Monday, January 05, 2009
2008, a year of mixed fortunes for shipping companies
Monday, 05 January 2009
It was a year of mixed fortunes for Indian shipping companies. Starting off on a cheerful note in the beginning of the year, when the freight market was booming, shipping companies had to take a hard hit in the last four months of the year, when freight rates plummeted sharply. Dry bulk segment The charter rates began to drop from August 2008, but took a steep fall in the last four months, especially in the dry bulk segment.
The Baltic Dry Index, an indicator of the dry bulk market, fell to 8,934 in July 2008, a 12.8 per cent fall from the previous month. Thereafter, it fell to an average of 4,975 in September, a 32 per cent fall from the previous month and touched 1,808 in October and 824 in November.
On December 25, it was as low as 774.
The overall fall in BDI from July to December works out to about 90 per cent, industry sources say.
Liners
In the liner sector, the fall ranged between 50 and 70 per cent from the Indian sub-continent to Far East, West Asia and Europe sectors.
The freight rates are also falling on the return legs between 35 and 50 per cent.
In the tanker segment, it was a less steep fall compared with the freight rates in the dry bulk segment.
Tankers
The Baltic Dirty Tanker Index fell from 1,866 as on July 1, 2008 to 1,073 by November end, a drop of 42 per cent.
The Baltic Clean Tanker Index during this period fell by about 40 per cent to touch 880 by November end.
Industry sources said the chemical market, especially commodities such as benzene, toluene and xylene, softened by 10-15 per cent during this period, especially in the east of Suez markets.
In general, freight rates fell across all sectors and geographies.
However, some trades have been more affected, such as iron ore exports from Brazil and India to China. Cape size bulk carriers, handymax bulk carriers and supramax carriers, which mostly operate from Brazil and India, witnessed the steepest reduction.
Far East markets
On the Far East sector — from India to China, Korea, Hong Kong, Singapore and Malaysia, the fall in freight rates was about 50 per cent in the last four months, while from the Far Eastern ports to Indian sub-continent, the fall was about 60 per cent.
Analysts attribute the fall in freight rates mostly to the financial crisis that unfolded in the US and then spread to Europe and other countries.
Also, China found itself with a huge inventory of iron ore and coal, which pulled down demand for sea transportation further.
Trade, industry sources said, was also hampered by lack of confidence between banks, through which the letters of credit are routed.
The prices of major traded commodities such as iron ore, steel and other metals also collapsed due to lack of demand, constricting trade in these commodities.
Analysts say this trend is likely to continue in the coming months, as there will be pressure on demand.
Also, the competition is becoming fierce, which will put pressure on freight rates.
As adapted from The Hindu Business Line
Hyundai Heavy Industries misses 2008 sales goal
Seoul: Hyundai Heavy Industries has revealed that it failed to meet its target for new orders in 2008 as the global recession sapped demand for vessels, writes Bloomberg. New orders for ships, marine engines, offshore platforms and other products probably rose 13% to $28.2bn, falling short of the $29.4bn target, the Ulsan, Korea-based company said in a regulatory filing on Wednesday.
The worst global financial crisis since the Great Depression has caused funds to dry up, making it difficult for shipping lines to arrange loans for new vessels and pay for the ones they’ve ordered.
The meltdown has prompted trade to slump, with the World Bank projecting the first decline in almost 30 years.
“Next year [2009], business uncertainty will be greater and profitability and cash earnings will worsen,” Hyundai Heavy’s vice chairman and ceo Min Keh-sik said in a year-end speech to employees on Wednesday, a copy of which was e-mailed by the company to reporters.
Hyundai Heavy had no orders for new vessels for three months since October as demand for iron ore and consumer goods plunged. Sales will probably climb 26% to a record 19.6 trillion won ($16bn) as more vessels are built at higher prices, exceeding its target of 18.1 trillion won, Hyundai Heavy said in the filing.
The company delivered a record 102 vessels last year, 28% more than in 2007 as it worked through almost four years of order backlog. The yard expects to hand over 119 vessels to shipowners in 2009, it said. [02/01/09]
The Daily Fixtures Report - 05/01/2009
BDI 772 DOWN 1
BCI 1386 UP 25
BPI 525 DOWN 15
BSI 403 DOWN 8
BHSI 276 DOWN 3
TIMECHARTER
'Fernandina' 2006 174204 dwt dely Amsterdam 1/5 Jan transatlantic round
including via Richards Bay redel Skaw-Cape Passero $6000 daily - Swiss Marine
'Cape Pioneer' 2005 170012 dwt dely Hunterston 4/6 Jan transatlantic round
redel Skaw-Cape Passero $6500 daily - Swiss Marine
'Collonges' 1993 149391 dwt dely S.Korea 30/31 Dec 12 months trading redel
worldwide $14000 daily - Swiss Marine -
'Lowlands Camellia' 2006 76807 dwt dely Amsterdam 6/8 Jan t trip via USEC redel
India approx $8250 daily - Noble
'Bahia' 2004 76801 dwt dely aps N.France ppt trip via Egypt redel Cape Passero
$7000 daily + $15000 bb - National Navigation of Cairo
'Pepito' 2001 75928 dwt dely Pagbiliao 8/10 Jan trip via Indonesia redel
Skaw-Cape Passero $1700 daily - Cargill
'Cinzia D'Amato' 2000 74716 dwt dely Jorf Lasfar ppt trip via Orinoco redel
China $8000 daily - Uniwell
'Bunga Saga 9' 1999 73127 dwt dely San Cyprian 31 Dec trip via Trombetas redel
Continent approx $4250 daily - Transfield -
'Drin' 1996 73087 dwt dely Skaw ppt trip via US Gulf redel Japan $7750 daily -
NYG
'Shekou Sea' 1996 72394 dwt dely Mawan 1/3 Jan trip via India redel China
$2300 daily - cnr
'Ocean Prelate' 2002 52433 dwt dely North China 6/7 January trip via
South-east Asia redel Singapore $3000 daily - Nasco Singapore
'Cos Lucky' 2003 52341 dwt dely Xingang spot trip via South-east Asia redel
Singapore $2500 daily - Nasco Singapore
'Bianco Bulker' 2001 52036 dwt dely Haldia mid January trip redel China approx
$11000 daily - SK Resources
'Clementine' 2004 52036 dwt dely aps West Coast India early January trip redel
China approx $8250 daily - Chinese charterer
'Dominator' 1991 22174 dwt dely aps Recife prompt trip redel Venezuela $5750
daily - The Rice Company
ORE
'Caladium' 2006 160000/10 Port Hedland/Qingdao 10/15 Jan $5.50 fio scale/30000sc
- BHP Billiton
'Aeolian Glory' 1995 150000/10 Dampier/China 6/15 Jan $5.30 fio scale/30000sc -
Rio Tinto -
'C.Summit' 1995 150000/10 Seven Islands/Qingdao 19/24 Jan $14.25 fio
scale/30000sc - Rio Tinto - fixed last week
'Ata' 1985 150000/10 Esperance/Qingdao 5/15 Jan $5.75 fio scale/30000sc - Noble
Saturday, January 03, 2009
Sector Snap: Drybulk shippers rise on stable steel
Friday January 2, 11:53 am ET
Drybulk shipping stocks jump as activity blips up for largest vessels, steel prices stabilize
NEW YORK (AP) -- Shares of drybulk shippers accelerated Friday as activity for the sector's largest vessels rose slightly and prices for steel -- a major commodity they haul -- stabilized.
Rates for Capesize vessels rose 1.2 percent to $8,997 per day on Friday, according to Dahlman Rose analyst Omar Notka. Capesize vessels are so named because they are too big to fit through the Panama or Suez Canals and must instead navigate around the Cape of Good Hope or Cape Horn to travel between oceans.
Other vessel classes lost ground. All drybulk vessel rates have plunged in recent months as commodity demand fell off, prices of iron ore, coal and grain sank and tight credit froze shipping markets. Just one year ago, the daily rate for a Capesize vessel was $153,295.
Notka said that although rates remain very low and a surplus of idle ships threatens to keep rates low for some time, stability in steel prices has managed somewhat to buoy the market.
In midday trading, Diana Shipping Inc. shares jumped $1.30, or 10 percent, to $14.06. DryShips Inc. rose $1.97, or 18 percent, to $12.63. Genco Shipping & Trading Ltd. gained $2.24, or 15 percent, to $17.04.
Friday, January 02, 2009
After worst year ever, commodities may lag recovery
Friday, 02 January 2009
Commodities, until six months ago the darling of investors and an out-performing asset class, sealed their worst year on record with accelerating losses in the fourth quarter of the year, data showed on Thursday. Industrial metals, crude oil and even grains took it on the chin as the world fell into recession and investors sold anything liquid or risky to cover deepening losses elsewhere or sock away cash for a brighter day, wiping out six years of nearly unbroken gains in the space of months.
Commodities led the charge lower over the second half of the year with more than 50 percent plunge since July, double the decline in the U.S. Dow Jones stock index .DJI, and some analysts say they will probably lag a recovery that is now expected to materialize only in the second half of next year.
"At the moment, confidence in the commodity market is short, definitely short. That confidence would start to be restored when we start to see a rebound in equity markets again," said Mark Pervan, head of Australia & New Zealand Bank Research.
"There are a lot of nervous investors, who in some cases probably are not prepared to wade back in until they see more signs of things recovering."
The five commodity indexes used most heavily by investors to gain exposure to raw material prices -- tracking energy, metals and agriculture markets -- showed an average 40.5 percent dive in the fourth quarter, taking the full-year fall to 42.35 percent.
Indices collapsed by more than two-thirds from their record highs in early July, suffering a 25 percent average loss in the third quarter -- the first negative performance for commodities after four straight positive quarters that had handed investors some of their best returns in 35 years.
With key equity indexes also posting their biggest quarterly drop ever -- the Dow Jones suffered a 34 percent fall, its third worst ever -- investors are now banking on a major economic stimulus package from U.S. President-elect Barack Obama to minimize the severity of a global economic downturn.
"For the first quarter, I feel that commodity prices will stabilize as we prepare for a number of changes," said Adrian Koh, analyst at Phillip Futures in Singapore.
"Crude oil is becoming increasingly cheap as compared to other commodities and in the long-term, it should move higher. However, it's still on a sharp downtrend."
Obama has said signing a economic stimulus package will be his priority when he takes office on January 20, while one of his top economic advisers said financial policy should address both immediate job creation and longer-term investment needs.
The broad-based Reuters-Jefferies CRB index .CRB of 19 mostly U.S.-traded commodity markets including oil, coffee, gold, corn and copper shed one-third of its value in the fourth quarter, its worst quarterly showing ever.
At its early July peak, the CRB had surged 250 percent since the start of 2002; by year end, it was up only 20 percent.
ALTERNATIVE DIVESTMENT
Still considered an alternative to mainstream investments, commodities' losses were mild compared to the trillions of dollars sucked out of stocks, but no less unpleasant.
Institutional funds who shunned commodities until earlier this decade flooded into the sector since 2003, increasing investment 20-fold to a peak above $200 billion by the middle of this year, a shift often blamed for the rally in prices.
Those funds fell sharply as prices collapsed -- by the fourth quarter, commodity assets under management had fallen by about a third to $144 billion, according to Barclays Capital estimates.
But it also said that only a small portion of that drop was caused by active withdrawals, suggesting most of pension funds and investors are sticking with the sector, for now.
Among the commodity markets, oil and copper stood out as the biggest major losers, both falling by just over 50 percent on the year. The biggest winner by a stretch was London cocoa, which surged 66 percent.
Gold, which rallied to a record high above $1,000 an ounce in March before slipping to around $880, fared better than most to squeeze out a more than 5 percent rise in 2008, and could be a bright light if the economy darkens more in coming months.
"I think in the short to medium term, in the next few months, gold will probably hold a lot better than most of its peers," said Darren Heathcote of Investec Australia.
losses elsewhere or sock away cash for a brighter day, wiping out six years of nearly unbroken gains in the space of months.
Commodities led the charge lower over the second half of the year with more than 50 percent plunge since July, double the decline in the U.S. Dow Jones stock index .DJI, and some analysts say they will probably lag a recovery that is now expected to materialize only in the second half of next year.
"At the moment, confidence in the commodity market is short, definitely short. That confidence would start to be restored when we start to see a rebound in equity markets again," said Mark Pervan, head of Australia & New Zealand Bank Research.
"There are a lot of nervous investors, who in some cases probably are not prepared to wade back in until they see more signs of things recovering."
The five commodity indexes used most heavily by investors to gain exposure to raw material prices -- tracking energy, metals and agriculture markets -- showed an average 40.5 percent dive in the fourth quarter, taking the full-year fall to 42.35 percent.
Indices collapsed by more than two-thirds from their record highs in early July, suffering a 25 percent average loss in the third quarter -- the first negative performance for commodities after four straight positive quarters that had handed investors some of their best returns in 35 years.
With key equity indexes also posting their biggest quarterly drop ever -- the Dow Jones suffered a 34 percent fall, its third worst ever -- investors are now banking on a major economic stimulus package from U.S. President-elect Barack Obama to minimize the severity of a global economic downturn.
"For the first quarter, I feel that commodity prices will stabilize as we prepare for a number of changes," said Adrian Koh, analyst at Phillip Futures in Singapore.
"Crude oil is becoming increasingly cheap as compared to other commodities and in the long-term, it should move higher. However, it's still on a sharp downtrend."
Obama has said signing a economic stimulus package will be his priority when he takes office on January 20, while one of his top economic advisers said financial policy should address both immediate job creation and longer-term investment needs.
The broad-based Reuters-Jefferies CRB index .CRB of 19 mostly U.S.-traded commodity markets including oil, coffee, gold, corn and copper shed one-third of its value in the fourth quarter, its worst quarterly showing ever.
At its early July peak, the CRB had surged 250 percent since the start of 2002; by year end, it was up only 20 percent.
ALTERNATIVE DIVESTMENT
Still considered an alternative to mainstream investments, commodities' losses were mild compared to the trillions of dollars sucked out of stocks, but no less unpleasant.
Institutional funds who shunned commodities until earlier this decade flooded into the sector since 2003, increasing investment 20-fold to a peak above $200 billion by the middle of this year, a shift often blamed for the rally in prices.
Those funds fell sharply as prices collapsed -- by the fourth quarter, commodity assets under management had fallen by about a third to $144 billion, according to Barclays Capital estimates.
But it also said that only a small portion of that drop was caused by active withdrawals, suggesting most of pension funds and investors are sticking with the sector, for now.
Among the commodity markets, oil and copper stood out as the biggest major losers, both falling by just over 50 percent on the year. The biggest winner by a stretch was London cocoa, which surged 66 percent.
Gold, which rallied to a record high above $1,000 an ounce in March before slipping to around $880, fared better than most to squeeze out a more than 5 percent rise in 2008, and could be a bright light if the economy darkens more in coming months.
"I think in the short to medium term, in the next few months, gold will probably hold a lot better than most of its peers," said Darren Heathcote of Investec Australia.
as adapted from Reuters
Mixed emotions for the dry bulk industry
Friday, 02 January 2009
At the beginning of 2008 nobody could have predicted what would happen in the freight market from September onwards. The first quarter was marked with a sluggish activity, mainly due to severe weather conditions in many parts of the world which are key to the dry bulk shipping industry. The second quarter was a pleasant surprise for everybody almost up until the Olympic Games of Beijing. The market’s rally was almost unprecedented, with the BDI having reached by the end of May all-time highs of 11,793 points. Euphoria was the main sentiment, new building orders kept their pace – albeit at lower numbers than 2007 – and everybody was looking with impatience for the course of demand by September and until the end of the year. The prevailing scenario at the time was expecting a market correction, mainly from the beginning of 2009, when tonnage supply would pick up on the heels of a hefty orderbook.
Lehman’s bankruptcy on mid-September was the spark for the fire we’ve experienced until this day, leading the world economy in recession. Shipping has succumbed to an outside “disease” ending the year in crisis, with all predictions being pointless. Since the market highs achieved in May and June, time charter averages for the four main bulk sectors have lost between 91% and 96% of their value. Capes have suffered the most and now stand at 4% of their June peak (against 5%, 7% and 9% for Panamax, Supramax and Handysize).
Underlying trade figures demonstrate why: from June to the last recorded month of October global steel production volumes dropped 15% to 100m tonnes, while China’s output fell nearly a quarter to 36m tonnes. Commodity prices have come under pressure and this week thermal coal exporter Xstrata Plc settled its contracts with Japanese utilities for 2009 at $80 per ton, compared to US$125 per ton last year.
Amidst the gloom we can find a few positive elements. In the shipbuilding sector, owners have been quick to react. In the first quarter of 2008, nearly 320 ships were ordered. However in the final quarter of the year, just six ships have been contracted. This combined with the picking up of scrapping activity for older tonnage, as well as ship lay-ups has restricted tonnage supply, as ship owners are looking to revive the market in any way possible. The first few months of 2009 will be crucial for many shipping companies, as they will struggle to make ends meet. Let’s hope for the best and for a swift pick-up of the world economy, as this will prove to be the catalyst for a similar growth of the world trade, together with the return of the global banking system to normal activity.
China lifts temporary price controls on LPG and coal
Shanghai: China, the world's second biggest energy consumer, lifted temporary price controls on liquefied petroleum gas, power-station coal and some staple foods such as grains and cooking oil as inflation eased, writes Bloomberg.
The removal of the price caps will take effect from tomorrow, the National Development and Reform Commission said in a statement on its Web site today.
China's inflation cooled to the weakest pace in almost two years in November. Policy makers, who 10 months ago were battling inflation at a 12-year high, are trying to prevent a spiral of falling prices, profits and consumption as the global recession pushes the economy into a slump.
China in January imposed temporary curbs on price increases for some staple foods and LPG to cool inflation expectations and ease “social tensions.”' Producers and sellers of grain, cooking oil, meat products, milk, eggs and LPG must seek government approval for increases, the top planning agency said at the time.
The government in June ordered a cap on prices of thermal coal to help power producers cope with costs as the country battles a sixth year of electricity shortages. [31/12/08]
How commodities would perform in 2009
Friday, 02 January 2009
The year 2008 has come to an end and as we move ahead towards 2009, we take with ourselves the experience and historical movements and events in the financial markets. 2008 witnessed commodities like crude oil and other base metals making new all time highs and also breaking multi year historical lows in the same year. The year would rightly be called as the year of Financial Tsunami in Global Economy; clearing all that came its way for instance the bankruptcy of one of the oldest banks in the history of banking i.e. the Lehman Brothers. Following this were the
bailout packages offered in USA and other countries.
Talking about India, we saw the Rupee making new historical low against the Dollar. The year also saw numerous interest rate cuts in banks across various countries. As we step into the coming year, we go with the positive feeling hoping the New Year helps stabilize the market conditions and bring the world out of one of the deepest recessions it has ever seen.
PRECIOUS METALS: Safety amid uncertainty…
Gold has remained a synonym of wealth, a safe haven asset, an inflation and US dollar hedge for decades. In recent times it has cemented all of its above strengths by performing better in absolute terms and in relative terms against other asset classes.
As the world tries to come out of one of its worst recessions, gold prices should remain firm in year 2009 reflecting safe heaven risk premium and hence supporting strong investment demand. It could subsequently rise higher as major economies recover, triggering high inflationary pressures as a result of the monetary expansion amid depreciating currencies.
Though the world may be facing deflation now, it is unsure how governments will be able overcome it and even if they are able to, we might be left with high service cost of increased debt, higher inflation. The current monetary expansion and the escalating fiscal burden should trigger a surge in global inflation with a weaker USD, hence boosting commodity prices.
BASE METALS: More pain seen in the near term..
Global economic slowdown continues to worsen the demand outlook for Industrial Metals in 2009. Manufacturing conditions around the world have declined to unprecedented territory, industrial production has weakened substantially in most parts of the world and unemploymentis rising at an alarming rate.
Weakness seen in Auto industry and Construction has led to further deterioration in the base meals outlook. Rising inventories is an important feature, which has pressured prices in 2008, with demand not picking up in near term we expect the inventory levels to grow in coming months.
Substantial policy action by governments and Federal Reserves globally – including meaningful fiscal stimulus packages announced by China of $586 billion plan to improve national infrastructure and social welfare projects, should be particularly supportive of infrastructure-related metals usage, the benefits of these policies are unlikely to be felt in the markets much before 2010.
Moreover in response to the exceptionally weak demand conditions, sizable production cuts have been made across the metals and much more are expected in 2009. However later in the year with easing of credit crunch coupled with some stabilization in demand we could see a recovery in all metals.
ENERGY COMPLEX: Bottom is near, Rally is Imminent.
While perception of strong and sustained oil demand from China, India and other rapidly developing countries along with the much hyped fear of rapidly depleting known Oil reserves helped propel WTI crude oil prices to over $145/bbl in the first half of 2008, the dramatic collapse in world oil demand in the fourth quarter of 2008 as the global credit crunch intensified now threatens to push oil prices below $30/bbl in the near term.
The increasing likelihood of a prolonged global economic downturn continues to dominate market perceptions, putting downward pressure on oil prices. Oil demand growth in the United States and in OECD countries has fallen to recessionary levels in 2008, with US total petroleum demand currently down around 6.1% YoY. While oil demand estimates in China and the non-OECD countries have shown continued growth, recent economic indicators suggest that demand growth in these
countries is on the cusp of a sharp deceleration.
We tend to favor a rise in crude oil prices due to potential supply destruction if there is protracted recession. However if there are signs of global recovery, then too we favor a rise in crude oil prices as we believe the recovery in global economy will bring with it a sustained and stable demand from the developing world. We strongly feel the energy pack is likely to lead a rally of the entire commodity sector.
AGRICULTURE: Longer Term Bullish…
The Agricultural commodity complex with no exception saw weakening prices along with other commodities. One of the important factors for the fall in prices was the falling energy prices and also the weakness seen in the global economy during 2008, which still persist.
Energy has by far been the driving factor for the appreciation of prices in this complex mainly due to increase in the demand for bio fuels when energy prices were said to be skyrocketing. In true sense agricultural prices have managed to stay buoyant in times of global economic weakness, for instance during the recession period from Mar-Nov 2001 oil was down 29.62% followed by copper down 12.69%, while on the other hand looking at the agricultural complex corn only fell -3.70%, soybeans -2.74% and increase in demand for wheat saw prices appreciating around 5.53%.
But the scenario is different this time as agricultural commodities are linked to the energy complex considering the fact that biofuel demand constituted 29% of last 2 years of demand for corn, wheat sugar and vegetable oil. The correlation between fossil fuels and grains prices increased in the last five years and are expected to stay high in near future.
However downside though looks limited but still exists, as crop seasons come in near future the fight for acreages could possibly boost the demand for this complex and the picture is expected to be more clear hopefully around the 2nd half of 2009.
Source: CommTrendz Risk Management Services
Shippers Get an End-of-Year Bounce
Friday, 02 January 2009
Amid scarce trading, shipping stocks are finding buyers on the last day of the year. There isn’t any news to speak of, and the analyst community is also quiet, with nary a significant note published on the sector. Market strategists attribute the buying to short-term traders scooping up shares after a steady bout of tax-loss selling, in anticipation of an early bounce in 2009 as investors begin to look at potential values. The shipping stocks were soundly thrashed in 2008, with major issues like Dryships Inc. and Eagle Bulk Shipping losing 88% and 78%, respectively, on the year.
When stocks perform that badly, often investors will engage in a bit of late-year selling in order to book tax losses. The shippers hit a low point in late November, rebounded a bit in mid-December, and have been unloaded again in the last several days. “The prices are reflecting that the end-of-the-year tax selloff is over with and they’re expecting a bounce,” says Paul Foster, market strategist at Flyonthewall.com. “It’s a trading play they’re anticipating here.”
Shares of Dryships gained 16%, and the stock was the second most-actively traded issue on the Nasdaq Stock Market, trailing only the Nasdaq-100’s tracking shares. Eagle Bulk Shipping rose 12.7% and Overseas Shipping rose 3%. Mr. Foster says similar action can be seen in other names, such as Dow component Alcoa, which is up 3.8%, having come into Wednesday’s action down 71% in 2008.
The recent dive in the price of crude oil would auger for improved shipping demand, though the action in the Baltic Dry Index does not suggest this yet. “These stocks probably got overdone and people are looking for stocks that might get that January bounce,” says William Lefkowitz, chief options strategist at vFinance Investments. “They’re hoping come Friday there’s only buyers, and they jump on a couple of these and make 20% to 30% in a couple of days, and then leave and go on vacation for 11 months and 3 weeks.”
As adapted from Wall Street Journal
Australia plans to boost coal exports to China
Sydney: Australia's coal exporters are hoping to increase shipments to China in the new year, despite China's export oriented economy losing momentum for growth. Projections indicate Australia's coal exports to China will nevertheless be boosted by an estimated 11% to reach 40m tonnes, according to a current report by the Australian Bureau of Agricultural and Resource Economics (ABARE). The report indicates that, as the world economy slows down, international freight has declined sharply resulting in China's power plants and steelmakers opting for coal imports. Moreover a number of its small coal mines, which fall short of standards, have been ordered closed and some new ones from going into production. This also helps foster conditions for Australian coal miners to push coal into China, ABARE said.
Coal output up but most metals down in Indonesia in 2008
Indonesia, which has a globally significant mining sector, reports coal output rising in 2008, but most metals output fell due to low metals prices and technical problems at Freeport's Grasberg mine.
Posted: Tuesday , 30 Dec 2008
JAKARTA (Reuters) -
Indonesia's output of coal rose slightly this year, but production of other key commodities including copper and tin fell, the energy and mines minister said on Tuesday, amid a recent downturn in commodity prices.
Indonesia has some of the world's largest deposits of gold, nickel, tin, coal and copper, with several leading international mining firms, including Freeport-McMoran Copper&Gold (FCX.N), operating in the country.
Coal output in 2008 is estimated at 225 million tonnes, up just 3.7 percent from 217 million tonnes in 2007, the energy ministry said.
But copper output fell 27 percent to an estimated 580,950 tonne this year, from 797,400 tonnes last year.
"The decline in copper output was due to a production problem at Freeport," said Bambang Gatot Ariyono, director of mineral and coal enterprises at the energy ministry.
Tin output fell 13 percent to 79,210 tonnes this year, from 91,280 tonnes in 2007, while nickel-in-matte output fell 4.8 percent to 74,160 tonnes this year, from 77,930 tonnes in 2007.
Ariyono said overall investment in the mining sector rose to $1.6 billion in 2008, from $1.2 billion in 2007.
Indonesia's parliament passed a new law this month on coal and mining that promises more certainty for investors although it has stirred concern it may deter major new foreign investment.
Government officials expect the new law to boost revenue from the mining sector as Jakarta is keen to gain greater control of its natural resources. (Reporting by Muklis Ali; Writing by Aloysius Bhui; Editing by Sara Webb)
Genco Shipping & Trading Limited Takes Delivery of Capesize Newbuilding
Tuesday December 30, 8:15 am ET
Genco Hadrian Commences Long-Term Time Charter
NEW YORK, Dec. 30 /PRNewswire-FirstCall/ -- Genco Shipping & Trading Limited (NYSE: GNK - News) today announced that it has taken delivery of the Genco Hadrian, a 170,500 dwt Capesize newbuilding. The Genco Hadrian is the sixth vessel to be delivered to the Company under Genco's previously announced agreement on July 18, 2007 to acquire nine Capesize vessels from companies within the Metrostar Management Corporation group.
The Company has commenced a time charter upon delivery of the Genco Hadrian with Cargill International S.A., for 46 to 62 months at a gross rate of $65,000 per day, less a 5% third party brokerage commission. The charter, which is due to expire between October 2012 and February 2014, also includes a 50 percent index-based profit sharing component.
Genco has drawn upon its 10-year, $1.4 billion revolving credit facility to finance the remaining balance for the Genco Hadrian of $96.8 million. The Company expects the delivery of three additional newbuilding vessels by the end of 2009 and intends to utilize the undrawn portion of its $1.4 billion revolving credit facility as well as cash flow from operations to fund these acquisitions.
The following table reflects the current employment of Genco's current fleet as well as the employment or other status of vessels expected to join Genco's fleet:
Vessel Year Charterer Charter Cash Net Expected
Built Expiration Daily Revenue Delivery
(1) Rate (2) Daily (4)
Rate (3)
Capesize
Vessels
--------
Genco 2007 Cargill December 45,263 62,750 -
Augustus International 2009
S.A.
Genco 2007 Cargill January 45,263 62,750 -
Tiberius International 2010
S.A.
Genco
London 2007 SK Shipping August 57,500 64,250 -
Co., Ltd 2010
Genco
Titus 2007 Cargill September 45,000(5) 46,250 -
International 2011
S.A.
Genco 2008 Cargill August 52,750(5) -
Constantine International 2012
S.A.
Genco 2008 Cargill October 65,000(5) -
Hadrian International 2012
S.A.
Genco 2009(6) To be TBD TBD Q2 2009
Commodus determined
("TBD")
Genco
Maximus 2009(6) TBD TBD TBD Q2 2009
Genco
Claudius 2009(6) TBD TBD TBD Q3 2009
Panamax
Vessels
--------
Genco
Beauty 1999 Cargill May 31,500 -
International 2009
S.A.
Genco
Knight 1999 SK Shipping May
Ltd. 2009 37,700 -
Genco
Leader 1999 Baumarine November Spot(7) -
AS 2009
Genco
Vigour 1999 STX Panocean March 29,000(8) -
(UK)Co. Ltd. 2009
Genco 1999 Global
Acheron Chartering July 55,250(9) -
Ltd 2011
(a subsidiary
of ArcelorMittal
Group)
Genco 1998 Hanjin December 42,100 -
Surprise Shipping 2010
Co., Ltd.
Genco
Raptor 2007 COSCO Bulk April 52,800 -
Carriers 2012
Co., Ltd.
Genco 2007 Baumarine AS October Spot(10) -
Thunder 2009
Supramax
Vessels
--------
Genco 2005 Bulkhandling September Spot(11) -
Predator Handymax 2009
A/S
Genco 2005 Hyundai
Warrior Merchant November 38,750 -
Marine Co. 2010
Ltd.
Genco
Hunter 2007 Pacific June 62,000(12) -
Basin 2009
Chartering
Ltd.
Genco 2007 Samsun Logix July 48,500(13) 47,700 -
Cavalier Corporation 2010
Handymax
Vessels
--------
Genco 1997 Korea Line February 33,000(14) -
Success Corporation 2011
Genco 1998 Louis
Carrier Dreyfus March 37,000 -
Corporation 2011
Genco 1997 Pacific June 37,000(15) -
Prosperity Basin 2011
Chartering
Ltd
Genco
Wisdom 1997 Hyundai February 34,500 -
Merchant 2011
Marine Co.
Ltd.
Genco
Marine 1996 NYK March 47,000 -
Bulkship 2009
Europe
S.A.
Genco
Muse 2001 Norden A/S October 47,650 -
2008
AMN
Bulkcarriers January 30,000(16) -
INC 2009
Handysize
Vessels
---------
Genco 1999 Lauritzen August 19,500 -
Explorer Bulkers A/S 2009
Genco 1999 Lauritzen August 19,500 -
Pioneer Bulkers A/S 2009
Genco 1999 Lauritzen August 19,500 -
Progress Bulkers A/S 2009
Genco 1999 Lauritzen August 19,500 -
Reliance Bulkers A/S 2009
Genco
Sugar 1998 Lauritzen August 19,500 -
Bulkers A/S 2009
Genco 2005 Pacific November 24,000 -
Charger Basin 2010
Chartering Ltd.
Genco 2003 Pacific November 24,000 -Challenger Basin 2010
Chartering
Ltd.
Genco 2006 Pacific December 24,000 -
Champion Basin 2010
Chartering
Ltd.
(1) The charter expiration dates presented represent the earliest dates that our charters may be terminated in the ordinary course. Except for the Genco Titus, under the terms of each contract, the charterer is entitled to extend time charters from two to four months in order to complete the vessel's final voyage plus any time the vessel has been off-hire. The charterer of the Genco Titus has the option to extend the charter for a period of one year.
(2) Time charter rates presented are the gross daily charterhire rates before third party commissions ranging from 1.25% to 6.25%, except as indicated for the Genco Leader in note 7 below. In a time charter, the charterer is responsible for voyage expenses such as bunkers, port expenses, agents' fees and canal dues.
(3) For the vessels acquired with a below-market time charter rate, the approximate amount of revenue on a daily basis to be recognized as revenues is displayed in the column named "Net Revenue Daily Rate" and is net of any third-party commissions. Since these vessels were acquired with existing time charters with below-market rates, we allocated the purchase price between the respective vessel and an intangible liability for the value assigned to the below-market charterhire. This intangible liability is amortized as an increase to voyage revenues over the minimum remaining term of the charter. For cash flow purposes, we will continue to receive the rate presented in the "Cash Daily Rate" column until the charter expires.
(4) Dates for vessels being delivered in the future are estimates based on guidance received from the sellers and/or the respective shipyards.
(5) These charters include a 50% index-based profit sharing component above the respective base rates listed in the table. The profit sharing between the charterer and us for each 15-day period is calculated by taking the average over that period of the published Baltic Cape Index of the four time charter routes, as reflected in daily reports. If such average is more than the base rate payable under the charter, the excess amount is allocable 50% to each of the charterer and us. A third-party brokerage commission of 3.75% based on the profit sharing amount due to us is payable out of our share.
(6) Year built for vessels being delivered in the future are estimates based on guidance received from the sellers and/or the respective shipyards.
(7) We have reached an agreement to enter the vessel into the Baumarine Pool with an option to convert the balance period of the charter party to a fixed rate, but only after June 1, 2009. The vessel entered the pool following the completion of its previous time charter on December 16, 2008. In addition to a 1.25% third party brokerage commission, the charter party calls for a management fee which consists of a 1.25% deduction as well as a $334 fixed daily management fee.
(8) We have entered into a time charter for 23 to 25 months at a rate of $33,000 per day for the first 11 months, $25,000 per day for the following 11 months and $29,000 per day thereafter, less a 5% third-party commission. For purposes of revenue recognition, the time charter contract is reflected on a straight-line basis at approximately $29,000 per day for 23 to 25 months in accordance with generally accepted accounting principles in the United States, or U.S. GAAP.
(9) We have entered into a time charter agreement with ArcelorMittal for 35 to 37 months at a rate of $55,250 per day less a 5% third-party commission. The vessel is currently in drydocking and is expected to deliver to its new charterer on or about August 1, 2008.
(10) We have reached an agreement to enter the vessel into the Baumarine Pool with an option to convert the balance period of the charter party to a fixed rate, but only after March 1, 2009. The vessel entered the pool following the completion of its previous time charter on November 16, 2008. In addition to a 1.25% third party brokerage commission, the charter party calls for a management fee which consists of a 1.25% deduction as well as a $334 fixed daily management fee.
(11) We have entered into a short-term time charter with A/S Klaveness Chartering for 3 to 5 months at a rate of $58,000 per day less a 5% third-party commission. The charter is expected to be completed on or about October 31, 2008. Following the expiration of this charter we have entered the vessel into the Bulkhandling Handymax Pool with an option to convert the balance period of the charter party to a fixed rate, but only after January 1, 2009.
(12) We have reached an agreement to extend the time charter with Pacific Basin Chartering Ltd. for 11 to 13.5 months at a rate of $62,000 per day, less a 5% third party brokerage commission. The time charter commenced following the expiration of the vessel's prior time charter on July 21, 2008.
(13) The time charter for this vessel commenced on July 19, 2008. In completing the negotiation of certain changes we required for novation of the existing charter, we agreed to reduce the daily gross rate and received a rebate from the brokers involved in the vessel sale. Since the vessel was acquired with a below-market rate, we allocated the purchase price between the vessel and an intangible liability for the value assigned to the below-market charterhire.
(14) We extended the time charter for an additional 35 to 37.5 months at a rate of $40,000 per day for the first 12 months, $33,000 per day for the following 12 months, $26,000 per day for the next 12 months and $33,000 per day thereafter less a 5% third-party commission. In all cases, the rate for the duration of the time charter will average $33,000 per day. For purposes of revenue recognition, the time charter contract is reflected on a straight-line basis at approximately $33,000 per day for 35 to 37.5 months in accordance with U.S. GAAP.
(15) We recently extended the time charter for an additional 35 to 37.5 months at a rate of $37,000 per day less a 5% third-party commission. The new charter commenced on July 10, 2008, following the expiration of the previous charter.
(16) We have entered into a time charter agreement with AMN Bulkcarriers Inc. for 3 to 5 months at a rate of $30,000 per day less a 5% third-party commission. The new charter commenced on October 5, 2008, following the expiration of the previous charter.
About Genco Shipping & Trading Limited
Genco Shipping & Trading Limited transports iron ore, coal, grain, steel products and other drybulk cargoes along worldwide shipping routes. Genco Shipping & Trading Limited currently owns a fleet of 32 drybulk vessels consisting of six Capesize, eight Panamax, four Supramax, six Handymax and eight Handysize vessels, with an aggregate carrying capacity of approximately 2,397,000 dwt. After the expected delivery of three vessels the Company has agreed to acquire, Genco Shipping & Trading Limited will own a fleet of 35 drybulk vessels, consisting of nine Capesize, eight Panamax, four Supramax, six Handymax and eight Handysize vessels, with an aggregate carrying capacity of approximately 2,909,000 dwt.
"Safe Harbor" Statement Under the Private Securities Litigation Reform Act of 1995
This press release contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward looking statements are based on management's current expectations and observations. Included among the factors that, in our view, could cause actual results to differ materially from the forward looking statements contained in this press release are (i) changes in demand or rates in the drybulk shipping industry; (ii) changes in the supply of or demand for drybulk products, generally or in particular regions; (iii) changes in the supply of drybulk carriers including newbuilding of vessels or lower than anticipated scrapping of older vessels; (iv) changes in rules and regulations applicable to the cargo industry, including, without limitation, legislation adopted by international organizations or by individual countries and actions taken by regulatory authorities; (v) increases in costs and expenses including but not limited to: crew wages, insurance, provisions, repairs, maintenance and general and administrative expenses; (vi) the adequacy of our insurance arrangements; (vii) changes in general domestic and international political conditions; (viii) changes in the condition of the Company's vessels or applicable maintenance or regulatory standards (which may affect, among other things, our anticipated drydocking or maintenance and repair costs) and unanticipated drydock expenditures; (ix) the number of offhire days needed to complete repairs on vessels and the timing and amount of any reimbursement by our insurance carriers for insurance claims including offhire days; (x) the Company's acquisition or disposition of vessels; (xi) the fulfillment of the closing conditions under, or the execution of customary additional documentation for, the Company's agreements to acquire a total of three remaining drybulk vessels; and other factors listed from time to time in our public filings with the Securities and Exchange Commission including, without limitation, our Annual Report on Form 10-K for the year ended December 31, 2007, and our subsequent reports on Form 10-Q and Form 8-K.
Source: Genco Shipping & Trading Limited
TNT Dry Freight Review - 2 January 2009
PANAMAX
=======
Brokers said they were working "as usual" to keep on top of all the problems involved with shipping. Ships were still sailing, they just weren't being fixed, said one broker. Not surprisingly, there was little new business to report. Most of the fixing was done before the holidays, and was either already reported or is just being reported now.
The Angela Star, 74,000dwt, 1998, was taken by Cargill for a trip Skaw to FOS for $7,000 daily.
Cargill also took the Great Eagle, 74,000dwt, 2005, for delivery to Tilbury, redelivery to UKC for $4,000 per day.
Uniwell took two ships, the Cumbria and the Golden Joy, both 70,000dwt and both 1994-built, for Delivery to Hong Kong and redelivery to China, for 2,750$ per day for each ship.
Suek took the Alkaios, 66,000dwt, 1985 for $4,000 daily for a round trip to Murmansk.
CAPESIZE
========
Most of the business reported was either already reported during the Christmas/New Year holiday or was not reported during that period.
There was not enough business to determine if the market is ready to return in the new year. Monday will be the first real test.
The Alpha Action, 151,000dwt, 1994-built, was taken by Noble Chartering for a round trip to Japan, for $10,500 daily.
Noble Chartering may have taken the Zosco Zhoushan, 140,000dwt, 1994-built, for an iron ore dry cargo from India to China for 6.00 FIO; 20000t/20000t, but this is unconfirmed.
HANDY/SUPRAMAX
==============
The last day of the exteded holiday brought little activity to a stable but poor market.
The Star Cosmo, 52,000dwt, 2005-built, went for a trip from Skaw to FOS for $7,000 per day, but the charterer can't be reported.
Cargill took the Lowlands Patreasche, 59,000dwt, 2007 for January delivery to Tampa for a trip to India for $8,250 daily.
Baltic Exchange Daily Summary of Baltic Exchange Dry Indices - 2 January 2009
Baltic Exchange Dry Index 773 (DOWN 1)
Baltic Exchange Capesize Index 1361 (UP 24)
Baltic Exchange Panamax Index 540 (DOWN 18)
Baltic Exchange Supramax Index 411 (DOWN 10)
Baltic Exchange Handysize Index 279 (DOWN 2)
Daily Summary of the Baltic Exchange Time Charter Routes
Rate($/Day) Change BCI
Average of the T/C routes $8997 (UP 108)
BPI
Average of the T/C routes $4326 (DOWN 150)
BSI
Average of the T/C routes $4295 (DOWN 110)
BHSI
Average of the T/C routes $4096 (DOWN 17)
Baltic Exchange Capesize Index TM - 2 January 2009
Baltic Exchange Capesize Index 1361 (UP 24)
Rte
Num Description Weight Avg.
Move
====== =============================================== ====== ====== =====
C2 160000lt Tubarao -Rotterdam 10 5.195
0.070
C3 150000mt Tubarao - Beilun/Baoshan 15 9.104
0.254
C4 150000mt Richards Bay - Rotterdam 5 6.250
0.055
C5 150000mt W Australia - Beilun/Baoshan 15 5.655
0.155
C7 150000mt Bolivar - Rotterdam 5 5.559
0.049
C8_03 172000mt Gibraltar/Hamburg trans Atlantic RV 10 6814
-66
C9_03 172000mt Continent/Mediterranean trip Far East 5 11654
304
C10_03 172000mt Pacific RV 20 11288
234
C11_03 172000mt China/Japan trip Mediterranean/Cont 5 6233
-40
C12 150000mt Gladstone - Rotterdam 10 10.350
0.061
Average of the T/C Routes 8997
108
Baltic Exchange Panamax Index TM - 2 January 2009
Baltic Exchange Panamax Index 540 (DOWN 18)
Rte
Num Description Weight Avg. Move
====== ============================== ====== ==== ====
P1A_03 74000mt Transatlantic RV 25 4531 73
P2A_03 74000mt SKAW-GIB/FAR EAST 25 7808 -235
P3A_03 74000mt Japan-SK/Pacific/RV 25 2667 -246
P4_03 74000mt FAR EAST/NOPAC/SK-PASS 25 2297 -193
Average of the T/C Routes 4326 -150
Baltic Exchange Supramax Index TM - 2 January 2009
Baltic Exchange Supramax Index 411 (DOWN 10)
Rte
Num Description Weight Avg. Move
=== ================================== ====== ==== ====
S1A Antwerp - Skaw Trip Far East 12.5 5479 -135
S1B Canakkale Trip Far East 12.5 5638 -75
S2 Japan - SK / NOPAC or Australia rv 25 3872 -73
S3 Japan - SK Trip Gib - Skaw range 25 3936 -35
S4A US Gulf - Skaw-Passero 12.5 5425 -368
S4B Skaw-Passero - US Gulf 12.5 2206 -80
Average of the T/C Routes 4295 -110
The route(s) below do not form part of the index calculation
S5 W.Africa via ECSA to FarEast 0 5736 -93
S6 Jpn-SK trip via Aus/India 0 3956 -19
S7 EC India - China 0 9440 -500
Baltic Exchange Handysize Index TM - 2 January 2009
Baltic Exchange Handysize Index 279 (DOWN 2)
Rte
Num Description Weight Avg.
Move
=== ================================================== ====== ==== ====
HS1 Skaw - Passero trip Recalada - Rio de Janeiro 12.5 3229 -4
HS2 Skaw - Passero trip Boston / Galveston 12.5 3307 -18
HS3 Recalada / Rio de Janeiro trip Skaw / Passero. 12.5 6250 150
HS4 US Gulf trip via US Gulf or NCSA to Skaw / Passero 12.5 5283 -84
HS5 SE Asia trip via Australia to S'pore / Japan 25 3700 -31
HS6 S Korea / Japan via NOPAC to S'pore-Japan 25 3650 -57
Average of the T/C Routes 4096 -17
* TIME CHARTER FIXTURES - 2 January 2009 *
*** PLEASE NOTE: FIXTURES HERE ARE REPORTED FIXED FROM DECEMBER 22 TO JANUARY 1
----------------------------------------------
GOOD NEWS 1982 138484 TCT
DWT
DEL WC INDIA, PPT, TRIP, REDEL CHINA
$6000 DAILY + $275000 BB NOBLE
----------------------------------------------
ORANGE TRUTH 2006 82962 DWT TCT
DEL JOHOR BAHRU, SPOT, TRIP VIA INDONESIA, REDEL SINGAPORE-JAPAN RGE
$5000 DAILY CNR
FIXED LAST WEEK
----------------------------------------------
GIUSEPPE RIZZO 2004 COSCO 77684 DWT TCT
EUROPE RELET
DEL IMMINGHAM, JAN 8/14, 1/2 LADEN LEGS, REDEL SKAW-CAPE PASSERO
$5500 DAILY CARGILL
FIXED EARLIER THIS WEEK
----------------------------------------------
MEDI TAIPEI 2003 76633 DWT TCT
DEL QINGDAO, SPOT, TRIP VIA AUSTRALIA, REDEL SINGAPORE-JAPAN RGE
$2000 DAILY DAEBO
FIXED 30/12
----------------------------------------------
NORD GALAXY 2006 76500 DWT TCT
DEL MAILIAO, JAN 4/8, TRIP VIA INDONESIA, REDEL TAIWAN
$2400 DAILY GRAND CHINA SHIPPING
----------------------------------------------
ELLY 1999 74000 DWT TCT
DEL MINA SAQR, SPOT, TRIP VIA AL JUBAIL, REDEL WC INDIA
$5000 DAILY GREAT EASTERN
----------------------------------------------
ALKAIOS 1985 66234 DWT TCT
DEL BRIXHAM, SPOT, TRIP VIA MURMANSK, REDEL UKC
$4000 DAILY SUEK
FIXED LAST WEEK
----------------------------------------------
LOWLANDS PATRASCHE 2007 58790 DWT TCT
DEL APS TAMPA, EARLY JANUARY, TRIP, REDEL INDIA
APPROX $8250 DAILY CARGILL
----------------------------------------------
GENCO WISDOM 1997 HMM RELET 47000 DWT TCT
DEL USGULF, EARLY JANUARY, TRIP, REDEL SPAIN
$4000 DAILY ARMADA
----------------------------------------------
BROTHER GLORY 1998 46211 DWT TCT
DEL SOUTH WEST PASS, JAN 2/3, TRIP, REDEL BUENAVENTURA
$7500 DAILY BUNGE
** DRY VOYAGE FIXTURES - 2 January 2009 **
*** PLEASE NOTE: FIXTURES HERE ARE REPORTED FIXED FROM DECEMBER 23 TO JANUARY 1
========= ORE =======
------------------------------------------------------
CIC CAPTAIN VENIAMIS 2001 160000/10 ORE
PORT HEDLAND TO QINGDAO, 3/9 JAN
$5.90 FIO SCALE/30000SC BHP BILLITON
RECENT
------------------------------------------------------
PASCHALIS D 2002 160000/10 ORE
PORT HEDLAND TO QINGDAOO, 1/15 JAN
APPROX $5.95 FIO SCALE/30000SC BHP BILLITON
RECENT
------------------------------------------------------
ALPHA CENTURY 2000 160000/10 ORE
PORT HEDLAND TO QINGDAO, 15/25 JAN
$5.90 FIO SCALE/30000SC BHP BILLITON
FIXED
------------------------------------------------------
PITSA D 2002 160000/10 ORE
PORT HEDLAND TO QINGDAO, 1/15 JAN
APPROX $5.95 FIO SCALE/30000SC BHP BILLITON
RECENT
------------------------------------------------------
SEALINK PROSPERITY 1984 160000/10 ORE
LESS VISAKHAPATNAM TO QINGDAO, 10/15 JAN
$4.75 BASIS 3.75% FIO 40000SC/30000SC NOBLE CHARTERING
------------------------------------------------------
COSCO TBN 150000/10 ORE
PORT HEDLAND TO QINGDAO, 1/11 JAN
APPROX $5.90 FIO SCALE/30000SC BHP BILLITON
------------------------------------------------------
SALT LAKE CITY 2005 NCS RELET 150000/10 ORE
WEST AUSTRALIA TO QINGDAO, 6/15 JAN
$5.20 FIO SCALE/30000SC SHAGANG
RECENT
Thursday, January 01, 2009
Weyerhaeuser takes 7 Westwood vessels off market
Tuesday, 30 December 2008
Forest products supplier Weyerhaeuser Co. said Monday it has stopped trying to sell its seven ocean-going freighters, citing tight financial markets and weak demand for their maritime shipping services. The vessels, which Weyerhaeuser said in May it wanted to sell, are part of the company's Westwood Shipping Line unit and transport forest products between North America and Asian business partners in Japan, Korea and China. Weyerhaeuser still plans to sell Westwood Shipping four regional short-line railroads. Those rails are used primarily to supply U.S. mills, though third-party customers sometimes use them to transport grain and paper products, spokesman Bruce Amundson said.
Although Weyerhaeuser will continue to own and sail its ships, the company still aims to sell its four railroads.
Shipping demand has fallen off dramatically in recent months, as the economy weakened and tight credit kept some shippers from moving freight altogether. However, railroads have been less affected by the slowdown in freight hauling because of stronger demand in commodities, including coal and chemicals, and an ability to fetch higher prices.
"We did not feel that the current market conditions would allow us to recognize a reasonable value for our assets and operations," Guy Stephenson, Westwood Shipping Line president, said in a statement.
Shares of Weyerhaeuser fell 92 cents, or 3 percent, to $29.64 in afternoon trading.
Chinese crude stainless steel output in 2008
According to a forecast made recently by an executive of China Metal Materials Trade Association, the output of crude stainless steel in China for January to December 2008 period is supposed to come to 7.1 million tonnes with a decline of 6.6% from that for the preceding year of 2007. A scale of crude stainless steel to be produced in China for 2008 was expected at the beginning of the year to reach 8.3 million tons per annum but is now anticipated to decrease considerably.
However, according to the data compiled in spring of this year by China Special Steel Producers Association, the output of crude stainless steel in China for the calendar year of 2007 was estimated at 7.21 million tons, consisting of 300 series products with 4.19 million tonnes, 400 series products with 1.84 million tonnes and 200 series products with 1.18 million tonnes.
The quantities of crude stainless steel produced in China for each quarter of 2008 are supposed to be
1. January to March quarter: 1.97 million tonnes
2. April to June quarter: 1.89 million tonnes
3. July to September quarter: 1.65 million tonnes
However, the production activities of crude stainless steel in China for October to December quarter of 2008 have strengthened a basic tone to decrease further. The production of stainless steel in China had expanded amazingly in the past years and it is thought that China produced 5.3 million tonnes of crude stainless steel in 2006 and 7.50 million tonnes in 2007.
(Sourced from TEX Report)