Thursday, January 12, 2012

ITF newsletter on the economic crisis

ITF newsletter on the economic crisis

Link to Economic Crisis Newsletter

Company shorts - 12 Jan. 12

Posted:

Wan Hai Lines saw its corporate debt and unsecured bond ratings downgraded by Moody's, which estimates the debt of Taiwan's container line will soar at US$2.3 billion.

Norwegian shipping company SinOceanic has taken delivery of three 13,100 teu container vessels, all having 15-year charters agreements with the Mediterranean Shipping Co.

The Containerised Freight Index from the Shanghai Shipping Exchange showed an increase in sport rates from Asia to the US, Northern Europe and the Mediterranean.

Mediterranean Shipping Co is to extend its cooperation with the UK rail operator Freightliner after moving its services to the new berths at Felixstowe.

German lender HSH Nordbank confirmed the cancellation of its US$500 million loan agreement with China Development Bank after being downgraded by Moody's in November last year.

Three South Korean shipbuilders - Hyundai Heavy Industries, Daewoo Shipbuilding & Marine Engineering and Samsung Heavy Industries - are discussing a €1 billion (US$1.27 billion) joint bid for the French group Gaztransport & Technigaz, specialised in cargo systems for liquefied natural gas carriers.

Sources: Lloyd's List, International Freighting Weekly, The Financial Times, 11-12 January 2012

Bidding plans for SeaFrance's assets

Posted:

Several companies have expressed an interest in buying the ships of the cross-Channel ferry operator SeaFrance, which was put into liquidation with debts of €180 million by a French commercial court. Dubai-based P&O Ferries and Channel Tunnel operator Eurotunnel are considering bids. Danish ferry operator DFDS and French partner Louis Dreyfus Lines have announced plans to hire 300 SeaFrance workers and launch a new cross-Channel service. Three passenger ferries and a freight vessel were valued at €248 million in 2010, when SeaFrance was placed into administration. However, the market value could be much lower for the auction that has to be advertised by BTSG, a French legal firm in charge with the liquidation of SeaFrance. France's state-owned railway operator SNCF, the owner of SeaFrance, is to pay redundancy packages to all permanent employees of SeaFrance, and some of them are to be offered jobs in the railway group.

Sources: Lloyd's List, International Freighting Weekly; 11 January 2012

Warns of overcapacity and cut-throat competition

Posted:

Frankfurt-based DVB Bank has predicted a challenging year 2012 for the shipping industry amid fears of a new recession in many countries. Expected delivery of mega-ships and an exacerbating competition will bring more pressure on rates than in 2011. With a shipping portfolio of €10.4 billion last year, DVB Bank is more cautious now and says it will focus on risk management. Drewry Shipping Consultants has warned that some carriers with fleets below 8,000 teu could experience cash flow problems, as a growth in demand is forecast only in the emerging markets. Global shipping alliances with large vessels may also face tough choices later this year.

Sources: Lloyd's List, International Freighting Weekly; 11 January 2012

Aframax and panamax rates fall

Posted:

The year 2012 has started with declining spot rates for cross-Mediterranean and trans-Pacific trades. The Baltic Exchange reported a plunge in the Mediterranean aframax charter market following an overcapacity of aframax vessels. Brokers say that shipowners are worried about rates dropping below the W100 threshold. The Baltic Sea and the North Sea have been the most profitable aframax markets. As several newbuildings are planned to be delivered in January, owners of panamax vessels saw Pacific round voyage rates plunging to levels just above the operating costs. The freight indices for Atlantic round voyages and Atlantic to Asia continue to decline, according to the Baltic Exchange.

Source: Lloyd's List; 11 January 2012

Record year for China's ports

Posted:

Several container ports in China have achieved record throughputs last year in spite of losses expected by container shipping companies. Shanghai, the largest box port in the world, handled 31.7 million teu last year, up 8.5 per cent on 2010. The port of Dalian, which reported an annual 20 per cent surge in volumes to 6.4 million teu, is targeting a 10 million teu throughput over the next three years. Chinese ore imports have increased 11 per cent in 2011 to 64.1 million tonnes, but steel production has been shrinking and contributed to a declining capsize spot market. The year 2011 ended with a slowdown in China's imports and exports, although the levels of growth were still above those recorded in Europe.

Source: Lloyd's List; 11 January 2012