Tag: shipping market

Capesize gains set to slow in 2012 The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, rose for a third day on Friday helped by firm iron ore trade to China with earnings for the larger capesizes jumping to their highest in over a year.Nevertheless, the shipping sector is expected to see more turmoil in coming months as a supply glut and growing economic gloom keep earnings under pressure with growing worries over the outlook for Chinese raw materials demand.The overall index rose 40 points or 2.13 percent to 1,922 points."Despite the demand headwinds from muted steel production in China and slowing industrial production, the capesize segment has been remarkably resilient. Mix of factors including higher port congestion, recovery in coal exports from Australia and increasing Chinese iron ore imports from Brazil, aiding tonne mile have supported the segment," RS Platou Markets said."Declining steel output and slowing industrial production remains a key challenge going into 2012 for dry bulk demand and we still expect rates to see a gradual decline."China's industrial output growth hit its slowest pace in more than two years in November and inflation tumbled as economic conditions deteriorated, raising expectations Beijing will ...

Stronger retail sales in U.S. and early Chinese New Year seen driving demand Some analysts and container lines are expecting a rebound in trans-Pacific spot rates after prices hit their lowest point in 23 months this week.Several carriers have announced planned rate increases at the start of January, as lines attempt to take advantage of cargo spike before factories in Asia close for Chinese New Year celebrations.Prospects for carriers operating the trans-Pacific were much better than on Asia-Europe "given supply adjustments" and the "not so bad" demand outlook from the U.S., said Rahul Kapoor, a Singapore-based shipping analyst with broker RS Platou."We see a potential for inventory restocking there, albeit at a more gradual pace than in 2010," he said. "We expect rates to recover on expected improvement in demand ahead of the Lunar New Year, but capacity adjustments would be the key to the extent of recovery."Spot rates on major trans-Pacific lanes are running close to 30 percent lower than a year ago. But carriers have speeded the idling or removal of capacity from the trade, and liner and shipper sources confirm rollovers were evident in northern China on certain sailings during much of November.Thomas Knudsen, Maersk Line CEO ...

Shipping companies find it hard to get financing from European banks due to crisis Chinese banks should enhance their professionalism and services to global standards if they want to tap the opportunity to finance shipping companies which find it hard to get financing from European banks due to the debt crisis.Many European banks have reduced their loans and credit to the shipping companies which caused them to turn to the Chinese banks in a bid to secure financing, industry experts said at a marine forum in Shanghai.The opportunities are there for the Chinese banks to expand into shipping finance, they said. In 2009, the Industrial and Commercial Bank of China and the Bank of China provided shipping finance of US$16.9 billion, or 5 percent of the global share, Marine Money data showed."Chinese banks are going to take a very important share in global shipping finance in the next 10 years," said Paul Chang, managing director and global head of shipping at ICBC Financial Leasing Co.But Chinese banks still have a way to go to meet international standards required in shipping finance.George Xiradakis, managing director of XRTC, a consulting company for Greek shipowners, said China Development Bank took 17 months, much ...

Panamax market struggling with fleet supply The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, rose for a second session on Tuesday helped by firmer bookings on the larger capesizes.Nevertheless, the shipping sector was set to see more turmoil in the coming months as a supply glut and growing economic gloom would keep earnings under pressure.The overall index rose 19 points or 1.05 percent to 1,828 points. Prior to Monday's rise, it had fallen for six straight sessions."The Atlantic (capesize) market is tight on tonnage and this of course, combined with fairly strong Brazilian exports, is keeping the market well supported. But it is not enough to make it fly," said Georgi Slavov, head of dry freight & basic resources research at ICAP Shipping, adding he did not expect capesize rates to rise much further.Capesizes, which typically transport 150,000 tonne cargoes such as iron ore and coal, had driven a recent rally helped by firmer coal and iron ore exports from Australia and Brazil to China as well as a pick-up in Japanese coal imports. A build up of port congestion had also provided support."We expect continued volatility for dry bulk rates, as the oversupply ...

Many container carriers have been losing money Global container ship operators, hammered by high costs, oversupply and flagging demand, are cutting shipping capacity to shore up freight rates depressed by a sluggish global economy.Many container carriers have been losing money since the third quarter as freight rates fell sharply, mainly due to a supply glut, industry experts said at a regional logistics and maritime conference here on Friday.The Shanghai Shipping Exchange's China Containerised Freight Composite Index fell about 12 percent this year to 923.7 on Friday. Freight rates on the China-Europe route have tumbled about 35 percent.The shipping industry is a barometer for the global economy as it accounts for more than 80 percent of international trade volume.Maersk Line, a unit of Danish shipping and oil group AP Moller-Maersk AS and the world's largest container ship operator by volume, is considering idling some of its ships, especially those on Asia-Europe routes."We are looking to see whether we should take some ships out of the Asia-Europe route," said Tim Smith, chief executive of Maersk Line's North Asia division.Maersk Line posted a loss for the third quarter and said it expected to stay in the red for the whole of this year."I ...

China's shipping industry has seen sluggish performances since the latter half of 2009 The downcast sentiment in China's shipping market will persist for a long period of time, due to growing uncertainties worldwide, a transportation official has said.Despite a brief upturn after the financial crisis in 2008, China's shipping industry has seen sluggish performances since the latter half of 2009, said He Jianzhong, spokesman for the Ministry of Transport (MOT) Friday.The inbalance between supply and demand, created by growing capacity and dwindling appetite due to the global economic downturn, was the major factor dragging the industry down, He said.He said shipping businesses have been squeezed by the rising cost of fuel and labor, as well as slumping freight due to fierce market competitions, leading some to widen losses.To mitigate the damage, the MOT is working on measures to guide and help the companies to better face the challenges, according to He.He said shipping businesses should step up efforts to optimize shipping structure and modernize their ships.Meanwhile, the MOT will work with other relevant departments to phase in a tax rebate scheme in the ports of departure, as well as to push forward a shipping taxation policy that is in accordance ...

Tehy remain pessimistic on the shipping industry's outlook Operators and analysts have turned more cautious on the outlook for the container shipping industry as the deteriorating European debt crisis and sluggish economic growth in other developed economies weighs on global trade activities.Hong Kong-based container shipping company Orient Overseas (International) Ltd (OOIL) has cut its capacity on routes to Europe by 20 percent amid lower demand for trade, Chairman and Chief Executive Tung Chee-chen said on Friday.Tung explained that he remains pessimistic on the shipping industry's outlook due to the slowdown in the global economy and higher costs."Asia-Pacific is good and growing. The problem is Asia to America and Europe," Tung told reporters on the sidelines of a logistics and marine services conference.In August, the operator of Hong Kong's biggest container line, which ships finished and semi-finished goods ranging from toys to garments to the West from Asia, reported an 86 percent slump in its first-half profit.OOIL said it expected "difficult" conditions next year as shipping rates continue to decline due to the sluggish global trade activities.The global container shipping industry had lost money in the third quarter, Tung noted. In October, OOIL reported that third-quarter revenue fell 8 percent from ...

Concentration on safe navigation Some years ago, there was a notable incident which occurred when a supply ship Master conning his ship out of harbour in thick fog, was so distracted by two separate telephone calls which he was trying to deal with simultaneously that he failed to pick up a third, rather more vital message from the port VTS, that was telling him he was heading straight for a concrete breakwater. And there was the famous case of the cruise ship collision which occurred when her watchkeeping officer subordinated his lookout duties to complete the garbage form which needed to be ready at the next port of arrival. Another memorable case involving bureaucratic procedures was that of the port arrival checklist on a ferry, the final few items left blank as by then, the ferry had crashed into the quay.There have been a number of strandings which have been contributed to by the inattention of the watchkeeper who was on a mobile telephone at the crucial moment. Communications and brilliant technology can sometimes be a serious distraction to people, who in a less technological age would have been keeping a good visual lookout, with less risk of their attention ...

Maersk has seen the value of its containership fleet fall 24% in the past 12 months Containership owners have seen billions of dollars wiped off the value of their fleets over the past year.Massive overcapacity has squeezed not only freight rates, but also the value of steel floating on water. The world's largest container ship owner, AP Møller-Maersk, has seen the value of its containership fleet fall 24% in the past 12 months.Its 222 vessels currently in service are now worth $9.1 billion, compared with $12 billion at the start of November last year,Similarly, major owner and operator MSC's fleet of 202 containerships in service at present are worth $6.9 billion, compared with $8.4 billion 12 months ago.A report reveals that the Vessels Value data shows that today's fleet values are closing in on what these ships would have been worth in November 2009 - continued declines in freight and charter rates this year have pushed asset values back to the lows of two years ago, when the containership market was suffering the worst downturn in its history.Online ship valuation service VesselsValue.com was launched this year by London-based sale and purchase broker Seasure Shipping and this week expanded its coverage ...

PWC analysed the performance of 150 shipping companies Everyone would agree that it has been a tough last couple of years for the world economy, global trade and the shipping industry. The markets have been particularly volatile and this has been reflected across the board, from commodity prices to freight rates, vessel values and bunker prices. Nevertheless, global trade in 2010 recovered to the same levels as in 2008 and as indicated by the results of our benchmarking analysis, the overall performance of shipping companies improved somewhat in 2010 compared to 2009.As in prior years, in preparing this third Global Benchmarking Analysis we have analysed the performance of 150 shipping companies across the various subsectors through some basic Key Performance Indicators (KPIs) derived from their 2010 annual reports and monitored how these have evolved over the last 5 years.We have also tried to give some insight on the recent challenges and drivers of the industry on the basis of some of the qualitative information and disclosures in those annual reports. We trust that this analysis adds value to shipping companies and other participants in the shipping industry who wish to understand the impact of recent developments on the industry and ...