Tuesday, May 05, 2009
Asian nations set up $120 billion crisis fund
Hong Kong: Thirteen East and Southeast Asian countries agreed yesterday to set up an emergency $120 billion fund to provide liquidity to any of them in need of help during the economic downturn, reports Reuters. Japan also unveiled a scheme to supply up to 6 trillion yen ($61.54 billion) to support nations hit by economic crisis.
The moves were announced on the sidelines of the Asian Development Bank's annual meeting on the Indonesian island of Bali. Under the plan, China and Japan would each contribute 32% to the regional fund, known as the Chiang Mai Initiative. South Korea would provide 16% while the rest would come from the 10-member Association of South East Asian Nations (ASEAN).
The fund is due to be launched before year-end and will give emergency balance of payments support in case any of the countries experienced the kind of capital flight that marked the Asian financial crisis of 1997/98.
"The current global situation requires more concerted efforts to enhance confidence, maintain financial stability, and prevent further decline in economic growth," a joint statement by the region's finance ministers said.
"The deepening global economic downturn, coupled with heightened risk aversion in financial markets, (has) adversely impacted trade and investment in the region."
The ADB has forecast that Asian economies will grow only 3.4 percent in 2009, the slowest pace since the Asian financial crisis a decade earlier. It sees growth recovering to 6.3 percent next year. [04/05/09]
Cory Brothers opens regional hub in Singapore
Singapore: UK-based Cory Brothers, part of the Braemar shipbroking group, has opened a South east Asai hub here to cater for its growing range of ship agency and freight services in the region.
Based on Middle Road, the new office will provide a wide range of shipping and agency services to ship owners, operators and charterers of all vessel types, including drydocking, crew change arrangements and stevedoring.
“All our Singapore services are linked to Cory Brothers’ unique, in-house ‘Ship-Trak’ software which enables us to provide transparent and live tracking of vessel movement and cargo status,” says Keith Lee, director of Cory Brothers Shipping Singapore.
Separately, the company has opened new offices back in the UK, Felixstowe, primarily intended to offer improved freight forwarding services following its acquisition of Freight Action Ltd at the end of 2008.
Cory Brothers, which began operations in Wales in 1842, provides a wide range of port, hub, liner, cruise and forwarding services from its bases throughout the UK and internationally. The company “continues to go from strength to strength”, Braemar chairman Alan Marsh said at the Felixstowe office opening, adding: “marine service business divisions… now represent a growing percentage of the group’s profitability”. [04/05/09]
Monday, May 04, 2009
Baltic Exchange Daily Summary of Baltic Exchange Dry Indices - 1 May 2009
Baltic Exchange Dry Index 1806 (UP 20)
Baltic Exchange Capesize Index 2376 (UP 28)
Baltic Exchange Panamax Index 1556 (UP 33)
Baltic Exchange Supramax Index 1430 (UP 3)
Baltic Exchange Handysize Index 694 (UP 1)
Daily Summary of the Baltic Exchange Time Charter Routes
Rate($/Day) Change
BCI
Average of the T/C routes $22094 (UP 387)
BPI
Average of the T/C routes $12487 (UP 262)
BSI
Average of the T/C routes $14957 (UP 31)
BHSI
Average of the T/C routes $9928 (UP 12)
<<>>
Baltic Exchange Capesize Index TM - 1 May 2009
Baltic Exchange Capesize Index 2376 (UP 28)
Rte
Num Description Weight Avg. Move
====== =============================================== ====== ====== =====
C2 160000lt Tubarao -Rotterdam 10 9.027 0.041
C3 150000mt Tubarao - Beilun/Baoshan 15 18.728 0.282
C4 150000mt Richards Bay - Rotterdam 5 8.022 0.040
C5 150000mt W Australia - Beilun/Baoshan 15 7.172 0.054
C7 150000mt Bolivar - Rotterdam 5 9.494 0.071
C8_03 172000mt Gibraltar/Hamburg trans Atlantic RV 10 21806 306
C9_03 172000mt Continent/Mediterranean trip Far East 5 37178 843
C10_03 172000mt Pacific RV 20 19178 243
C11_03 172000mt China/Japan trip Mediterranean/Cont 5 10217 159
C12 150000mt Gladstone - Rotterdam 10 12.214 0.124
Average of the T/C Routes 22094 387
<<>>
Baltic Exchange Panamax Index TM - 1 May 2009
Baltic Exchange Panamax Index 1556 (UP 33)
Rte
Num Description Weight Avg. Move
====== ============================== ====== ===== ====
P1A_03 74000mt Transatlantic RV 25 12591 436
P2A_03 74000mt SKAW-GIB/FAR EAST 25 20407 312
P3A_03 74000mt Japan-SK/Pacific/RV 25 10741 195
P4_03 74000mt FAR EAST/NOPAC/SK-PASS 25 6210 105
Average of the T/C Routes 12487 262
<<>>
Baltic Exchange Supramax Index TM - 1 May 2009
Baltic Exchange Supramax Index 1430 (UP 3)
Rte
Num Description Weight Avg. Move
=== ================================== ====== ===== ====
S1A Antwerp - Skaw Trip Far East 12.5 23603 81
S1B Canakkale Trip Far East 12.5 26290 157
S2 Japan - SK / NOPAC or Australia rv 25 10764 -119
S3 Japan - SK Trip Gib - Skaw range 25 6516 -134
S4A US Gulf - Skaw-Passero 12.5 25872 483
S4B Skaw-Passero - US Gulf 12.5 9333 39
Average of the T/C Routes 14957 31
The route(s) below do not form part of the index calculation
S5 W.Africa via ECSA to FarEast 0 23672 -139
S6 Jpn-SK trip via Aus/India 0 11167 -178
S7 EC India - China 0 11991 -126
<<>>
Baltic Exchange Handysize Index TM - 1 May 2009
Baltic Exchange Handysize Index 694 (UP 1)
Rte
Num Description Weight Avg. Move
=== ================================================== ====== ===== ====
HS1 Skaw - Passero trip Recalada - Rio de Janeiro 12.5 9743 36
HS2 Skaw - Passero trip Boston / Galveston 12.5 9636 -14
HS3 Recalada / Rio de Janeiro trip Skaw / Passero. 12.5 15950 -6
HS4 US Gulf trip via US Gulf or NCSA to Skaw / Passero 12.5 16256 28
HS5 SE Asia trip via Australia to S'pore / Japan 25 7421 15
HS6 S Korea / Japan via NOPAC to S'pore-Japan 25 6500 14
Average of the T/C Routes 9928 12
<<>>
Baltic Exchange Daily Fixture/Index List 01/05/2009
BDI 1806 (UP 20) BCI 2376 (UP 28) BPI 1556 (UP 33)
BSI 1430 (UP 3) BHSI 694 (UP 1)
Last published BDTI 477 (DOWN 3) BCTI 403 (UP 8)
TIMECHARTER
United Treasure' 2006 82926 dwt dely Tsuneishi 2/4 May trip via EC Australia redel Singapore-Japan rge $11500 daily - Oldendorff
'Iron Fuzeyya' GMI relet 2006 82769 dwt dely Antwerp 6/10 May trip via Kotka redel Singapore-Japan $26000 daily - Michele Bottiglieri
'Yuitai Ambitions' 2008 76500 dwt dely Mundra 7/12 May trip via S. Brazil redel Skaw-Cape Passero $7500 daily - Cargill
'Grand Victoria' 2002 75971 dwt dely Jianyang 6/10 May trip via Indonesia redel India $11500 daily - OBS
'Medi Gagliari' 2004 75767 dwt dely Kaohsiung 3/6 May trip via EC Australia redel China $11500 daily - BHP Billiton
'Maritime Hareshio' 2006 75740 dwt dely Qingdao 7/10 May trip via EC Australia redel China $11000 daily - cnr
'Imperial' 2007 75510 dwt dely Gangavaram 3/8 May trip via EC India redel China $17000 daily - Jaldhi
'Pasquale Della Gatta' 1996 75473 dwt dely Rizhao 4/6 May trip via EC Australia redel Singapore-Japan rge $10000 daily - STX Pan Ocean
'Tian Bai Feng' 2000 74271 dwt dely Colombo ppt trip via EC South America option Richards Bay redel India $14000 - Oldendorff
'Diamond Seas' 2001 74247 dwt dely Dalian in d/c 3/5 May trip via EC South America redel Singapore-Japan rge $11000 daily - Louis Dreyfus
'Darya Radhe' 1999 73705 dwt dely Mylaki spot 2 laden legs redel Skaw-Cape Passero $14500 daily - Pratica
'Ju Da' 2005 73600 dwt dely Bin Qasim 8/12 May trip via EC South America redel Singapore-Japan rge $17000 daily - cnr
'Baniyas' 2001 72562 dwt dely Kwinana 12/14 May trip via Geraldton redel China $10000 daily - cnr
'Mass Glory' 1993 69555 dwt dely Barcelona 5/10 May trip via US Gulf redel China $20000 daily - Noble
'Medi Imabari' 2008 56047 dwt dely dop Magdalla 4/12 May trip via East Coast South America redel PMO-Japan $13000 daily - Cargill
'Yasa H.Mehmet 2001 52407 dwt dely Lagos 5/10 May trip via North Brazil and Bahrein redel PMO approx $21500 daily - GMI
'Prabhu Jivesh' 2002 50956 dwt dely Paradip 3/8 May trip via East Coast South America redel PMO-Japan $12000 daily - Cargill
'Amazing Grace' 1998 47243 dwt dely aps Santos early May trip via PG-South east Asia redel passing Durban $15500 daily - Cargill
'Valdivia' 2003 35200 dwt dely USGulf 2/3 May trip redel UKCont-Med approx $21000 daily - Eitzen
'Atlantic Arrow' 2005 28653 dwt dely Douala 8/10 May trip via ECSouth America redel Matarani-Buenaventura rge $9250 daily - Clipper
PERIOD
'Crest Trader' 2006 76500 dwt dely Skaw-Cape Passero 5/15 May 2 years trading redel worldwide $14000 daily - Cosbulk - <fixed last week>
'Ocean Lyra' 2005 75656 dwt dely Surabaya 12/15 May 3/5 months trading redel worldwide $12500 daily - CTP
'JJ Ugland TBN' 2009 58000 dwt dely ex Yard Far East May 2009 12 months trading redel worldwide $14250 daily - TMT
COAL
'TMT TBN' 150000/10 Porto Drummond/Rotterdam 16/25 May $10.40 fio 40000sc/25000sc - Vitol
'MOSK TBN' 150000/10 Richards Bay/Rotterdam 15/29 May $7.95 fio scale/25000sc - Cargill
TNT Dry Freight Review - May 01, 2009
PANAMAX
=======
Panamax business trended sideways into the long weekend, with sources reporting
very limited activity from either basin. In the Atlantic, a shorter list of
available tonnage raised hopes that fresh inquiry next week could improve rates.
A trip out from Barcelona via the US Gulf was reported done at $20,000 daily.
For the Pacific, backhaul business was said done with 2 laden legs and
redelivery Skaw-Cape Passero at $14,500 daily. Far East/EC Australia rounds
appeared steady in the region of $11,500 daily. Modern tonnage fixed a Far
East/ECSA round at $11,000 and $10,000 daily respectively. Short period
business of 3-5 months trading was heard fixed at a decent $12,500 daily. The
Baltic Panamax index rose 33 to 1556.
From the Atlantic, Noble agreed $20,000 daily for the 1993-built 69,555 dwt Mass
Glory with May 05-10 delivery Barcelona for a trip via the U.S. Gulf and
redelivery China.
Oldendorff was linked with the 2000-built 74,271 dwt Tian Bai Feng with prompt
delivery Colombo for a trip via east coast South America option Richards Bay,
with redelivery India at $14,000.
An unnamed charterer fixed the 2008-built 77,171 dwt Nord Mercury with May 05-08
delivery Taiwan for a trip via east coast South America and redelivery
Singapore/Japan range at $13,000 daily.
Voyage business heard that TTMI was the charterer of the 1992-built 72,329 dwt
Seapowet with May 10-20 loading 70,000 tons 10% coal from Mobile to Immingham at
$13.00.
In period business, it emerged that the 2006-built 76,500 dwt Crest Trader fixed
to Cosbulk last week with May 05-15 delivery Skaw-Cape Passero for 2-years
trading and redelivery worldwide at $14,000 daily.
Out of the Pacific, Pratica was the charterer of the 1999-built 73,705 dwt Darya
Radhe with spot delivery Mylaki for a trip with 2 laden legs and redelivery
Skaw-Cape Passero at $14,500 daily.
Oldendorff has taken the 2006-built 82,926 dwt United Treasure with May 02-04
delivery Tsuneishi for a trip via east coast Australia with redelivery
Singapore-Japan range at $11,500 daily.
OBS was the charterer of the 2002-built 75,971 dwt Grand Victoria with May 04-05
delivery Shanghai for a trip via Indonesia and redelivery India at $11,500 daily.
The 2004-built 75,767 dwt Medi Cagliari will earn $11,500 daily from BHP
Billiton for May 03-06 delivery Kaohsiung on a trip via east coast Australia and
redelivery China at $11,500 daily.
The 2001-built 72,427 dwt Diamond Seas went to Louis Dreyfus with May 03-05
delivery Dalian in d/c for a trip via east coast South America with redelivery
Singapore-Japan range at $11,000 daily.
The 2006-built 75,740 dwt Maritime Hareshio fixed to an undisclosed charterer
with May 07-10 delivery Qingdao for a trip via east coast Australia and
redelivery China at $11,000 daily.
The 2001-built 72,562 dwt Baniyas was reported fixed to an unnamed charterer
with May 12-14 delivery Kwinana for a trip via Geraldton and redelivery China at
$10,000 daily.
It emerged that the 1996-built 75,473 dwt Pasquale Della Gatta went to STX Pan
Ocean earlier this week with May 04-06 delivery Rizhao for a trip via east coast
Australia and redelivery Singapore-Japan rgane at $10,000 daily.
Pacific period business included reports that CTP took the 2005-built 75,656 dwt
Ocean Lyra with May 12-15 delivery Surabaya for 3-5 months trading and
redelivery worldwide at $12,500 daily.
GMI was said to be the charterer of the 2004-built 74,823 dwt Darya Shree with
May 05-15 delivery Shanghai for 3-5 months trading and redelivery worldwide at
$12,250 daily.
CAPESIZE
========
Capesize business ended the week quietly as the May Day holidays started to
bite. The market is basically optimistic, as sources indicated they expect
Chinese demand for iron ore imports is expected to result in a record-breaking
year. According to a report from Lloyds List today, Chinese mills will continue
to import ore since the quality is better than domestic production and spot
prices are currently below break-even levels for domestic producers. Combine
this with reports of vessel scrapping and delays on newbuildings, and there is
hope that the market will see some improvement in the short-term before
beginning a more permanent recovery next year. In the Atlantic, trip out with
ore are steady in the $18.00-$18.50 range. Pacific business was extremely quiet
today, with little to report. The Baltic Capesize index gained 28 to 2376.
Atlantic Capesize business heard that Vitol took a TMT TBN with May 16-25
loading 150,000 tons 10% coal from Port Drummond to Rotterdam at $10.40.
Cargill fixed a MOSK TBN with May 15-29 loading 150,000 tons 10% coal from
Richards Bay to Rotterdam at $7.95.
HANDY/SUPRAMAX
==============
Atlantic Handy business remains the stronger of the two basins, with rates in
the north Atlantic firm. There appeared to be some interest in period fixing,
but details have yet to emerge. Pacific Supramax business fared poorly this
week, with rates easing and fears that cargoes from South America have now been
covered. Owners continue willing to fix at lower numbers to get back to the
more active and profitable Atlantic. There was little concluded business
reported in the Pacific today, with most traders away for the holiday. The
Baltic Supramax index was up 3 at 1430, and the Handysize index moved up 1 to
694.
In Atlantic Handy business, the 2001-built 52,407 dwt Yasa H.Mehmet went to GMI
with May 05-10 delivery Lagos for a trip via north Brazil and Bahrein, with
redelivery passing Muscat outbound at $21,500 daily.
The 1994-built 43,200 dwt Cargill-relet Nena C has gone to Norden with prompt
delivery north Spain for a trip via the Continent and redelivery India via Cape
of Good Hope at $20,000 daily.
Scrap business saw the 2008-built 31,772 dwt Merian Bulker fixed to an
undisclosed charterer with May 04-05 delivery Kvinesdal for a trip via the
Continent and redelivery in the Mediterranean at $20,000 daily.
Eitzen agreed $21,000 daily for the 2003-built 35,200 dwt Valdivia with May
02-03 delivery in the U.S. Gulf for a trip with redelivery UK-Cont/Med region.
From the Pacific, period business reports heard that TMT was linked with a
2009-built 58,000 dwt JJ Ugland TBN for May 2009 delivery ex-yard in the Far
East for 12-months trading and redelivery worldwide at $14,250 daily.
<<>>
UK Club reports increase in free reserves and capital
Monday, 04 May 2009
UK Club’s decisive reaction to rising claims, negative investment returns and tighter financial regulation has resulted in an increase in free reserves and capital at 20th February 2009. Highlights
• Total funds and capital $1,141 million (15 % increase)
• Total liabilities $807 million (6 % increase)
• Free reserves and capital $334 million (46 % increase)
• Market loss on investments limited to $18 million on assets in excess of $900 million
• 2006 policy year closed with no further supplementary premium
• Estimated supplementary premium for 2008 maintained at 20%
• Confidence and loyalty to the Club remain high
• Business well capitalised and positioned for the future
• Club’s A- (stable outlook) rating reaffirmed by Standard & Poor’s
• Responded early to heightened investment risk, reduced exposure to equities (3 per cent) and absolute return funds (11 per cent); over one third of investments in fixed interest (bonds) and over half in cash
• Currency exchange loss on non-dollar assets increased total investment loss to $56 million, but offset by a reduction in the value of non-dollar claims liabilities
• Raised $100 million hybrid capital, before capital markets closed and global liquidity crisis struck
• Supplementary premiums on 2006 and 2007 policy years levied in October 2008 to minimise policy year deficits caused in part by high Pool claims in those years
• The 2008 estimated supplementary premium is not included in the figures for the year end. A decision on the level of call will be taken in October 2009.
Commenting on the results after the Club’s Board meeting in Lausanne on April 27th Hugo Wynn-Williams, chief executive of Thomas Miller P&I Ltd, managers of the UK P&I Club, said:
“The year has been an eventful one for the Club and one that has been marked by the action taken to minimise investment risk, reduce the past policy year deficits and prepare the Club for the prospect of tighter financial regulation through the hybrid capital issue. These steps taken together mean that the Club will be in a strong position to weather the current financial conditions and meet the demands for greater regulatory capital in the future.”
REVIEW OF THE YEAR
Board action
The UK P&I Club has taken a series of calculated measures to address the rising cost of retained and pooled claims, very low investment returns and the prospect of tighter financial regulation. It has reduced its equity holdings, raised additional capacity for solvency purposes, levied supplementary premiums and set a general increase for the 2009 policy year.
The extraordinary events sweeping the world economy have had a profound impact on financial markets and shipping insurance. Investment returns have moved from a comfortable 5per cent or more over the past five years to a negative return for 2008. At the same time, P&I clubs have faced unprecedented levels of claims resulting from the recent high levels of shipping activity.
In October 2007, the Club had reported that these levels and the increased size of the world fleet would probably produce more large claims. Record claims on the International Group of P&I Clubs’ Pool for the years 2006 and 2007 duly ensued, some of it covered by the outward reinsurance of the Hydra captive. However, 2008 has seen far lower activity on this front which has partially offset the level of retained claims.
Claims within the UK Club’s retention of $7 million continued to increase, by about 11 per cent in 2008 compared with 2007.
Minimising losses from investments
Though outperforming markets generally, the Club incurred a disappointing investment loss of $56 million. Investments suffered from exposure to non-US dollar currencies, absolute return funds and, to a limited extent, poor equities performance. Only one third ($18 million) actually represented underlying investment loss while $38 million was due to the translation effect of revaluing non US dollar assets.
The UK Club considerably reduced its equity holdings in October 2007. By the onset of the present financial turmoil, it held just 3 per cent equities and 11 per cent in absolute return funds, with over one third in fixed interest (bonds) and over half in cash. Despite this, the Club suffered losses on equities and, to a lesser extent, absolute return funds. This was partly redressed by positive returns on cash and fixed interest.
The Board reviewed the Club’s investment policy at the beginning of the year and decided that the restrictions put in place late 2007 on the purchase of new equities should be relaxed to allow some advantage to be taken if there are stock market rallies as economies begin to stabilise. The implementation of this policy will be monitored closely.
Securing future solvency
In July 2008, the UK Club was the first International Group club to raise additional capital for solvency, not operational purposes, in the form of $100 million in hybrid capital at a coupon of 9 per cent. This capital augments the Club’s traditional free reserves and counts as capital for regulatory and rating agency purposes. Its issue marked an important step in preparation for Solvency II, which involves significant changes in EC regulation of insurance companies. Financial sector developments of the last six months are leading regulators and governments to consider even higher capital levels than those envisaged initially under Solvency II.
Reducing deficits through supplementary premiums
As 2008 progressed, the impact of continued claims deterioration, the increased cost of personal injury claims and the absence of investment income threatened the underlying free reserves. By October, a disappointing outcome for the year was unavoidable. Supplementary premiums on the open policy years to restore the level of underlying free reserves, were agreed by the Board. Supplementary levies of 20 per cent on 2006 and 25 per cent on 2007 raised $54 million and $70 million respectively, reducing the deficits to $13 million and $34 million. These supplementaries undoubtedly had some effect on renewals but loyalty to the Club remained high.
Consequently, free reserves at the 20th February 2009 increased to $235 million from $229 million. The hybrid capital increased the Club’s capital and reserves to $333 million.
The estimated 20 per cent supplementary premium proposed on the 2008 year, to be resolved by the board in October, would change the projected outcome on that policy year from a $50 million deficit to a surplus of $13 million.
For the 2009 policy year, the Club set a general increase of 12.5 per cent on renewing mutual owned tonnage and achieved 11.7 per cent before allowing for changes in terms of cover e.g. deductibles etc. The aim was to achieve breakeven on the underwriting result. This increase took account of changes to the Pool; the deficit on the 2008 policy year; the lower inflation and commodity price environment; the lower sterling cost of the managers’ operations; and greater investment risk with returns at historic lows.
Financial position
During the year, Standard and Poor’s changed the Club’s rating from A (stable outlook) outlook to A- (stable outlook). The change reflected S&Ps view about lower financial flexibility, even taking the hybrid capital and supplementary premium levies into account. On 17th April Standard and Poor’s reaffirmed the Club’s A- rating.
Taken overall, the Club has considerably strengthened its financial position, comfortably meeting the requirements of its regulators and is excellently placed to meet those of Solvency II. The uptake of the hybrid capital issue is an outstanding testimony to the confidence in the Club and loyalty remains high.
Claims
Claims on the UK P&I Club for the 2008 policy year are projected at $322 million, marginally lower than the 2007 projection of $336 million, which was more costly in retained claims and still involved a record contribution to the International Group of P&I Clubs’ Pool.
People claims from passengers, stevedores, pilots, visitors and particularly crew for illness, death and injury claims grew more than any other category. Of the $24.6 million increase in member claims from 2007 to 2008, a striking $21.5 million was attributable to people. Escalating crew wages, compensation for crew illness, death and injury, disability payments; and enhanced medical care and hospital costs have driven claims upwards.
The UK Club’s Board meeting learned on April 27th that numbers of crew injury claims actually declined by nearly 28 per cent over 1998-2008 and those involving medical costs or compensation by 16 per cent. The managers feel these reductions speak well of members’ efforts to maintain high safety standards and screen new crew properly. However, the average cost per crew claim has increased well above normal inflation levels. For illness claims, the average cost rose three times from 1999-2008: $7,525 to $22,920. This trend is of major concern to all P&I clubs.
There were several large dock and shore installation damage claims early in 2008. Two have been reported to the Pool, with both estimated to cost less than $15 million. This category can be volatile. As ship utilisation decreases, these types of claim may diminish.
Even though commodity values have been rising, cargo claims have been relatively stable and expected upward spike in claims in 2007 and early 2008 did not occur. This may partly reflect the carriage of finished goods rather than commodities but also indicates high operating standards.
If the current shipping recession follows the patterns of previous ones, claims volumes may drop substantially. This should help to move the combined ratio to below 100 per cent but the extent and timing of such a fall will be uncertain.
Source: UK & P&I Club
Tanker spills continue downward trend
Monday, 04 May 2009
Tanker spills followed a continuing downward trend during 2008, according to latest tanker spill statistics by The International Tanker Owners Pollution Federation Limited (ITOPF). "In 2008, there were eight incidents resulting in spills of seven tonnes and above," said ITOPF. "Of these, just one measured over 700 tonnes, which is three less than 2007 and the lowest year on record. Moreover, the oil spilt during this one incident accounts for over 70% of the total spill volume from tankers for 2008," it added.
In the 2009/2010 ITOPF Handbook, the not-for-profit organisation says some 35% of spills in the category 7-700 tonnes occurred during routine operations, most especially loading or discharging (28%).
"Accidents were the main cause of large spills (>700 tonnes), with groundings and collisions accounting for 63% of the total during the period 1974-2008. Other significant causes included hull failures and fire/explosion," ITOPF added.
ITOPF's Dr Karen Purnell told Sustainable Shipping that with climate change now high on the agenda and the continued focus on alternative fuels, there is an increasing demand to understand its effects on the environment.
"There is a general lack of experience when it comes to spills from distillate fuels and biofuels, and we are seeing increased interest from our members to appreciate the consequences of a spill, particularly when operating in ice-covered environments," Purnell noted.
Purnell will be replacing Dr. Tosh Miller as managing director at ITOPF effective May 2009.
Source: Tankerworld
GAC Shipping strengthens China marketing team
Monday, 04 May 2009
GAC Shipping has further strengthened its Marketing team for China, Hong Kong, Taiwan and Macau by appointing Clarence Chan as its Senior Marketing Manager, Shipping Services, for Greater China with immediate effect. His promotion follows his 15 years' service with GAC and the appointment of Shanghai-based Jessie Gong as an additional Marketing Manager for the region earlier this year.
Chan joined GAC in 1994 as Marketing Manager for the Greater China region representing GAC's more than 300 offices worldwide and promoting the Group's services to prospective clients. He brings a solid background of marketing and business development experience to his new post, including 7 years with a leading shipping service company in Hong Kong.
Based in Hong Kong, Chan spearheads GAC's shipping marketing activity in the Greater China region's fast-growing shipping industry. One of his immediate focuses is to maintain customer relationships and consolidate new business for the company.
Commitment to China Neil Godfrey, Group Sales Director, Shipping says: "Clarence's appointment not only recognises his years of loyal service to GAC, but also highlights GAC Shipping's commitment to expanding its sales and account management resources in China.
"Clarence is working closely with our new colleague, Jessie, and retains overall responsibility for the effective promotion of GAC's global ship agency and related services to the shipping and trading communities in this important regional market."
Source: GAC
S China province sees drastic surge in Q1 ship exports
Monday, 04 May 2009
Guangdong Province, an economic power house in southern China, sold abroad 42,000 vessels in the first quarter of this year, a growth of 230 percent on the same period of last year, local customs house said Sunday. The exports were valued at 410 million U.S. dollars, up 7.2 percent. Of the total export value, 49.1 percent, or 200 million U.S. dollars, is recorded by foreign-funded companies, up 14.2 percent, and 39.4 percent, or 160 million dollars, by state-owned enterprises, down 8.8 percent.
Private businesses posted a growth of as fast as 65 percent in ship exports in the three-month period, the local customs noted.
Most of the province's ship exports went to Hong Kong and Association of Southeast Asian Nations (ASEAN) members. Sales to the European Union declined 50.5 percent to 35.57 million U.S. dollars.
Source: Xinhua
China tanker market to 'outperform' other countries
Monday, 04 May 2009
China's oil tanker market will stay buoyant while outlook for the global market remains grim, an official from China Shipping Development Co Ltd has said. Managing Director Mao Shijia said the shipping industry was ''highly cyclical'' and that the ongoing economic crisis might continue to pull it down until the end of this year.
He anticipated a complete recovery of the global oil tanker shipping sector to take place around 2012.
Mao, however, pointed out that the oil tanker market in China would outperform other countries as a result of Chinese emand.
China relies on imports for 50% of its demand. Of that 50%, 80% is shipped from the Middle East and Africa.
He forecast that China's overall oil demand in 2009 would increase by 0.64% year-on-year and that worldwide demand will shrink by about 1.5%.
China Shipping Development has 14 oil tankers with total loading capacity of 2.26 million tonnes.
Source: Tankerworld
Qatar's Nakilat seeks $940 mln loan for ships-bankers
Monday, 04 May 2009
Qatar Gas Transportation Co (Nakilat) is looking to secure a $940 million loan to back the acquisition of liquefied natural gas (LNG) carriers, two banking sources close to the deal said. The financing is split between a conventional tranche and an Islamic tranche and will also include a subordinated tranche, one of the bankers told Reuters Loan Pricing Corp.
SMBC is acting as adviser for the conventional tranche, while BNP Paribas is adviser on the Islamic tranche.
The $940 million facility is the third phase of financing for Nakilat's $7.5 billion acquisition of 25 LNG ships and will fund payments required between October 2009 and July 2010, the banker said.
The first phase was a $2.2 billion financing arranged in December 2006, while the second phase was a $1.5 billion facility agreed in July 2008.
LNG is natural gas cooled and shrunk to liquid for transport in specially designed ships. It is regasified at a terminal for transport ashore through pipeline.
Source: Reuters
Frontline Deposited Cash to Regain Loan Covenant Compliance
Monday, 04 May 2009
Frontline Ltd., the world's largest supertanker operator, was asked by lenders to deposit cash to comply with the terms of a loan amid a decline in ship prices. The company paid $3.8 million into a restricted bank account in March to "regain compliance" with a $180 million credit line, Hamilton, Bermuda-based Frontline said in a filing to the Securities and Exchange Commission.
Rental income from leasing a supertanker has slumped 91 percent since July as a global recession curbed demand for oil. The price of second-hand supertankers plunged 46 percent from a record $162 million last year, according to data from the London-based Baltic Exchange.
Source: Alaric Nightingale, Bloomberg
Iron ore price negotiations - China to fix benchmark price
Monday, 04 May 2009
China View quoted Mr Luo Bingsheng deputy chairman of China Steel Industry Association as saying that China has no intention of giving up the initial pricing power of the ongoing iron ore price negotiations. Mr Luo said "If the iron ore price was in line with our requirements, we would accept it. If others' agreements are not in line with our requirements, we will stick to our own claim.”
He said various miners and steel producers had come to the agreement that the global steel industry would generally see an over-supply this year, so miners should cut iron ore prices for the 2009 annual deal, but there was no agreement on the scale of the cuts.”
In the similar development, Mr Michael Zhu Vale's China president, said Tuesday at an industry conference in Beijing that the Brazilian mining giant would cut iron ore output by 25% this year.
The 65% price rise of iron ore agreed last February between Japanese, ROK steelmakers and leading Brazilian iron ore supplier Vale set the 2008 benchmark price.
China's leading steelmaker Baosteel in December 2006 beat other buyers in setting the iron ore price for fiscal 2007 with a slight9.5% price rise. The lower-than-expected increase was deemed a success for Chinese buyers.
Source: China View
Panama Canal bows to market concerns finally
Panama City: The Panama Canal Authority, or ACP, will adopt a temporary plan to reduce tariffs in the short term starting June 1 to help the international maritime industry deal with the current economic crisis, canal officials said.
The plan, approved last week by the ACP board of directors, will be effective until Sept. 30 of this year and at the same time will provide the reservations system with added flexibility, a communique from canal authorities issued Thursday said.
The plan includes two components: the redefinition of “ballast” (freighters without passengers or cargo) for container carriers going through the canal, and modifications to the reservations system to increase flexibility and reduce tariffs.
In the first component the definition of “ballast” is modified for container-carrying vessels to allow those carrying 30 percent or less of total capacity a fee of $57.60 per TEU (a 20-foot-long container).
The tariff for loaded ships will be $72 beginning last Friday, according to a previously approved scale.
With regard to the reservations system, a reduction will be applied according to the size of the ship for all segments that use this method.
Consequently the basic reservation charge for a super freighter 100 feet wide or more and 900 feet long or more will be reduced to $5,000 per transit. [04/05/09]
Somali pirates seize two ships
Nairobi: Somali pirates hijacked a Greek and a Ukrainian ship on Saturday and a NATO warship briefly detained 19 pirates armed with high explosives after foiling an attack on a Norwegian tanker in the Gulf of Aden.
Pirates said they were taking the Ukrainian ship, hijacked in the Indian Ocean with a cargo including United Nations’ vehicles, to the Somali coastal town of Haradheere.
“We have hijacked a ship carrying industrial equipment including white cars with the UN logo, our friends are on board it,” a pirate who said his name was Hussein told Reuters by telephone from Haradheere.
Maritime and UN officials were not immediately available to confirm the hijack.
Pirates are now holding 17 ships and around 300 crew, including the Greek-owned cargo ship Ariana, hijacked overnight with its Ukrainian crew.
Meanwhile, a Portuguese frigate captured 19 Somali pirates after foiling an attack on an oil tanker but released them all, North Atlantic Treaty Organization (NATO) officials said Saturday.
Commander Chris Davis, from the control center for the NATO mission protecting merchant ships off Somalia, said the frigate Corte Real launched a helicopter Friday after being informed of an attack on the tanker, the Bahamas-flagged Kition.
The helicopter pursued the pirates back to their mother ship, a fishing boat which was later boarded and weapons including grenade-launchers and explosives were seized, Davis said.
However a Portuguese officer with the NATO force in the Gulf of Aden, Santos Ferreira, told TSF radio that the 19 pirates captured had been released “after contact was made with Somali national authorities.”
It was the first time NATO forces found pirates armed with raw explosives, Lt. Cmdr. Fernandes said from the Portuguese frigate the Corte-Real, which responded to the attack.
The Corte-Real had sent a helicopter to investigate a distress call from the Greek-owned and Bahamian-flagged Kition late Friday about 100 miles (161 kilometers) north from the Somali coast in the Gulf of Aden.The suspects fled to a larger pirate vessel without damaging the Kition, but were intercepted by the warship an hour later.
The seizure of explosives from the group that attacked the crude oil tanker MV Kition may indicate the pirates are adapting their tactics as crews become better trained in counter-piracy measures.
Sailors are aware that pirates generally attack during the day and that some guidelines suggest designating a safe room with a bulletproof door where crews can lock themselves in case of an attack. Such a room would still be vulnerable to being blown open with explosives.
Davis said in another incident on Thursday a Turkish vessel, the Christina A, was attacked by pirates in two boats off the Kenyan port of Mombasa, but managed to shake them off by increasing speed to 20 knots.
The Kenyan-based East African Seafarers Assistance Program said pirates had seized a bulk carrier in the Indian Ocean, 250 nautical miles southwest of the Seychelles. [04/05/09]
Keppel loses rig contract
Singapore: Keppel Corp., the world’s largest maker of oil rigs, received notice to cancel work on a S$181 million ($122 million) multipurpose offshore drilling vessel from the contracting oil group GSP Titan Ltd.
The cancellation was “due to the owner’s difficulties in securing project financing as a result of the current credit situation,” Keppel said late Friday in a statement to the Singapore stock exchange.
Contracted to unit Keppel Singmarine Pte in late July 2008, the shipbuilding project was in its early stages, the statement said. Keppel Singmarine has received payment covering costs incurred as well as the expected loss of profit, it said. [04/05/09]
ABS reports strong 2008, prepares for 'gathering cloud'
New York: ABS chairman and ceo Robert D. Somerville described 2008 as a “successful, challenging and extraordinary” year. The class society ended 2008 with a record fleet exceeding 144m gt, and that growth continued through the first quarter of 2009 with the classed fleet reaching 148m gt at the end of March, he told the annual members meeting. The year-on-year increase in the ABS classed fleet neared 9m gt.
The past year also saw the orderbook of new vessels contracted to ABS class increase by more than 13m gt to a new record of 51m gt for which formal requests for class had been received. An additional 21m gt of orders were pending to ABS class.
Somerville noted the growing industry concern that the size of the world orderbook may have reached a “distorted and possibly unsustainable level” but expressed confidence that “a substantial proportion of those orders to ABS class will be built, particularly those contracted for delivery within the next twelve months.” He noted that the continued conversion of pending orders into firm requests for class through the first part of this year contributed to that confidence.
The ABS chairman told the members that the society had undertaken a comprehensive risk analysis to assess every newbuilding order it holds. “As a consequence, we feel that we have as good an insight, as current economic and market conditions allow, into the impact the downturn will have on our orderbook and we are adjusting our operations and staffing accordingly,” he said.
Somerville revealed that the current level of activity at the class society remains “very high” but he predicted that the wider market downturn would begin to translate in a slow down in 2010 lasting until possibly 2012. Reminding the ABS members of the last period of massive overbuilding in the 1970s he predicted that “it is reasonable to expect a similar period of supply-demand realignment that will leave us with a much more modest orderbook for some years to come.”
Saying that “there is also a silver lining to this gathering cloud,” the ABS leader outlined a program of research and development that will be undertaken during the expected period of reduced newbuilding activity. “We see this as an opportunity to chart a new course, one that will be even more closely aligned to the provision of integrated life cycle services that help our clients to operate more safely and efficiently and that also dovetail more closely with our engineering and survey responsibilities,” he said.
Expanding on the society’s activities in 2008, ABS president and coo, Christopher J. Wiernicki, provided the members with statistics showing that ABS had continued its traditional strength in the tanker sector, holding a clear market lead with a 33% share of all tanker tonnage on order at the close of the year. The society also rose to the number two ranking within the bulk carrier orderbook with a 23% share comprised of 540 vessels aggregating 21m gt.
ABS held the largest share of all newbuildings contracted from both Korean and Chinese shipyards with a 24% and 27% share in each country respectively. It also retained its position as the preferred class society for owners ordering in US, Singaporean, Danish and Taiwanese shipyards.
Wiernicki said the society maintained its leading position within the offshore sector with the largest share of exploration units (MODUs), production units, and offshore support vessels (OSVs) in service and on order. The orderbook included contracts for 87 jackup units, 14 deepwater drillships and over 600 OSVs.
With more than 800 vessels of all types delivered into ABS class in 2008, the age profile of the society’s fleet continued to trend down with 58 percent of the existing fleet at end-2008 being aged 10 years or younger and with almost 30 percent of the fleet less than five years old. [01/05/09]
Seafarer unions and employers extend piracy risk area off Somalia
London: The International Bargaining Forum (IBF), the joint negotiating body that brings together maritime unions and employers, has agreed to extend the piracy risk area off Somalia. The wider zone stretches 400 nautical miles (741km from the coast), in recognition of the increasing areas pirates are using.
Crews on ships with IBF and ITF (International Transport Workers' Federation) agreements within this area receive double pay and a doubling of death and disability compensations. If on vessels inside the zone but outside the International Recommended Transit Corridor they have the right to refuse to sail and to be repatriated at the employers’ expense. The ITF had requested the extension of the zone. [01/05/09]
Persian Gulf Tanker Rates May Extend Drop as Ship Demand Wanes
Monday, 04 May 2009
The cost of delivering Middle East crude to Asia, the world’s busiest route for supertankers, may drop for a second session as demand slumps and an oil glut builds up in consuming regions. “Demand has tailed off as the week draws to an end, erasing most of the hope from the start of the week that we were seeing a tightening” in the supply of vessels, Halvor Ellefsen, a tanker broker at SeaLeague AS in Oslo, said by e-mail today. “The world looks brimful of oil.” U.S. crude oil supplies rose 4.05 million barrels to 374.7 million barrels last week, according to the Energy Department. The gain left inventories at the highest level since 1990 and 15 percent above the five-year average for the period. Rotterdam, Europe’s oil-refining hub, is running out of space to store inventories on land as demand drops.
The benchmark rate for shipping crude oil, based on Saudi Arabian deliveries to Japan, fell 0.3 percent to 31.63 Worldscale points yesterday, according to the London-based Baltic Exchange.
Worldscale points are a percentage of a nominal rate, or flat rate, for more than 320,000 specific routes. Flat rates for every voyage, quoted in U.S. dollars a ton, are revised annually by the Worldscale Association in London to reflect changing fuel costs, port tariffs and exchange rates.
Each flat rate assessment gives owners and oil companies a starting point for negotiating hire rates without having to calculate the value of each deal from scratch.
A rate of 31.63 points works out at $16,148 a day, according to the Baltic Exchange. Frontline Ltd., the largest owner of the vessels, said Feb. 26 it needs $32,100 a day to break even on each of its supertankers, a 7.5 percent decrease compared with Nov. 28.
Frontline’s breakeven rate is the amount needed to cover daily running costs for each ship, interest and scheduled loan repayments, and corporate overhead costs. It doesn’t take into account capital spending requirements, final loan repayments, or ships hired from other owners for short-term purposes.
Source: Alaric Nightingale, Bloomberg