin Qasim 19 Apr trip via EC South America & Iran redel PMO $17500 daily - cnr 'Ecoan G.O.' 2008 75131 dwt dely Xinsha 5/10 May trip Indonesia redel S.Korea $13000 daily - Polaris 'Ever Shining' Cosbulk relet 1999 74396 dwt dely Cape Passero 8/10 May trip via Kamsar redel Skaw-Cape Passero $12000 daily - Cargill 'Nicos L' 2002 74000 dwt dely Singapore 1/3 May trip via EC South America redel Singapore-Japan rge $13600 daily - Bunge
'Ever Young' 1995 73081 dwt -
'General Guisan' 1999 73035 dwt dely Taiwan 5/10 May trip via Bunbury redel Bahrain int alumina $13000 daily - Klaveness 'Tiara Globe' 1998 72928 dwt dely Magdalla 10/20 May trip redel China $14000 daily - Uniwell 'Alpha Effort' Bunge relet 1999 72844 dwt dely CJK 28/30 Apr trip via EC Australia redel China $12500 daily - BHP Billiton - 'Theoforos I' 1987 67395 dwt dely Port Said 5/10 May trip via Black Sea & Egyptian Red Sea redel Port Said $14250 daily - grain house 'Sun Harvest' 1982 64714 dwt dely aps US Gulf 12/14 May trip redel Greece $7000 daily + $220000 bb - Bunge 'Ocean Prefect' 2003 53055 dwt dely Haldia 8/10 May trip redel China approx $11500 daily - Noble 'Moorgate' 1990 45875 dwt dely passing Durban spot trip via East Coast South America redel Malaysia $20750 daily - Dreyfus 'Sealady' 1995 42183 dwt dely Luanda spot trip via Orinoco redel East Med intention HBI 18000 daily - Duferco - of report 28/04> 'Jin Prince' 1986 37895 dwt dely Tuticorin 1/3 May trip via India redel China $8800 daily - Sundial 'Smaragda' 1984 35370 dwt dely Durban 1/3 May trip via Brazil redel Montreal $10000 daily - Fortuna Seaside 'Tolmi' 1989 30976 dwt dely Novorossiysk prompt trip redel Tunisia $14500 daily
'Kingfisher D' 2002 28425 dwt dely Conakry prompt trip redel St Petersburg approx $13000 daily - Oldendorff 'Jupiter Bright' 1985 26541 dwt dely Singapore 4/5 May trip via Indonesia redel south China $7250 daily - Shinyang 'Kent Timber' 1999 20427 dwt dely Shanghai early May trading about 60 days redel Singapore-Japan rge approx $6900 daily - POST
'Pleione' 1996 70189 dwt dely Dalian 30 Apr/1 May 3/5 months trading redel worldwide $12000 daily - STX Pan Ocean
'Shanghai Carrier' 1991 150000/10 Dampier/Qingdao 15/25 May $7.05 fio scale/30000sc - Rio Tinto 'Cape Glory' 2003 177173 dwt 145000/10 Itaguai/Rotterdam 20/30 May $9.75 fio for tonnage up to max 145000 excess at $7.10 fio scale/30000sc - Cetragpa
'Front Viewer' 1992 / - Billiton 28/04>
Wednesday, April 29, 2009
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|Tuesday, 28 April 2009|
| Prices for coal shipped from South Africa’s Richards Bay, site of the world’s largest export terminal for the fuel, fell for a second consecutive week on weaker demand and sufficient stockpiles in Europe. Export prices at the port, Europe’s biggest single source for coal burned for power, dropped $1.30, or 2.1 percent, to an average of $61.50 a metric ton in the week ended April 24, according to McCloskey Group Ltd. Prices have fallen 45 percent over the past 12 months as demand for power slumped after manufacturers cut output to grapple with the global recession. The world economy will shrink 1.3 percent this year, according to the International Monetary Fund.|
“There’s lots of stocks in Europe and not many buyers around,” John Howland, an analyst at Petersfield, England-based McCloskey Group Ltd., said today by telephone. The “coal of choice” at the moment in Europe is Colombian, he said. That may ease demand for South African imports.
Colombian coal supplies may increase after a strike ended this month at Fenoco, a rail company 40 percent-owned by Xstrata Plc. That, plus the end of weather disruption in Australia, will help push prices down to an average $55 a ton in the second and third quarters, Jim Lennon, a Macquarie Group Ltd. analyst in London, wrote in a report dated today. “The market is generally well-supplied,” he said.
The port of Rotterdam, Europe’s biggest, imported 7.7 million tons of coal in the first quarter of this year, up 24 percent from the same period of 2008, the port said in an e-mail on April 9. That may indicate a buildup of stocks.
Power station coal prices at Australia’s Newcastle port, a benchmark for Asia, were almost unchanged in the week to April 24, falling one cent to $63.11 a metric ton, according to the globalCOAL NEWC Index.
Benchmark European coal derivatives fell. Coal for delivery to Amsterdam, Rotterdam or Antwerp with settlement next year retreated $2.50, or 3 percent, to $81 a ton as of 2:49 p.m. in London. The data from ICAP Plc reflect actual trades.
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|Tuesday, 28 April 2009|
| Global steel giant ArcelorMittal announced late Monday it is delaying plans to export iron ore from Liberia because of the current global economic crisis and that some 1,200 contractors will be laid off. The company, the first to start a big foreign investment in postwar Liberia, is investing more than $1.5 billion in the iron ore industry and was set to start exporting ore this year, said Joseph Mathews, chief executive officer of ArcelorMittal Liberia.|
Mathews told The Associated Press that the company has almost halved its global steel production in the current economic downturn, and that in turn has reduced the demand for iron ore.
Mathews said the company originally had planned to ship iron ore out of the West African nation later this year but that the company will now "postpone that to maybe 2010, 2011."
Some 1,200 workers who were employed by a contracting company to build a railway to transport iron ore from the mining site will have to be laid off because "the contract has been terminated."
"We put a stop to our construction activities," he said, adding that the termination of the railway contract "is definite."
Liberia's Lands, Mines and Energy Minister Eugene Shannon said the company's management needs to explain whether the slowdown also will affect money the company was due to pay to the Liberian government.
Shannon wants ArcelorMittal Liberia to state when the company will start exporting ore and what happens to the portion of the agreement relating to exports this year.
"The Mineral Development Agreement also talks about employment opportunities for our people; he needs to explain what happens to this," Shannon said.
The concession agreement grants the right to ArcelorMittal to export 12 million tonnes of ore a year for 25 years.
Liberia was ravaged by civil wars for years until 2003. The drawn-out conflict that began in 1989 left about 200,000 people dead and displaced half the country's population of 3 million.
Source: Associated Press
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|Tuesday, 28 April 2009|
| Norway's Partner Shipping AS and Praxis Logistics of Australia will launch a triangular auto and heavy cargo service linking the West Coast of North America, Asia and Australia/Zealand. The companies signed an agreement with Vroom, a Dutch ship-owner, to charter two pure car and truck carriers nearing completion at the Mitsubishi Heavy Industry shipyard in Japan to operate the service. The vessels each have capacity for 3,930 cars.|
The NAPA [North America PAcific] service will operate from the U.S. West Coast via Singapore to Australia and New Zealand and then return directly to North America.
The inaugural voyage will leave Long Beach, Calif., on June 10, 2009.
Partner Shipping said the service will focus on import cargoes from North America to Asia and Australia and New Zealand and exports from Australasia to North America. It will target autos and high and heavy cargoes.
"The service is responding to demand in existing and emerging markets where current servicing has been inadequate, namely North America and Asia," the Grimstad-based carrier said.
Partner said its aim is to deliver an "uncomplicated, cost effective, flexible and reliable" service.
As the service is being introduced during a global economic recession "it will be able to deliver a paradigm shift in what the market expects from its ocean shipping service and what can be delivered particularly in terms of value for money," Partner claimed.
Wallenius Wilhelmsen Logistics, one of the world's biggest ocean car carriers, in March said it expects to idle up to 20 percent of its fleet this year in response to the 30-40 percent decline in seaborne auto shipments.
Partner Shipping and Praxis Logistics were established in 2008 by shipping executives with experience in the automotive, roll-on, roll-off and break bulk sectors.
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|Tuesday, 28 April 2009|
| The owner of a ship that ran aground off an Alaska island in 2004 has paid the state almost $1 million in the largest oil spill settlement since the Exxon Valdez accident 20 years ago, according to officials from the Alaska departments of Law and Environmental Conservation. Singapore-based IMC Shipping settled Alaska's claims for damage caused by the wreck of the company's Selendang Ayu, a 738-foot Malaysian-flagged freighter that split in two in December 2004 and disgorged its fuel into fish-rich waters.|
The company paid $844,707 overall in oil-spill fines and associated penalties, Alaska officials said on Monday.
IMC Shipping had already paid more than $111 million in cleanup costs and other charges, including $9 million in federal criminal penalties assessed in 2007 and $2.5 million in cleanup-cost reimbursement to the state, officials said.
The spill was Alaska's biggest since the Exxon Valdez disaster of 1989. The settlement was the largest struck by the state over an oil spill since Exxon Corp, now part of Exxon Mobil Corp, agreed in 1991 to pay Alaska and the U.S. government $900 million to settle civil claims after its 11 million gallon spill.
The Selendang Ayu ship, hauling 60,000 metric tons of soybeans from Washington state to China, drifted for two days without power over a storm-tossed Bering Sea. The broken ship poured 354,218 gallons of fuel and oil spilled into the ocean, fouling coastline and freshwater streams and forcing a commercial fishing closure.
Still pending against IMC Shipping are natural-resource damage claims to be filed by the state and federal government, Alaska officials said. A federal-state restoration team, led by the U.S. Fish and Wildlife Service, is still tallying damages to birds, marine mammals and other natural resources.
About 3,600 large cargo ships traverse through the Aleutian Islands each year along the Great Circle route, according to the Coast Guard. Environmentalists and fishermen are seeking greater cargo-ship regulation in the region, which contains ecologically sensitive areas and important commercial fishing grounds.
Tuesday, April 28, 2009
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|Tuesday, 28 April 2009|
| A senior executive for the world's largest box liner has forecast consolidation in the industry on the back the current recession, but only after the economy starts recovering. “There will be absolutely no consolidation right now. We are currently focusing on quality for our customers while cutting costs and keeping to basic business parameters,” said Jesper Praestensgaard, Asia Pacific CEO for Maersk Line.|
Speaking at a conference session at Sea Asia 2009 in Singapore, Praestensgaard said the industry at large, including Maersk, was at present “trying to make ends meet”.
But said the basic characteristics for the box liner trades called for consolidation, something which he expected to take place as the recession faded away.
He said box shipping was capital intensive with very high fixed costs and low margins.
“That makes a perfect recipe for intense competition, and the industry needs alliances to capitalize on economies of scale.” he added.
This consolidation of box liners may not be too far off, judging by comments made at the same conference session by Kuah Boon Wee, Southeast Asia CEO for PSA International.
“I'm quietly confident that physical trade in terms of containers has actually bottomed...and the trend moving ahead is likely to be positive,” he said.
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|Tuesday, 28 April 2009|
| The dry bulk freight market will remain at low levels for months to come, as proven by the Baltic Dry Index’s returns from March onwards. After the rally of the first two months of the years, which was a normal reaction of the market, rates have succumbed to downward pressures, unable to return back at healther and more sustainable levels, which according to some analysts should be at about 5,000 points. Monday was once more a plunging session for the BDI, following the trend set on Friday, when the the index lost 1.3 percent or 24 points to 1,873. Yesterday, the index lost a further 34 points to end at 1,839 points, losing steam once again, despite the fact that it managed to gain 25 percent from the fall of the previous five weeks. The panamax index lost the most yesterday, to end at 1,575 points, down by 87, while capesizes also shed 51 points to end at 2,443 points. On the contrary, smaller vessel types managed to post positive returns, rising by 18 to 1,453 points (Supramaxes) and by six points at 698 (handies).|
Market analysts suggested that what’s absent is a clear direction. With the steel industry accounting for almost half of all seaborne bulk cargoes, things are looking pretty grim for 2009. Yesterday, the World Steel Association predicted a fall of 15% in steel production during this year. Mr. George Grigoriadis, financial analyst at George Moundreas, speaking at Hellenic Shipping News, said that China alone can’t raise the market. “During the first quarter of the year, Chinese iron ore imports were equal to the same period of 2008, with buyers looking to replenish stocks at lower prices. Despite that, the market didn’t manage to post healthy earnings, still remaining at incredibly low levels. This is because activity and imports in the rest of the developed world took a steep dive. So, until the economic situation improves at these nations, the dry bulk market won’t experience better results, not to mention the huge challenge posed by the large orderbook. In our opinion, the potential rebound of global trade, expected between the final quarter of 2009 and the second quarter of 2010, won’t be reflected in the dry bulk market for some months” said Mr. Grigoriadis.
In fact, construction of new dry bulk carriers is likely to push rates down, despite the fact until now up to 100 orders for bulkers have been cancelled. Current orders will expand the world fleet by 17 percent this year alone, to 495 million dwt tons, according to Drewry Shipping Consultants. About 2.5 per cent of dry-bulk vessels were demolished in the past six months, up from practically zero in recent years, and as many as half of ordered dry-bulk ships may not take to sea, D/S Norden A/S, Europe's biggest commodities-shipping line, said last week.
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Shanghai: A senior spokesperson for Beijing’s National Energy Administration, He Ying, outlined China’s plans to become self-sufficient in both shipbuilding and transportation of LNG in the coming years in an opening address at TradeWinds’ Shipping China Energy conference in Shanghai.
The official said that more LNG terminals would be built in Jiangsu and Zhejiang provinces to go alongside the four current stated terminals in Shenzhen, Shanghai, Fujian and Liaoning.
The administration warned that there were likely to be 400 LNG carriers operating worldwide by end 2010, up from the current 305. “On the whole, supply of carriers will outstrip demand from 2008 to 2010,” the spokesperson said.
Hudong-Zhonghua is completing the last three of the debut six-ship LNG order at the moment. The yard has also developed a 200,000 cu m design to go alongside its 160,000 cu m design.
“China’s goal is to become self-sufficient in LNG shipbuilding and transportation,” the spokesperson concluded. [27/04/09]
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Shanghai: Mao Shijia, the md at wet and dry major China Shipping Development, has called for a Chinese VLCC pool to overcome the current downturn. Speaking at TradeWinds’ Shipping China Energy conference, Mao acknowledged that tanker rates continue to plunge this quarter and will continue to do so this year and next. The scrapping of single hulls should see the tanker market bottom out next year and come back to health in 2011, he suggested. He was confident that of the various shipping sectors tankers would be the first to come out of the current shipping malaise.
Mao called for Chinese owners to get through the “severe winter” by setting up a VLCC pool. This would help share risks and get scales of economy.
He also called for tanker owners to go beyond their traditional seaborne remit and further their oil supply chain footprint, extending interests into terminals, pipelines and rail.
At a q&a session later Mao said that the coming together of the big three state owned oil conglomerates and the big three state owned shipping firms was a good and inevitable thing. "I think there is a possibility for upstream and downstream businesses to colloborate together to consolidate business." This talk of Chinese partnership worried some shipowners in the room, who voiced concerns over possible protectionism being exercised by China's shipping majors. [27/04/09]
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| Fortescue Metals Group Ltd., Australia’s third-biggest iron-ore exporter, was suspended from being a member of the Baltic Exchange, the world’s largest shipping bourse. It’s the first suspension since 2005, exchange spokesman Bill Lines said by phone today, declining to comment further. The bourse’s 560 members include ArcelorMittal, the world’s largest steelmaker, and Glencore International AG, the biggest commodities trader. East Perth, Australia-based Fortescue has yet to receive official notification from the exchange, company spokesman Cameron Morse said by phone. Fortescue is scheduled to start arbitration over shipping contracts in June, Morse said.|
The action will have “little operational effect” on Fortescue, Morse said. The primary role of the Baltic Exchange is to provide price data that commodity producers and oil companies use as benchmarks for their shipping costs. Its data is also used to settle freight-derivatives contracts.
Greek shipping billionaire John Angelicoussis sued Fortescue for $130 million in December, according to a Dec. 11 filing in a U.S. federal court in New York. Ship-rental rates plunged by a record 92 percent last year.
Source: Alaric Nightingale, Bloomberg
Thursday, April 23, 2009
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Janet Porter - Wednesday 22 April 2009CONTAINERSHIP demolition activity is increasing sharply as owners take whatever action they can to eliminate unwanted tonnage as cargo demand remains slack and freight rates are at rockbottom.
However, as newbuilding deliveries continue at a record pace, scrapping is unlikely to have any significant impact on fleet capacity. Instead, many lines are still relying on lay-ups or more short-term tonnage removal schemes to keep supply under control.
The exact number of idle boxships is difficult to verify at any one time. Vessels are constantly being withdrawn and then returned to service as lines revamp their networks.
The world’s largest carrier, Maersk Line, confirmed this week that it currently has 12 ships out of action, most of which are 5,000 teu-6,500 teu, while several more are either being prepared for lay-up or have been identified as future candidates. At the same time, some units that had been left at anchor are now being brought back into service.
That puts the Danish line at the top of the table regarding idle tonnage, followed by APL and then Chile’s CSAV, which has five 6,500 teu vessels currently unemployed because of a service shutdown.
No ships of this size are being sent to the breakers, with the largest scrap candidates being a handful in the 4,000 teu-5,200 teu category.
Most of the ships being sold for scrap are in the 2,000 teu-3,000 teu size range, with an estimated 56,000 teu likely to be deleted this year.
Maersk Broker now expects total boxship demolition to reach 240,000 teu in 2009, which is double its earlier projection. The 2010 forecast has been revised from an earlier figure of 70,000 teu to 140,000 teu.
So far this year, 77,896 teu of containership capacity has been sold to breakers, according to Maersk Broker.
Higher scrapping levels are having a modest impact on fleet growth, with the 2008 figure adjusted very slightly from 13% to 12.9% as a result of more demolition. Capacity expansion for 2009 has been revised downwards from 14.9% to 13.5%, while the 2010 figure is now expected to be around “a manageable” 10.6% rather than 11.2% previously.
For all size categories up to 3,949 teu, fleet expansion this year will be in single digits thanks in part to more scrapping. In contrast, fleet growth for vessels in excess of 11,000 teu will be 133% as this new generation of vessels starts to enter service.
Ordering activity remains at a complete standstill, with March the sixth consecutive month of zero containership contracting. That has reduced the size of the orderbook to 45.5% of the existing fleet compared with 47.1% a month ago, according to Maersk Broker.
Shipyards remain under huge pressure to either delay deliveries or even accept some cancellations, while rumours persists that some owners are struggling to meet their financial commitments.
Lines are having a difficult time forcing freight rates up, particularly those that handle a large amount of spot cargo for freight forwarders.
While carriers with large beneficial cargo owner accounts are having more success obtaining some increases in their Asia-Europe service agreements, others say spot rates have slipped back over the past week by about $50 per teu.
This follows some very modest gains of $100-$200 that were achieved at the start of the month, when most lines announced rate restoration programmes.
BHP Billiton, the world's largest miner, expects market conditions to remain uncertain as its base metals output falls.
Baltic Dry Index,Baltic Dry Indices,Ship Chartering,Shipchartering,Voyage Fixtures,Time Charter Fixtures,Panamax,Capesize,Handymax,Handysize,Supramax,Dry Cargo Fixtures,Bulk Cargo Fixtures,Baltic Exchange, BHP Billiton, Mining Down, Commodities Slump, Copper, Steel, Iron Ore Slump, Iron Ore Negotiations, Freight Review,Maritime Baltic Index,TNT Freight ReviewThe Melbourne-based BHP , which today reported a slight 1 per cent fall in third quarter iron ore production, said it expects market conditions to remain uncertain in the medium term and that all of its businesses will remain under review.
“We will continue to take appropriate actions in any business that is cash negative and set to remain so, or where there is a lack of demand,” BHP said in a statement.
The Anglo-Australian company, which retracted an all-share takeover bid for rival Rio Tinto last year because of deteriorating market conditions, reiterated that it’s well placed to take advantages of acquisition opportunities.
Unlike its peers in the global iron ore arena, like Rio Tinto and Brazil’s Vale, BHP has yet to announce any significant cuts in iron ore production, despite falling demand.
It did, however, decide to slash nickel and coal output in January.
BHP said iron ore production in the three months to March 31 fell just 1 per cent on year to 28.19 million tonnes.
For the nine months to March 31, production rose by 6 per cent to 87.37 million tonnes, which is a record year-to-date figure.
Quarterly production was affected by cyclone interruptions and safety incidents, BHP said.
In a sign global demand for iron has been impacted by slowing national economies, BHP said its Pilbara operation, Western Australian Iron Ore, received requests for deferrals of long term contracts.
The deferred tonnes were sold on the spot market, BHP said.
Fat Prophets Analyst Gavin Wendt said the quarterly production report was roughly in line with expectations.
“Output across the board was generally weaker because of the downturn in demand,” he said.
“Iron ore output held up well, considering the bad weather in the Pilbara, and compares well to Rio Tinto’s quarterly output, where heavy rain cut output by about 15 per cent.”
But Mr Wendt said copper output was “disappointing”, on the back of ongoing problems at the Escondida mine in Chile.
“It would probably make sense to have this old mine come under single ownership,” Mr Wendt said.
Third quarter copper production slid 14 per cent to 282,800 tonnes. BHP said total copper production at Escondida in the 2009 financial year is expected to decline by about 30 per cent.
Nickel production rose 10 per cent to 47,500 tonnes, but is sure to be effected in future quarterly reports by BHP shutting its Ravensthorpe nickel mine in Western Australia in January.
Output of metallurgical coal, used in steel production, rose 11 per cent to 7.60 million tonnes on year after operations in early 2008 were hit by flooding in Queensland.
BHP in January said it will cut coal production in Australia by 10 per cent to 15 per cent, equivalent to an annual loss of 4 million to 6 million tonnes.
Production of petroleum products fell 3 per cent to 31.67 million barrels of oil equivalent.
Third quarter lead production fell 30 per cent to 47.24 million tonnes, silver production dropped 22 per cent to 8.73 million ounces and aluminium output fell 4 per cent to 304,000 tonnes.
Zinc production rose 10 per cent to 39.40 million tonnes.
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|Thursday, 23 April 2009|
| Shipowners probably canceled orders for 260 vessels carrying commodities and containers as the global recession choked demand and a credit crunch reduced funding, a consultant said. Shipyards received new orders for 255 million gross tonnage in capacity in the past three years, and about 7 million tons in confirmed contracts may have been canceled, according to Roy Thomson, a regional marine manager in Asia for Lloyds Register, which certifies ships. Yards may have lost $20 billion in revenue from the cancellations, based on Bloomberg calculations.|
“We will see more cancellations,” Thomson said in an interview today at the Sea Asia 2009 conference in Singapore. “We have not gotten to the root of it yet.”
An investment boom in shipping took place in the past four years, prompted by cheap credit and China’s soaring demand for steel, ore and grains. The global economic contraction and plunge in prices of coal, ore and grains led to lower shipping rates last year.
About a third of the cancellations may have been for bulk carriers, which transport ore, grains and other commodities, said Thomson, who has more than 25 years’ experience in the shipping industry.
“The shipping industry has been hit by both supply and demand problems,” Arjun Batra, managing director for consulting at London-based Drewry Shipping Consultants Ltd., told Bloomberg News today in Singapore. “There’s a surplus of carriers and demand has fallen in China and other markets.”
Lloyds Register, which certifies ships, has about 18 percent of the global market share in the existing commercial fleet of about 8,400 vessels, said Russell Barling, a spokesman for Lloyd’s Register.
The biggest bulk carriers at the peak of the shipping boom in the first quarter of last year may have cost as much as $100 million each while large size tankers and container vessels cost as much as $135 million, Thomson said.
Leading shipyards in South Korea and elsewhere may not have reduced prices as yet because their order books are full from previous contracts and scheduled deliveries this year may be unaffected, Thomson said. Shipowners have started renegotiating with yards to reduce prices of newbuilds, creating uncertainty in construction schedules next year.
There are 3,424 commodity carriers presently on order at shipyards around the world, according to data from London-based Drewry Shipping Consultants Ltd. Those vessels will have a combined carrying capacity of about 294 million deadweight tons, or 70 percent of the existing global fleet. Deadweight tons measure a ship’s capacity to carry cargo, fuel and water.
As much as 50 percent of the global order book may be canceled because of the collapse in markets and constrained financing, Carsten Mortensen, chief executive officer of Danish shipping company D/S Norden A/S, said April 7.
There were few orders for large vessels transporting ore and oil this year though yards are still building specialist vessels such as anchor handlers, tug boats and vessels for the oil and gas industry, Thomson said.
About 6 percent of Lloyds Register’s order book to certify vessels was canceled in the past six months, Thomson said. Yards received new orders of 80 million gross tonnage in 2006, 130 million in 2007 and 45 million last year, he said.
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|Thursday, 23 April 2009|
| Today is day two of Sea Asia 2009 shipping exhibition and conference in Singapore. I am like a child in a candy store surrounded by the technology I love, talking ship talk, and arguing economics. And what I love about Asia business is their marketing skills – young ladies in short skirts. I have yet to see the entire exhibition. There was an interesting point made in a panel discussion explaining why too many dry bulk ships are being built. The story begins in the Amazon in 2004. Major storms caused flooding and several months of not being able to load commodities. The ships being backed up were the cape sized bulk carriers. The unloading facilities for this size of ship are limited worldwide. So not only were they backed up to load, there were significant waits for access to off-loading facilities. Cycle times were running 30% higher than normal.|
Once this logjam began, it did not dissipate. Adding fuel to the fire was rail problems (getting commodities to the port) in Australia and China's growth (including the Olympics). Shipping rates (Baltic Dry Index) went ballistic as there was a shortage of ships. Ship owners suddenly saw non-shipping money flowing in to cash in on the riches. With the help of this new money, orders for building these cape sized bulk carriers started running eight times the historical average.
Suddenly the clock struck midnight, and everything turned back to pumpkins and mice. The Great Recession began. As quickly as the golden age began, it returned to the dog-eat-dog world of yesterday – only this time the economic crisis was worldwide, all these new ships were about to be delivered, and the new money evaporated.
What I loved was the smile on the faces of these major bulk carrier players. This was the challenge they had been waiting for.
Finance was the economic topic of the day with a panel lead by the banks and financial institutions which dominate shipping industry finance. For me, it was a continuation of the Perfect Storm.
The lending facility to shipping has dropped from 30 active banks to under 10 active banks. The interesting feature is that there are new banks such as Bank of America and Wells Fargo joining the ship lending group. The banks leaving the market either are in financial distress, or because of government bailouts are restricted to lending to “in country” clients only. WOW, in Europe or Asia when bailout money is given to the banks – they are restricted to lending within the country. In America, we are bailing out the world.
Even with loan syndication, industry loans are limited to $100 million. The Catch 22 is that syndication is almost zero in 2009.
Banks are cherry picking, only lending to the most credit worthy.
Bank's capital basis is very low. Worldwide, the banking capital base is down 25% requiring unwinding of their lending positions to rebuild equity. Banks are not lending.
The bankers all say LIBOR is not representative of their costs for lending and that a new benchmark is needed. Holy crap batman, isn't that what customers are saying too? Evidently, everyone thinks LIBOR is bogus.
There are high credit risk premiums for the shipping industry.
Vultures are waiting for the asset value of ships for fall to scrap value. The banking industry has made its highest profits when the shipping industry is under duress.
It is the opinion of the banking industry that most of the ships under construction will be completed – even if the fabrication contract is canceled. The governments where the ships are being fabricated will use this construction as economic stimulus. By 2011, there will be twice as many ships as needed across almost all shipping sectors. The industry needs the ship construction to be canceled.
Overall shipping industry asset values look to be in trouble. Future shipping rates seem to be under pressure due to overabundance of new build ships.
Source: Seeking Alpha
Baltic Exchange Capesize Index TM - 22 April 2009