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EU Steel Prices in Decline in May as Demand Falters

PostTime:2019-05-24 09:27:29 View:11

The recent negative trend in European strip mill prices continued, in May. Reduced demand from the auto sector is still undermining the steelmakers’ ambitions for increased basis values. Moreover, general activity in the marketplace is below projections for this time of year. Global trade tensions and political uncertainties led to a lack of investment and created a great deal of caution. Service centre inventories are in surplus for current requirements, leading to substantial negative pressure on resale prices. Procurement by distributors remains weak. New import offers are uncompetitive, at present. Large quantities of foreign material, booked at the turn of the year, will take time to be consumed. Due to weak demand, and in order to try to stem further price erosion, ArcelorMittal announced its intention to temporarily idle production at the steelmaking facilities in Krakow, Poland, and reduce output in Asturias, Spain. In addition, the planned increase of shipments from ArcelorMittal Italia will be slowed down. These actions should result in a total reduction in supply of 3 million tonnes per year. In a later development, the company informed buyers of an intended price rise of €30/40 per tonne for all strip mill products. Further contraction was noted in Germany’s manufacturing sector, in April. In the steel market, sentiment is negative with activity still at a relatively low level, amidst continuing falls in selling values. Buyers are cautious, hesitating to place new orders. They anticipate further price reductions, as producers try to plug gaps in their order books. The differential between domestic offers and those from overseas is narrow, which has a dampening effect on new import activity. French basis values decreased since last month. Activity remained at a reasonable level, although below that in April. MEPS detects substantial competition between distributors, who have been forced to adjust their resale prices accordingly. They then negotiated discounts with the steelmakers, in order to preserve their profit margins. Now, with the expectation of further price decreases, major service centres are delaying purchases until June, at the earliest. A number of traders are reported to be selling at a loss. Very few new offers are quoted by third country importers. The downturn in the Italian manufacturing sector continued, in April, for the ninth consecutive month. This has badly affected the steel market. Moreover, the number of working days, in April/early May, were severely curtailed by holidays, thus negatively impacting domestic sales volumes. All strip mill products show price weakness, mainly due to import pressure and low underlying demand. Expectations remain fragile because of the problems in the auto sector and the fear of further steel price reductions. Service centres are using the stock they have on hand. They see little possibility to lift resale values as end-users refuse to pay more. The UK economy is reasonably robust, remaining one of the better performing countries in the EU. In the steel sector, distributors report acceptable sales volumes but profit margins are reduced. Independent service centres complain that integrated mill-owned distributors are selling aggressively. In general, inventories are in balance with current sales activity. In May, strip mill product selling values were revised downwards. Demand for flat products is stable, in Belgium. Distributors, viewing the current price trend as negative, are buying very cautiously. Delivery lead times from domestic suppliers are short. Recent service centre activity was slow due to public holidays. Both sales volumes and resale prices are decreasing. As a result of this negative scenario, the steelmakers, whose order books remain poor, have further discounted basis values of strip mill products. MEPS notes little influence from third country imports. Spain’s manufacturing sector continued to expand during April but at a faster rate than in March. The steel market is relatively stable, with regional variations between the north and south of the country. Service centre sales volumes turned down slightly, in May. Current resale values do not reflect replacement costs. Offers from importers are slightly more interesting to buyers than they were a month ago. Domestic ex-mill basis values underwent further downward movement.

Scrubber Installation Costs Push Star Bulk into Red

PostTime:2019-05-24 09:21:30 View:10

Greece-based shipping firm Star Bulk Carriers delivered a net loss in the first quarter of 2019 on the back of higher costs and off-hire days experienced in the first three months of the year. During a challenging and seasonally weak period of the year, which included around 300 off-hire days for scrubber installations, the company recorded a net loss of USD 5.3 million, against a net income of USD 9.9 million seen in the same period a year earlier. “By the end of May 2019 we are on track to have 40 vessels scrubber fitted. We expect to have a fully scrubber fitted fleet by January 2020. Because we expect 2020 to be a more profitable year, we want to maximize the operating days in 2020 and we thus bring forward to 2019 all our drydocks that would otherwise be due in 2020,” Petros Pappas, Chief Executive Officer of Star Bulk, said. “We expect to undergo 52 drydocks during this year mostly concurrent with scrubber installations which, in combination with 50 at sea installations, will reduce as much as possible our off hire time during 2019,” Pappas added. Our average TCE for the quarter, including realized freight and bunker hedging, was USD 11,192/day per vessel with 96.5% fleet utilization. The company currently has fixed a minimum of 76% of its second quarter of 2019 days at average TCE rates of USD 10,006 per day. “We continue being busy on the financing front, having drawn and agreed to refinance approximately USD 329 million of debt since the beginning of the year, reducing our average margin in these facilities by 217bps,” Pappas informed. Over the past nine months, the company said it had agreed to refinance around USD 1.04 billion creating savings of about USD 10 million annually in interest expense, or USD 250 per vessel day. Star Bulk has also drawn USD 22.4 million of scrubber financing with another USD 112.2 million in place to be drawn later in the year. Voyage revenues for the first quarter of 2019 increased to USD 166.5 million from USD 121.1 million in the first quarter of 2018. The TCE rate for the first quarter of 2019 was USD 10,624 compared to USD 12,586 for the first quarter of 2018 reflecting the weaker dry bulk market environment prevailing during the first quarter of 2019 compared to the same period in 2018.

Hyundai Heavy wins US$390-million order for 2 LNG carriers

PostTime:2019-05-24 09:11:41 View:14

Hyundai Heavy Industries Co., a major shipbuilder here, said Thursday it received an US$390-million order to build two liquefied natural gas (LNG) carriers. Under the deal with an unidentified European shipping company, Hyundai Heavy will deliver the two ships, with capacities of 180,000 cubic meters each, from 2022. The LNG ships, to be equipped with its latest fuel-saving technologies, will allow the customer to save US$1 million in fuel costs, the company said. With the deal, the shipbuilding conglomerate has secured orders to build five LNG carriers so far this year Meanwhile, Hyundai Heavy said its small affiliates, Hyundai Mipo Dockyard Co. and Hyundai Samho Heavy Industries Co., also secured orders from European shippers this week. Hyundai Mipo will build four carriers for petrochemical products, while Hyundai Samho will deliver two crude oil tankers, according to the shipbuilder. Hyundai Heavy did not reveal the value of the deals.

The trade war is forcing China to ‘rethink economic ties’ to the US

PostTime:2019-05-24 09:10:18 View:14

China is exploring more drastic action as a result of its trade fight with the U.S., according to the South China Morning Post. While China is open to resuming trade talks, “government advisers are now highlighting the risk of sourcing critical supplies from an increasingly hostile US…and are exploring ways for the country to cut its exposure to the US,” the paper said, citing Chinese researchers. The article was titled, “Donald Trump’s trade war and Huawei ban push China to rethink economic ties with US.” And China is considering cutting natural gas purchases from the U.S. as part of this movement, the paper said. “The idea that China should buy large amounts of natural gas from the U.S. must be revisited,” Wang Yongzhong, a senior fellow at the Chinese Academy of Social Sciences, a governmental think tank, told the Hong Kong-based newspaper Monday. The move came after President Donald Trump’s latest action to blacklist Huawei, effectively halting its ability to buy American-made parts and components. China is now threatening to stop funding an industry that the two countries have done sizable deals in. In 2017, China agreed to fund a natural gas project in Alaska worth $43 billion, the South China Morning Post said. “China may have to cap U.S. supplies at 10 or 15 percent of its overseas purchases for the sake of supply chain security,” said Wang, who specializes in China’s energy supply security. “What if the [energy] supply [including both liquefied natural gas and oil] is cut off suddenly, as we have seen in the Huawei case?” China bought $6.3 billion worth of U.S. crude and LNG in 2017, 3.6% of the country’s purchases of foreign energy products, the newspaper said, adding that China’s reliance on U.S. energy products is “limited.” U.S. restrictions on Huawei had forced tech companies and chipmakers including Google and Qualcomm to cut ties with the Chinese telecom giant until the U.S. granted a 90-day license to keep existing networks online. The ban sparked a big sell-off in semiconductor stocks Monday. Chinese President Xi Jinping ramped up his rhetoric on the trade war Monday by saying China is embarking on a “new Long March, and we must start all over again!” The trade negotiations between the world’s two largest countries have hit a roadblock after Trump followed through with his threat to increase tariffs on $200 billion in Chinese goods from 10% to 25%. China immediately responded by upping the tariffs on $60 billion of U.S. goods to as high as 25%.

US-China trade war manufacturing exodus creating boom times for Chinese logistics companies

PostTime:2019-05-24 08:59:44 View:10

The US-China trade war has created an unlikely winner: the Chinese logistics companies facilitating the exodus of manufacturers looking to dodge tariffs. The supply chain shift has been claimed as a victory by US President Donald Trump, who tweeted: “Many tariffed companies will be leaving China for Vietnam and other such countries in Asia.” This prompted a rebuke from the Chinese Foreign Ministry on Tuesday, which denied that manufacturers were leaving China in their droves. However, plenty of on the ground accounts suggest that factories are being downsized or closed completely, with firms moving to Vietnam, Taiwan, Cambodia, Thailand and other parts of Southeast Asia. This is not solely due to the trade war, since the rising cost of labour and meeting environmental regulations in China have also led to companies seeking cheaper production hubs over recent years. But the tariffs have accelerated the trend, and logistics companies with cross-border capability are milking the opportunities, moving the growing traffic of Chinese firms from China’s industrial heartlands and newly-built industrial parks in neighbouring countries. “Since the second half of 2018, our company has helped 10 manufacturers – in sectors from jewellery, to electronics, to printing – relocate their entire plant. That is to say, these 10 enterprises have completely shifted and withdrawn from China,” said Eric Huang, who runs one of the leading logistics companies in Guangzhou, R&T Transportation. “We have also helped at least 500 companies to transport their partial production lines, as well as raw materials and equipment, to their newly-built plants in Vietnam, Indonesia and Thailand,” he said. As the trade war escalated in recent weeks, the pace of the exodus has sped up too. On May 10, Trump increased tariffs on US$200 billion of Chinese goods from 10 per cent to 25 per cent. This was followed three days later by the publishing of a new list of goods to be subject to a 25 per cent tariff, containing almost all the remaining Chinese exports to the United States, worth an estimated US$300 billion. Many manufacturers were caught by surprise and left scrambling to get out of China, said Hsu Yu-lin, chairman of the Taiwanese Chamber of Commerce in Vietnam. “There are a lot of companies moving to Taiwan or to Vietnam urgently because they were not psychologically prepared for the worsening trade war. The situation in the last two weeks has turned sharply. Many Taiwanese manufacturers I know were not prepared for such a big change. They had a happy-go-lucky attitude and did not believe it would get so serious,” Hsu said. Hsu added that those companies that can “operate cross-border logistics, handle large-scale manufacturing equipment and manage customs clearance” are reaping the benefit. Before the sudden cooling in US-China relations those companies that had already made the move out of China “thought their judgement was wrong, and complained that the cost of relocation was too high. Now they are just glad, as it is becoming harder and more expensive to move,” Hsu said. Huang at R&T Transportation said that he has noticed another striking trend over the past year: the production facilities being built in Southeast Asian countries are sometimes larger than the factories being left behind in China. “The size of the factory buildings and the number of workers there are usually the same or even larger than in their previous factories in China. We can see local ambitions to take on Chinese production capacity [elsewhere in Asia]. Those industrial parks are newly-built and [already] under expansion. They are all focusing on the relocation of manufacturing from China.” Huang said. Lim Kian Peng is the deputy general manager at Overland Total Logistics (OTL), a Guangxi-based company that has helped 300 manufacturers transporT partial production lines, as well as raw materials and equipment, to their newly-built plants in Southeast Asia. Among them are makers of photovoltaic solar panels, electronic goods and moulds. Often, smaller firms are following their customers – bigger manufacturers – into Vietnam, Lim said. In supply chain terms, “clustering” commonly sees ecosystems of suppliers spring up around the main buyers, which in this case are leaving China at an accelerating rate. Now, the movement of components, raw materials, semi-finished and finished products between China and Southeast Asia accounts for about 80 per cent of OTL’s business. OTL’s current capacity includes up to 500 45-foot trucks with more than 1,000 drivers, offering door to door logistics for forwarding, transportation, cargo handling and warehousing for Chinese manufacturing companies and their newly-built factories in six countries in southern Asia: Singapore, Thailand, Vietnam, Malaysia, Laos, and Cambodia. “The main customers of OTL last year were Chinese manufacturing companies in the fields of hi-tech precision electronics, clothing and footwear, photovoltaic panels, mobile screens, and so on.” he said. The trend, which has been underway for a number of years, is becoming increasingly efficient, with the transiting of raw materials and components from Chinese factories to their counterparts in Southeast Asia happening more and more swiftly. “If the goods are dispatched at 6pm on a Monday from Dongguan, they can arrive at the border of China and Vietnam at 9am on Tuesday, at the industrial park in northern Vietnam at 10pm the same evening, at the industrial park in Bangkok on Thursday, and in Northern Malaysia on Friday,” said Lim, who expects this cross-border business to grow by at least 20 per cent annually over the next few years. Even if the trade war were to end tomorrow, the logistics companies do not expect this trend to grind to a halt. “We started logistics business between China and Southeast Asian countries in 2011, with about 30 million yuan (US$4.34 million) of annual turnover at the time. Our turnover was 150 million yuan in 2018. Though no one knows the final outcome of the trade war, the relocation trend is sure to increase. It is quite possible that the business will double to 300 million yuan this year,” Huang said. Meanwhile, those companies who have yet to make the move are losing out to competitors who may have stolen a march on them, said Hsu at the Taiwanese Chamber of Commerce. “Due to the 25 per cent tariffs in the furniture industry, for example, opening Vietnam-based factories has become a top priority for most international buyers. Your competitor has already relocated, and you have to spend at least one or two years to move, which has become a very serious problem for those companies that took a ‘wait and see attitude’,” Hsu said.

Shipping Rates: Rising off bottom, still far from recovery

PostTime:2019-05-24 08:49:16 View:10

Trade conflicts and geopolitical risks are driving sentiment on ocean shipping rates, particularly in the container market. In liquefied gas sectors, propane transport to Asia is looking increasingly vibrant after a multi-year malaise, while natural gas transport appears to be coming out of its recent doldrums, with hopes for a major revival. Despite the hype, rates for crude tankers remain unimpressive, and rates for dry bulk shipping are still ominously low. Containers The big question in the container-shipping industry is whether U.S. President Donald Trump’s threat to impose tariffs on an additional $300 billion of Chinese exports will lead to accelerated import activity, and thus an increase in the per-box freight rate in the near-term – or, alternatively, a downturn in both volumes and rates. In 2018, U.S. imports surged as companies raced to beat the tariff increase on the initial $200 billion slate of Chinese products. At least so far, there’s no evidence of another rate increase. President Trump’s initial tweets that alerted the market to increased trade tensions occurred on Sunday, May 5. The Freightos Baltic Daily Index for China to the West Coast of North America has declined by 14 percent since then. According to Henry Byers, maritime market expert at FreightWaves, this does not mean the race to beat shipments won’t occur. “You have to remember that in order for U.S. supply chains to move their goods early, it requires a great deal of effort from all parties involved – including suppliers, warehouses and logistics providers,” he explained. “I expect to see the first wave of tariff-driven containers coming in at the end of this week, and hitting the U.S. roads and railways next week [the week of May 27-31],” he said. “I also expect that June 1 will mark the beginning of an upward trend in rates from China to the U.S. West Coast that will continue through the end of November.” LNG Spot rates for liquefied natural gas (LNG) carriers hit an all-time high of around $200,000 per day in November 2018. That kind of cash flow, if sustained, quickly pays back your purchase price on a ship – but alas, it usually doesn’t last, and it didn’t. Rates summarily collapsed back to around the break-even level of $40,000 per day in February-April 2019. Rates are now back in the mid- to upper-$50,000 range per day, up around 40 percent over the past three weeks off a low base. A number of large-scale LNG export projects are about to come online, so the upward trend should continue. Project debuts bolster spot rates in two ways. First, by bringing more volume to the water. Second, by reducing the number of ships available for spot employment. Often, LNG export projects start-ups are delayed. If ships ordered to service those projects via long-term time charters are delivered by the shipyards before project construction is finished, the ships temporarily move into the spot market, weighing down rates. When the ships begin their normal long-term service, spot rate pressure subsides. LNG spot rates are still relatively low, more ‘not bad’ than good. It’s too early to say whether they can attain last year’s peak, and there’s still a fair amount of skepticism about 2019 – and even more concerns about the years ahead as more newbuilding vessels enter the market. LPG One of the few bright spots for vessel owners in 2019 has been the revival of rates for very large gas carriers (VLGCs), a sector that had sunk below break-even for a dangerously long stretch and that desperately needed a breather. VLGCs have the capacity to carry around 82,000 cubic meters of liquefied petroleum gas (LPG) – largely propane and butane. These vessels primarily transport LPG from the U.S. Gulf to Asia via the Panama Canal, and from the Middle East to Asia. VLGC rates were mired in the $10,000-$30,000 per day range throughout 2018 and into early 2019. Then they began their ascent. They hit a recent high of around $50,000 per day in April, and are now slightly lower, at around $42,000 per day, representing a sharp year-on-year increase. VLGC rates have been largely flat over the past week, but U.S. LPG prices have fallen and Far East prices have kept steady, a positive for the economics of the trade. The wider the spread between U.S. and Asia commodity pricing, the greater the arbitrage profit for traders, the more VLGCs are booked on this long-haul route, and the higher spot rates should go. Tankers There’s a great deal of talk about a recovery in rates for very large crude carriers (VLCCs) – tankers that each have a carrying capacity of about two million barrels of crude oil. The theory is that a future slowdown of newbuilding deliveries will coincide with an increase in shipping demand in the second half of 2019. Investors have been betting on this – several crude tanker stocks are now flirting with 52-week highs. And yet, actual spot rates are still unexceptional – at around $12,200 per day. While this is up 82 percent year-on-year (from almost all-time lows in 2018), it’s down 28 percent month-on-month. Optimism for a second-half recovery may be high, but optimism has been high before and dashed repeatedly. “The current market is pretty soft,” acknowledged Ben Nolan, shipping analyst at investment bank Stifel, who added, “Hope springs eternal in the crude tanker market.” He noted that weak rates are to be expected now, for seasonal reasons, but stock pricing clearly shows “an expectation for a sharp recovery in the very near future.” Bulkers If you listen to investment bankers, dry bulk is a market that was supposed to have recovered by now. Rates remains stubbornly very weak. That’s good news for shippers of iron ore, coal, grain and other dry cargo commodities, and bad news for buyers of dry bulk shipping stocks who listened to their investment bankers. Rates for larger Capesize vessels – ships that have a carrying capacity of over 100,000 deadweight tons (DWT), usually around 180,000 DWT – continue to improve, but not exceptionally so. The rates are currently at around $11,900 per day, up 2.5 percent week-on-week. The expected rate recovery in 2019 was wiped out, in part, by the Brazilian dam accident in January, which curtailed iron ore exports to China by mining giant Vale. Brazil-China iron ore shipments have an outsized effect on Capesize rates because the voyage is three times as long as the trip from Australia to China, soaking up three times the vessel capacity. The Baltic Capesize Index hit an all-time low on April 2. It is almost 10 times higher today than it was then. But to put this improvement in perspective, it’s still just 40 percent of its August 2018 level, around one-third of its level in December 2017, and less than one-eighth of its all-time high in the mid-2000s. “It seems the troubles being faced by the dry bulk market are not over just yet,” lamented George Lazaridis, analyst at Greece’s Allied Shipbroking. “Although some improvement has been noted since the start of April, there are increased risks that the summer period will continue to be volatile, and trading, on average, will be below what was witnessed in 2018.”

Drewry: Port Throughput Bounces Back In March

PostTime:2019-05-24 08:45:52 View:10

The Drewry Container Port Throughput Indices are a series of volume growth/decline indices based on monthly throughput data for a sample of over 220 ports worldwide, representing over 75% of global volumes. The base point for the indices is January 2012 = 100. In March 2019, the global container port throughput index bounced back to a level of 130.2 points after experiencing more than 17 points decline in February. This decline was mainly due to the effects of the Chinese New Year holiday period. However, the index is slightly lower than the January 2019 level of 130.8 points but close to six points higher than one year ago in March 2018. Drewry Global Container Port Throughput Index The leading region China saw the largest monthly growth of close to 30 points (27%) in March 2019. It was also around 9.1 points (7%) higher compared to March 2018. Following China, the index figure for Asia (excl. China) was around 13.7% up (16 points) over February 2019 and close to 5.1% up versus March 2018. North America was the region which saw the third largest monthly, as well as annual growth of 7.1% and 6.4% respectively in March 2019. However, the index was at a much lower level of 134.5 points compared to January 2019 when it reached at 142 points. Latin America and Africa were the only regions where the throughput index experienced an annual decline (1.5% and 5.3% respectively). However both witnessed close to a 2% monthly increase in March 2019 over February.

Head of China’s Ministry of Industry and Information Technology under investigation

PostTime:2019-05-24 07:44:39 View:9

China’s Central Commission for Discipline Inspection has launched an investigation on Li Dong, head of China’s Ministry of Industry and Information Technology (MIIT) over his involvement of illegal activities. MIIT, is responsible for the management of equipment manufacturing industries including shipbuilding, automobile, aviation and industrial machinery. Li Dong had been appointed as the deputy director of MIIT in 2008, and was promoted to the director of MIIT in 2016. Currently, Li is under the investigation lead by Neimenggu Autonomous Region Supervisory Commission.

Zhuhai port co-operates with EY and Insurwave

PostTime:2019-05-24 07:43:53 View:8

Chinese port operator Zhuhai Port Group is to jointly develop shipping logistics and marine insurance solutions in the Greater Bay Area via the cooperation with EY and Insurwave. The parties will focus on the cooperation for marine insurance blockchain technology and port logistics to provide a more efficient and effective global trading conditions in the Greater Bay Area. Shaun Crawford, EY global vice chair - industry said, “Combining the knowledge from Insurwave with Zhuhai Port’s experience in port logistics, we’re pleased to establish a joint initiative for identifying blockchain’s applications in cross-border financial services, logistics and trade.” Insurwave, a joint venture between EY and international blockchain firm Guardtime, launched the world’s first blockchain-enabled insurance platform in production. Botao Liu, Strategic Development Center general manager of Zhuhai Port Holdings Group, said: “Both parties have a common interest and by leveraging our core strengths we’re able to seize the opportunities of the Belt and Road initiative, the opening of the Hong-Kong-Zhuhai-Macao Bridge and the Greater Bay Area to promote the connection between marine insurance blockchain technology and global port logistics.” The Greater Bay Area refers to Hong Kong, Macau, Zhuhai and other eight cities in Guangdong province. The scheme of the Greater Bay Area, initiated by China’s central government, aims to develop the region into an integrated world-class economic and business hub.

India, Japan to sign agreement with Sri Lanka for Colombo's East Container Terminal

PostTime:2019-05-24 07:43:11 View:7

The Sri Lankan cabinet is expected to meet today to ratify a tripartite deal with India and Japan for the operation and maintenance of the much-delayed East Container Terminal (ECT) at Colombo’s deep-draughted South Harbour. Whereas the host nation will retain a controlling 51% of the equity in the 2.4m teu capacity greenfield terminal, the residual portion of the stake will be shared between India and Japan in a percentage yet to be finalised. The move is bound to alter political equations in the Indian sub-continent, as it is seen as an effort to counter-balance the handing over of the nine year old Magampura Mahinda Rajapaksa port at Hambantota, on the south-eastern tip of the island, and 15,000 acres of land around the port, to China in December 2018 on a 99-year lease. Sri Lanka had fallen into the debt trap during the days of the Rajapakse government when it took huge loans at stiff interest rates from the Chinese to build infrastructure like roads, airports and city skyscrapers; and later did not have the wherewithal to repay them. At the time of the forced handover of Hambantota to China, Sri Lanka had accused India of not showing sufficient interest in either Hambantota or the East Container Terminal when these had been offered to the Congress-led coalition government in the early years of the ongoing decade. The current move to bring India into the picture is also seen as a desire on Sri Lanka’s part to reduce the almost overpowering influence of the Chinese even in Colombo, where they operate one of the three terminals in South Harbour. The harbour, which has a draught of 18.5 metres that can accommodate even the largest modern containerships, was constructed in a U-shape to accommodate three terminals each with a container handling capacity of 2.4m teu. Colombo International Container Terminal CICT quayside1 At the moment, only one of the three terminals, the Colombo International Container Terminal (CICT), majority-owned by China Merchant Holdings, is in operation, and contributes a substantial portion of Colombo’s container throughput, which is made up of 70% transhipment cargo intended for India, Pakistan and Bangladesh. The Sri Lanka Ports Authority (SLPA) retains 15% of the equity. The other two box facilities in operation, the state-run Jaya Container Terminal (JCT) and the privately owned South Asia Gateway Terminals (SAGT), are in the inner harbour, and suffer from limited draught (14.25 metres alongside). They can only take vessels of up to 12,000 teu, and cannot accommodate the latest-generation boxships, which have to compulsorily call CICT. Colombo crossed the 7m teu mark in 2018, with CICT contributing 2.60m teu, the state-run Jaya Container Terminal producing a throughput of 2.32m teu, and the privately owned South Asia Gateway Terminals handling 2.1m teu. There has been no progress at all in the past four years at the East Container Terminal (ECT), where the concessionaire was not finalised and the box-handling equipment not ordered, after a quay crane contract with ZPMC of China was cancelled in 2017 on grounds of corruption. There has been a clash of ideologies, with President Maithripala Sirisena wanting the SLPA (Sri Lanka Ports Authority) to operate the terminal, while Prime Minister Ranil Wickremesinghe would prefer the private sector to come in With further strong growth in transhipment cargo predicted for the ongoing year, throughput is getting frighteningly close to the installed capacity of 7.4m teu, although another 1m teu could arguably be squeezed out by maximising the terminals, according to Rohan Masakorala, ceo of Shippers’ Academy Colombo. Notwithstanding the signing of the ECT deal with India and Japan, since it will take at least two years for the terminal to come on stream, Sri Lanka could find the Port of Colombo becoming prey to severe congestion towards the latter part of the ongoing year itself.

China-US west coast rates 6pc down, worse to come with tariffs

PostTime:2019-05-24 07:41:33 View:6

RATES from China to the US west coast continued to drop after a mid-month rates hikes were announced, reports the American Journal of Transportation, quoting a Freightos analysis. Rates were down six per cent last week from $1,555 to $1,445 per FEU. Air cargo searches on WebCargo increased by 35 per cent, said Freightos chief marketing officer Eytan Buchman.  China-US east coast rates were flat at $2,920/FEU. Due to an ongoing drought that's reduced Panama Canal capacity, prices on this lane are still 27 per cent higher than last year. China-Europe prices are at $2,920/FEU unchanged from the previous week. Demand will likely increase before Europe goes on vacation in August, but that should be more than satisfied by new mega ships and the recently added Ocean Alliance loop, said the report.  Supply will continue to be pulled back as more vessels are fitted with scrubbers to conform with IMO's low-sulphur fuel regulations, it said.

Fire-struck 7,510-TEU Yantian Express arrives in Halifax at last

PostTime:2019-05-24 07:40:41 View:4

THE fire-damaged 7,510-TEU Yantian Express has arrived in Halifax, having been diverted to the Bahamas after fire broke out in the hold, reports American Shipper. The Yantian Express was en route from Colombo to Halifax via Suez in January. All 23 crew members were evacuated the following day with no reported injuries.  The Hapag-Lloyd arrived its original destination, said Hapag-Lloyd's THE Alliance partner Ocean Network Express (ONE) in a customer advisory.The ship departed Freeport, Bahamas, where it had been berthed since February 4 for repairs while en route to Halifax from Colombo. Three hundred and twenty of the 3,875 containers aboard were a total loss, Hapag-Lloyd said."Due to the complexity of the discharge operations in Halifax, it is expected that this alone could take up to two weeks," the customer advisory reads. "Therefore, the focus of the operations in Halifax will be to expedite the delivery of cargo."