Tag: shipping market

Down 0.37 percent to 1,878 points The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, stayed negative for a sixth day on Tuesday as a recent upsurge in capesize rates began to fade ahead of the holiday season.The index, which gauges the cost of shipping commodities such as iron ore, cement, grain, coal and fertiliser, dipped 7 points or 0.37 percent to 1,878 points."It will trend a little bit lower until the New Year, when we should see a jump in activity as people return from holidays," said Nigel Prentis, head of research, consulting and advisory with HSBC Shipping Services Ltd."We should see a lift in rates in early New Year," he said.However, rates may be affected as vessels of all sizes are expected to be delivered from shipyards next year, adding to the glut in the industry. The Baltic's capesize index fell 0.17 percent on Tuesday, with average daily earnings falling to $31,369. Capesizes typically transport 150,000 tonne cargoes such as iron ore and coal.Capesize rates had climbed in the last few weeks and touched a year high last week as coal and iron ore exports to China from Australia and Brazil have risen."There ...

Shippers should be given at least three-six months before the implementation The recession-hit shipping companies will get a breather if the cargo support scheme suggested by a Government-appointed working group is implemented.The group wants all shippers (exporters and importers) with more than a pre-specified annual turnover should compulsorily use Indian ships for carrying a third of their goods. Their export incentives will be linked to fulfilling the shipping criteria, said a member of the working group.The group has suggested that shippers should be given at least three-six months before implementing the one-third cargo support scheme. Currently, Indian ships carry less than nine per cent of the country's cargo. The scheme is expected to not only boost the cargo share of national carriers, but also will help expand Indian tonnage.Currently, India has a fleet of 1,119 ships of 11 million gross registered tonnage or grt.In container cargo, the share of Indian ships is only 3.4 per cent. Even in oil and petroleum products, in which national bottoms enjoyed more than 50 per cent share a decade ago, the share has come down to 15 per cent."The scheme will be a game changer for Indian shipping. It will automatically, increase the national ...

Prospects for shipping industry unlikely to improve much Shipping firms are operating in an unsustainable economic environment with prospects unlikely to improve much in 2012 due to high fuel prices, low freight rates and slowing demand, said the head of the world's sixth largest container firm.The container freight market has been struggling with an over-capacity of ships and may be forced to consolidate further, said Kenneth Glenn, president of APL Co. Pte. Ltd., the shipping unit of Neptune Orient Lines.''Clearly the (industry) losses that you see now and that you are likely to see in the fourth quarter are not sustainable over the long term,'' APL's Glenn told the Reuters Manufacturing and Transportation Summit on Monday.''To some degree, that will result in actions that could change the playing field and could change the level of the competitive environment.''NOL, Maersk Line, CMA CGM and many other shipping firms, reported losses in the third quarter due to the difficult market.Glenn, however, did not expect a repeat of the severe downturn in 2009, when a collapse in trade cost the industry an estimated $19.5 billion. As for APL, Glenn said he sees high-single digit volume growth next year after taking into account the ...

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 ...

The economics of very big ships Aboard one of the world's largest container ships, moving almost imperceptibly through the seas off Vietnam, it's easy to appreciate the economies of scale that allow a T-shirt made in China to be sent to the Netherlands for just 2.5 cents.The Eleonora Maersk and the other seven ships in her class are among the biggest ever built: almost 400m long, or the length of four football pitches, and another half-pitch across. The ship can carry 7,500 or so 40-foot containers, each of which can hold 70,000 T-shirts. On the voyage your correspondent took, the Eleonora was carrying Europe's New Year celebrations: 1,850 tonnes of fireworks, including 30 tonnes of gunpowder.To move all this cargo from China to Europe in just over three weeks, the Eleonora boasts the largest internal-combustion engine ever built, as powerful as 1,000 family cars. This engine turns the longest propeller shaft (130m) ever made, at the end of which is the largest propeller, at 130 tonnes. Yet the ship is so automated that it requires a mere 13 people to crew it. Reassuringly, most captains prefer to take a few more.Maersk Lines, the world's biggest container-shipping company and owner of ...

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 ...