Baltic index up on rising panamax, capesize rates

Saturday, 13 October 2012 | 00:00

The Baltic Exchange's main sea freight index, tracking rates for ships carrying dry commodities, rose on Friday as rates for capesizes and panamaxes increased.

The overall index, which reflects daily freight market prices for capesize, panamax, supramax and handysize dry bulk transport vessels, rose 2.55 percent to 926 points. The index gained nearly 5 percent this week.

The Baltic's capesize index rose 4.42 percent to 1,914 points.

Average daily earnings for capesizes, which usually transport 150,000-tonne cargoes such as iron ore and coal, were up $703 at $11,074.

In the single voyage market, the average earnings for capesizes are now $14,500 per day, RS Platou Markets analysts said in a note.

"Operators can earn a healthy margin by chartering in vessels and trading spot," RS Platou analysts said.

"While traders such as Cargill were indeed active, the global miners Rio Tinto and BHP Billiton were the main contributors to the rising rates, in our view, as they combined chartered another 6-7 capesize vessels yesterday."

Spot iron ore prices in top importer China steadied on Friday after a rally earlier this week spurred caution among buyers worried that demand in the world's top steel consumer might not rebound significantly. ž

Iron ore shipments account for around a third of seaborne volumes on the larger capesizes, and brokers said price developments remained a key factor for dry freight.

The panamax index rose 3.32 percent to 871 points, with average daily earnings up $221 at $6,937.
Panamaxes typically transport 60,000-70,000-tonne cargoes of coal or grain.

Increasing thermal coal fixtures and grain shipments strengthened panamax rates, analysts said.

Average daily earnings for handysize ships were up $1 at $6,536, while those of supramax ships were down $82 at $8,110.

 
Source: Reuters

ICBC sees Singapore as attractive ship finance hub

Sunday, 14 October 2012 | 00:00

China’s top ship financing bank ICBC is becoming far more exposed to international trades and is looking to grow its base in Singapore having just received a full banking licence to operate in the Lion Republic.

ICBC currently has 30% pure domestic ship finance business, with fully 70% coming from overseas, albeit mainly Chinese conglomerates’ overseas affiliates.

“Most of our ship finance services are international business. Some big Chinese shipping companies, such as COSCO, China Shipping, they also have many multinational business handled by our bank,” an official from the ship finance department of ICBC told SinoShip News. “RMB and US dollar transactions are both ok to us,” he added.

A few days ago, ICBC received its full banking license from Singapore giving it greater access to the Singapore market. “Before we get the license, we already had branches in Singapore providing ship finance services. The new move could help us do better in the region,” the official said. 

Source: Sino Ship News

Ship Operators Jump on Higher Dry-Bulk Rates

Saturday, 13 October 2012 | 00:00

China Shipping Development Co. (1138) and China Cosco (1919) Holdings Co., the nation’s biggest operators of dry- bulk ships, both rose the most in three weeks in Hong Kong trading because of increasing rates for hauling commodities. 

China Shipping advanced 5.8 percent to close at HK$3.48, while China Cosco added 8 percent to HK$3.66. For both companies, it was the biggest gain since Sept. 19. The benchmark Hang Seng Index rose 0.7 percent. 

Charter rates for capesizes have risen 50 percent from lows in mid-September because of increasing demand and customers having to pay more to persuade shipowners to take vessels out of lay-up, Deutsche Bank AG analysts Joe Liew and Sky Hong wrote in a note yesterday. The industry, which will probably post losses for the third quarter, may also have a better year in 2013 because slower capacity growth will revive rates, they said. 

“We are encouraged by the recent pick up in spot dry bulk shipping rates,” Liew and Hong said. Investor interest in the sector is returning “because stocks are so bombed out and rates have started to recover from lows,” they said. 

China Shipping, which also has oil tankers, is the bank’s top pick in the industry because it has lagged behind Pacific Basin Shipping Co. over the past month and has a lower price. It trades about 0.4 times the book value of its assets, compared with about 0.7 times for Hong Kong-based Pacific Basin, the analysts said. Pacific Basin closed up 2.7 percent to close at HK$3.88. 

China Shipping has tumbled 28 percent this year in Hong Kong. China Cosco, which also operates the nation’s biggest container-ship fleet, has dropped 4.2 percent. The Hang Seng Index has risen 15 percent. 

China Cosco’s has also announced plans to cooperate with China Shipping Container Lines Co. on domestic cargo-box routes. CSCL, an affiliate of China Shipping Development, is China’s No. 2 container carrier. 

The Baltic Dry Index (BDIY), a benchmark for global commodity- shipping rates, rose 3.2 percent in London yesterday. It has jumped 37 percent since Sept. 12, when it reached a seven-month low.

 
Source: Bloomberg

Maersk Group Hiking Container Earnings

Sunday, 14 October 2012 | 00:00

Danish industrial conglomerate A.P. Moller-Maersk A/S is targeting to raise the earnings margin of its container shipping arm, Maersk Line, to 5% higher than its peers over the next five years, Maersk Chief Executive Nils S. Andersen said. 
Speaking at the company’s meeting for investors and analysts, Mr. Andersen said Maersk Line, the world’s largest container shipping firm, is ready to assume market leadership on rates, to push up freight rates from a very low level currently and support profitability. 

Maersk suffered from poor rates and a large over-capacity in the market in 2011, and after a brief recovery of rates at the beginning of 2012, rates have plunged again in recent months, not least on the key Asia-Europe trade, which accounts for about 40% of Maersk Line’s total carried freight volumes. 

Maersk has announced it will attempt to push through marked rate hikes this fall, on Asia-Europe of $500 per standard 20-foot container. 

With the focus now on profitability, Maersk aims to grow with the market in the coming five years and thereby keep its current global market share unchanged at about 15%. 

With the expectation of sluggish growth in world trade and continued over-capacity in the shipping market, Maersk will shift its main investment focus to its three other core business areas-oil, drilling services and port operations-resulting in a drop in Maersk Line’s stake in total investments. 

Including Maersk Line, the core business areas accounted for 75% of the group’s investments in 2011, of which 38% were invested in Maersk Line. In the coming five years, Maersk Line’s stake of group investments will decline to between 25% and 30%. 

A gradual shift in the balance between container shipping, currently Maersk’s largest business area, and the other core businesses will serve to bolster the group’s bottom line against the traditionally large degree of volatility in shipping rates going forward, Mr. Andersen said.

 
Source: Manila Bulletin

Tanker market showed signs of recovery last month says report

Saturday, 13 October 2012 | 00:00

The latest monthly report from OPEC, commenting on the tanker markets during the month of September, noted that "global spot fixtures were almost stable to average 17.02 mb/d, up by 0.1% from August and a rise of 7.2% from a year earlier. OPEC fixtures increased in September from the previous month, by 270 tb/d or 2.5%, to average 10.81 mb/d, but showed a drop of 3.7% from the same period a year ago. Middle East-to-East fixtures rose by 11.7% from the previous month, while Middle East-to-West fixtures declined by 34.4%. OPEC sailings were once again almost steady at 23.89 mb/d in September, which was 0.11 mb/d or 0.4% lower than a month earlier, but 5.9% higher than the same month a year ago. Middle East sailings saw a similar monthly decline of 0.14 mb/d or 0.8% to stand at 17.52 mb/d. Crude oil arrivals in North America fell by 0.32 mb/d or 3.3% from the previous month, but rose by 13.4% y-o-y. Far East arrivals dropped by 0.26mb/d or 3% from a month ago, yet saw a gain of 5.3% over the same month last year. Europe and Asia arrivals increased by 0.8 mb/d and 0.17 mb/d, reflecting monthly gains of 7% and 3.9%, yet drops of 8.6% and 5.4% from last year’s levels respectively" it said.

Following months of under-pressure freight rates reaching the lowest levels seen so far this year for several classes in the summer, both dirty and clean sector tanker spot freight rates saw some recovery in September. The decline in freight rates, which had prevailed in recent months, reached rock-bottom levels that could not cover operational costs and thus often made voyages of no interest to the owners. September freight rate gains — though marginal — offered some hope to owners who had been putting up with depressed freight rates for some time. They had been waiting a long time to see an improvement in rates after the losses incurred when freight rates fell below operational cost levels. In September, there was a strong trend from owners to resist the prevailing low rates after they hit low levels which were not acceptable any more, with some owners refraining from fixing their vessels as “last done”. Charterers had to reduce or postpone their inquiries at a certain point, faced with the resistance shown by owners. Another factor which strengthened the owners’ stance towards the rates was the increase in bunker prices which frequently squeezed the daily return to a negative figure, despite of the common practice of slow steaming. Generally in September, the position list remained plentiful for most of the time and vessel delays and replacements were easily covered. The vessel surplus remained the main reason preventing freight rates from improving significantly.

In September, VLCC spot freight rates gained on all reported routes. While these gains, which had been sought by VLCC ship-owners who had suffered from a weak market and depressed rates for a significant period of time, were not big enough, they nevertheless brought some optimism to the VLCC tanker market in general. On average, VLCC spot freight rates rose in September by 9.2% from the previous month to average WS36, although remaining 13% lower than the same month a year earlier.

Rates for VLCC trading on the Middle East-to-East route increased by 8.3%. Similarly, on the West Africa-to-East route they rose by 8.1% from a month earlier, while the Middle East-to-West route saw a greater gain of 12%. Despite these monthly gains, freight rates on all reported routes showed a drop, by 11%, 7% and 22% respectively, from the same month a year earlier. The increase in rates was registered mainly in the first two weeks of the month. The first week of September witnessed a rush of inquiries and fixtures for VLCCs on a scale that had not been seen for some time. The influx of activity had a modest positive effect on freight rates in an over-supplied tonnage market, which limited the outcome to gains of only a few WS points. And the second week of September maintained the gains registered in the first week, despite a lower level of activity which came about with the completion of September cargo-fixing. The ample supply of vessels continued to be the main factor controlling the VLCC rates in September, although the tonnage list was in better condition than what had been seen during the summer.

Following the already low levels in August, Suezmax average freight rates declined by a further 1.8% in September. Spot freight rates for the West Africa-to-US Gulf Coast route ended the month flat, to stand at WS55 points. Suezmax trading in the West Africa market was stable in September, with no improvement from the previous month. West African tonnage demand remained quiet, with a growing list of available vessels. The same applied to the Northwest Europe-to-US route, which dropped by 3.7% from the previous month to WS52 points. In an annual comparison, the two routes dropped by 19% and 4% respectively. Mid-September saw more activity, as October inquiries came alongside a slight improvement in freight rates. Towards the end of the month, the inquiry flow was steady, yet it hardly achieved any rate improvement.

As seen in previous months, the Aframax market in September continued to be oversupplied, with ships remaining idle due to a lack of cargoes and an increase in bunker prices, and this resulted in daily earnings reaching zero in some cases. Aframax saw the weakest performance this month among the dirty sectors. Aframax spot freight rates declined on all reported routes in September, with the exception of the Indonesia-to-East route, which increased by 12.2% from August to average WS101 points, offsetting the drops seen on other routes. Annually, this reflected an increase of 10%. The Caribbean-to-US East Coast fell by 4.3% in September to average WS89 points, despite a fair amount of activity and a reasonable number of inquiries. However, freight rates did not improve, even though the ship list was shorter by the end of September as some vessels were cleared, in addition to the fact that the influence of the hurricane season had been totally absorbed. Rates seen for Aframax in the Caribbean have reached their lowest level in 2012 so far. The Mediterranean to Mediterranean route saw limited inquiries and weak Aframax demand in general. Even the increase in activity in the third week of September had no real tangible effect on rates in the Mediterranean area. Aframax saw less demand to load from Primorsk, due to scheduled maintenance in mid-September.

Nikos Roussanoglou, Hellenic Shipping News Worldwide

New Merchant Navy Law to enter into force in Angola

05 Oct 12 - 19:52

On 27 October 2012 o regulate all maritime and port activities

A new Merchant Navy Law, which seems to regulate all maritime and port activities in a consistent manner, will enter into force in Angola on 27 October 2012.

Among others, the Merchant Navy Law will govern the following matters:

• navigational, technical and security rules applicable to all vessels operating in Angola;
• registration duties and procedures for national and foreign vessels calling in Angolan ports;
• licensing and other requirements applicable to marine- and port-related activities, including commercial activities carried out by ship owners and shipping agents; and
• port administration rules and the legal framework applicable to activities carried out there.

Source: GAC Hot Port News Bulletin, www.gac.com/hpn

Sulphur Limit Bunker Dispute in port of Rotterdam

05 Oct 12 - 18:54

Vessel detained for breaching the North Sea SECA regulations

The UK P&I Club has been made aware of a case concerning an entered vessel which was detained for breaching the North Sea SECA regulations despite receiving bunkers which appeared, according to the bunker delivery note, of being within the required limits.

An entered vessel was detained recently in the port of Rotterdam for burning fuel in the North Sea SECA which had a higher than regulated amount of Sulphur.  The bunker fuel in question was supplied to the vessel by a bunker supplier in a North African port prior to arrival in Rotterdam.

The Dutch authorities carried out a port state inspection of the vessel, including an analysis of the bunker fuel on board.  The results of the fuel analysis found levels of sulphur in the bunker fuel to exceed those permitted under the North Sea SECA regulations.  The vessel was subsequently detained.

The vessel's owner protested the detention on the grounds that the vessel had been sold the bunker fuel under false documentation and sought to expunge the detention from the vessel's record.  The Dutch authorities refused to acknowledge the role of the bunker supplier and rejected the members appeal.

Bunker delivery notes are received in good faith and taken at face value however, in this particular case this has proven to be detrimental to the vessel.

The UK P&I Club would stress the importance of collecting and maintaining meticulous records of all bunker fuel received.  Recording and logging all bunker delivery notes for use in defending any future claims.  Additionally the proper and concise upkeep and maintenance of the Oil Record Book (ORB) is imperative.

For more information, click here

Source: The UK P&I Club

EU asks Greece for clarification on shipping tax system

05 Oct 12 - 19:05

The European Commission asked Greece to clarify the workings of the tax system for its key shipping industry which is run by some of the wealthiest people in the bailed-out country.

"The commission is currently looking at the tonnage tax and has asked for details from Greece," the office of European Competition Commissioner Joaquin Almunia said.

The tax is levied on the tonnage a ship carries in place of a tax on the shippers' profits, reportedly to the great advantage of Greece's shippers and undercutting state income from one of the country's prize economic assets.

The system was set up in 1953 when the Greek shipping industry, one of the largest in the world, was rebuilding after World War II.

Greek press reports said earlier that the Commission request was driven by pressure from Germany whose shippers are losing market share.

The Commission denied that was the case, saying it was part of an investigation to ensure that competition rules on the shipping industry were being respected across Europe.

Greece has until October 30 to reply.

Greek firms control 16.2 percent of the world's "deadweight tonnage" shipping capacity, followed by Japan with 15.8 percent, with the industry accounting for around 6.0 percent of the country's economic output.

Source: AFP

Ship captain, crew members charged for alleged illegal oil bunkering

05 Oct 12 - 14:06

Economic and Financial Crimes Commission, EFCC, yesterday, charged a ship captain, Musa Mohammed and four of his crew members, before a Federal High Court sitting in Lagos, on a four-count charge of alleged illegal dealings in petroleum products.

The accused persons, Captain Musa Mohammed, Otuagoma Freeborn, James Onubi, Hassan Adekunle, Gabriel Edet Inyang and Patrick Chinedu were arrested on board a vessel M.T Takoradi, with 942.200 litres of diesel without appropriate licence required under the Petroleum Act.
The 5th accused person, Gabriel Inyang, was, however, absent in court.
The matter is before Justice Okechukwu Okeke.

The accused pleaded not guilty to the charge. Thy were alleged to have, on January 26, 2012, been accosted aboard a vessel M.T Takoradi, within Nigerian territorial waters, with one million litres of diesel on board. The accused persons were unable to give a reasonable explanation about the source of the deisel and without any clearance by Nigerian Navy authorities in charge of authorising vessels conveying petroleum.

It was learnt that Navy personnel, upon suspicion that the vessel might have been involved in acts of illegal bunkering and economic sabotage, arrested and detained the vessel and crew on board.

The court, while adjourning the matter till October 11, 2012, ordered that the accused be remanded in prison custody.

Source: Vanguard

Shell Begins Beaufort Sea Drilling Off Alaska s North Coast

05 Oct 12 - 13:37

Beaufort drilling started Wednesday

Shell Oil says it has begun exploratory drilling in the Beaufort Sea off Alaska's north coast as it continues to drill in the neighboring Chukchi Sea.

Shell Alaska spokesman Curtis Smith says Beaufort drilling started Wednesday after the end of an Alaska Native whale hunt.

Smith says the company hopes to drill until the seasonal Oct. 31 deadline.

Shell announced last month it would limit drilling this year to non-petroleum zones.

The company can't drill into those zones until its spill response barge is in place, and Smith says that won't happen this year.

A containment dome on the barge was damaged in tests last month.

Royal Dutch Shell PLC has spent $4.5 billion on Arctic offshore drilling, moving ahead in spurts to overcome court challenges and scrutiny.

Source: Huffington Post