AlmanLoong

Saturday, March 11, 2006

Orient Overseas (International) Ltd, a shipping firm controlled by former chief executive Tung Chee-hwa's family, says profit slid 2.9 percent last year and its executives warn that industry supply may outstrip demand in the future.
Net income slipped to US$650.9 million (HK$5.08 billion) from US$670 million in 2004, below the US$664.6 million forecast in a poll of 10 analysts by Thomson Financial.

Turnover increased by 13.4 percent to US$4.69 billion, and OOIL cut its final dividend to 15 US cents from 16.36 US cents.

OOIL, which mainly runs routes from China and Southeast Asia to Europe and North America, said it carried 3.5 million 20-foot container boxes in 2005, up 8 percent from a year earlier.

"As we enter this period of supply- side growth potentially outpacing the demand side, industrial load factors may indeed fall below the high nineties," chairman Tung Chee-chen said. "However, much remains uncertain as consumer confidence and retail sales demand remain fairly buoyant in the [world's] major economies and the forecasts for global GDP growth remain healthy," he added.

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(LONDON) The cost of shipping crude oil from the Middle East to Asia on 2 million-barrel tankers, little changed for a second week, may fall as charterers wait for Persian Gulf producers to release loading dates of April exports.

Most oil exported from Middle East suppliers such as Saudi Arabia, the world's largest, and Iran is sold on annual contracts. Producers release dates of when cargoes are scheduled to load on tankers a month in advance so buyers can make shipping arrangements.

'Most of the dates for April cargoes will be out towards the end of the week so I doubt that we will see much demand for tonnage before then,' said Christian Arentz Grastvedt, a broker at Johan G Olsen Shipbrokers in Kristiansand, Norway.

'Besides, charterers are not rushing to book before getting the dates and there are enough ships to meet demand anyway.'

There were no bookings for very large crude carriers, or VLCCs, on the benchmark route to Japan or the US yesterday, according to shipbrokers' reports.

Rates, measured in the market's Worldscale point standard, were on Monday assessed to Japan at WS 87.5, or US$1.75 a barrel, according to data compiled by Bloomberg. To the US, rates were yesterday at WS 87.5, or US$2.65 a barrel.

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(BEIJING) China State Shipbuilding Corp is considering raising capital to help fund some US$2 billion in planned shipyard construction.

The world's third-largest shipbuilder secured orders for 8.56 million deadweight tons (dwt) in 2005, taking orders on its books to 17 million dwt worth 100 billion yuan (S$20.2 billion) and filling its slate until 2009, spokesman Chen Xiaojin told Reuters.

Now, the company may sell additional shares in mainland-listed units - such as Hudong Heavy Machinery Co Ltd or Jiangnan Heavy Industry Co Ltd - or initiate 'a massive capital exercise' to bankroll some US$2 billion of planned yard construction.

It is also open to foreign investment, though Mr Chen would not elaborate. Despite predictions that the global shipping cycle had peaked and demand could slow, Mr Chen said that he was optimistic.

'Our main yards are fully booked until 2009. We remain upbeat on the outlook for this year,' he said, declaring that demand 'in the shipbuilding industry remains strong, domestically and internationally'.

China's enormous appetite for energy and bulk mineral resources has spurred carriers around the globe to expand fleets.

Spillover orders from China poured into yards around the region, helping fuel a sector revival in countries such as Singapore, where shipbuilding had been considered a sunset industry as shipping lines sent more business to lower-cost yards in China, India and the Middle East.

China State Shipbuilding is the world's top builder of ocean-going vessels after Hyundai Heavy Industries Co and Japan's Imabari Shipbuilding Co Ltd, as ranked by capacity, according to shipbrokers Clarkson plc.

South Korea and Japan control about 70 per cent of the global shipbuilding market, with China and the European Union roughly splitting the remainder, state media say.

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March 27 (Bloomberg) -- Goldman Sachs Group Inc., Singapore and a Canadian pension fund said they may make an offer for Associated British Ports Holdings Plc, in what would be the third takeover of a U.K. port operator in four months.

Shares of London-based Associated British Ports, the biggest operator of ports in the U.K., rose as much as 55.5 pence, or 8 percent, to 751.5 pence, a record, and were up 2.2 percent at 2:10 p.m. in London, after Goldman Sachs said in a statement that it may bid with other investors.

Associated British Ports, which owns 21 ports in the U.K. and handles car imports at four U.S. ports, has a market value of 2.2 billion pounds ($3.9 billion). Dubai's DP World in March bought Peninsular & Oriental Steam Navigation Co., the U.K.'s oldest port company, for $6.8 billion, and was later forced to sell U.S. operations because of lawmakers' national security concerns.

``Associated British Ports has got an asset base in the ports, a security of income and a consistency of income,'' said Alastair Gunn, an analyst in London at Arbuthnot Securities. ``That will allow an infrastructure buyer to borrow and generate income for its investors.''

Goldman may bid as part of a group including Borealis Infrastructure Management Inc., a unit of the Ontario Municipal Employees Retirement Fund, Canada's No. 4 pension fund; and GIC Special Investments, the private-equity unit of GIC, an investment company owned by the government of Singapore.

``The consortium's considerations are at a preliminary stage and there can be no assurance that any offer will be made,'' the investment group said today in a statement. Associated British Ports said in a statement that it hasn't received any proposal.

http://quote.bloomberg.com/apps/news?pid=10000006&sid=aUlliIayFhDY&refer=home

SINGAPORE) Oil tanker rates could fall by as much as 25 per cent this year as the global tanker fleet grows faster than oil shipments, the head of Clarkson Research said yesterday.

The oil tanker industry is at a turning point according to Martin Stopford, Clarkson's managing director. The industry has had 'a wonderful few years, but now it is time to look at the big picture and find out where it is going,' he said at the annual meeting of the International Association of Independent Tanker Owners (Intertanko) in Singapore.

Rates for hiring tankers peaked in the second half of 2004 at an average across all vessel sizes of nearly US$43,000 per day, as strong oil demand from the US and China buoyed the industry.

But three years of investment - totalling nearly US$66 billion - in new vessels with delivery dates through 2009 have set the stage for a return of surplus vessel tonnage that plagued the industry for nearly 35 years until the boom in recent years created a tight market situation.

At the height of the oil crisis of the 1970's there was nearly a 35 per cent surplus of tankers which dropped to 15 per cent in the 1980s and 1990s before finally narrowing about three years ago.

The global fleet of tankers grew by 7.7 per cent in 2005, according to Mr Stopford, who forecast it would grow by 5.1 per cent in 2006, ahead of the average 4 per cent growth in cargo volume. He noted that the tanker industry largely had the container shipping sector to thank for tying up shipyard berths well into 2009, otherwise there would have likely been a far larger amount of tanker tonnage entering the market.

Overcapacity in the liner industry is also exerting downward pressure on freight rates.

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April 6 (Bloomberg) -- Dalian Port Co., operator of China's biggest crude oil terminal, plans to raise about $240 million in a Hong Kong stock sale this month to expand its container berths and relocate oil-handling facilities.

The company plans to market 840 million shares, or 30 percent of its stock, to investors from April 10, aiming for trading to begin in Hong Kong on April 28, according to a sales document obtained by Bloomberg. BNP Paribas and UBS AG are arranging the sale. BNP's Hong Kong spokeswoman Christine Chan and UBS spokesman Mark Panday both declined to comment.

State-owned Dalian Port is raising funds for a 4.1 billion yuan ($512 million) expansion plan, as China's economic growth increased imports of oil, iron ore and exports of manufactured toys, textiles and appliances. Container cargo at the harbor in northeast China rose 20 percent last year to 2.65 million boxes, Port of Dalian Authority said on its Web site.

``The government's efforts to build a strategic oil reserve in Dalian will fuel Dalian port's oil terminal business,'' said Zhu Yuansong, a shipping analyst at United Securities Co. in Shanghai. ``Dalian port is also expected to see steady income growth from its container shipping business.''

The port, which owns ventures with Singapore's PSA International Pte and other companies, was China's eighth largest by container traffic last year, according to Containerisation International's Web site. Dalian now has 80 berths for handling cargo boxes, oil, coal and other cargo. An estimated 80 percent of global trade is carried by sea.

Dalian Port operates China's biggest crude oil terminal with a capacity of 300,000 metric tons, the authority said. China, the world's second-largest oil user after the U.S., imported 126.82 million metric tons of crude in 2005, 3.2 percent more than the previous year.
http://www.bloomberg.com/apps/news?pid=10000080&sid=aei9_BGZzx8U&refer=asia

(SINGAPORE) Shipping investment trusts are going to become more commonplace as shipping companies increasingly move away from unproductive price-earnings and net asset valuations, according to the head of German-controlled finance company First Ship Lease (FSL) Ltd.

While most businesses are valued on a PE basis, shipping firms' PE-based valuations 'historically are terrible and very unattractive', said FSL president and CEO Philip Clausius.

The other common valuation method is net asset value, or in other words, what the ships are worth in the market today.

'That's not very attractive either because if you are only getting from the public market what you can fetch in a private sale, why be public in the first place - there's no arbitrage.'

In an effort to remedy this, finance managers have tried to create high-dividend paying vehicles which are then valued on their dividend, or yield, as opposed to the steel or accounting earnings.

This separates asset ownership from asset management and 'the theory behind it is that by separating these two, the sum of the valuation of these two parts is greater than the integrated company'.

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(BANGKOK) Precious Shipping, Thailand's largest shipping firm, said yesterday that the next two years would be challenging as rising supply put pressure on freight rates despite demand from steady growth in global trade.

However, growing demand from China, India and Middle East, should help the worldwide shipping industry sail through the rough seas until supply decreased, managing director Khalid Hashim told Reuters.

'The main driver is China, but we also have India and the Middle East where economies are doing quite well. A lot of construction is going on. Demand is quite strong,' he said.

Global dry bulk freight rates have fallen more than half since peaking in December 2004 and analysts say that the sector is facing a cyclical downturn after a longer-than-expected boom. That was driven by robust global trade fuelled by China's imports of raw materials and tight supply.

Mr Hashim said that his firm's business this year and next might look disappointing compared to the last two years, but would still be good.

'I think 2006 and 2007 will be challenging years when compared to 2004 and 2005 but we'll still make a lot of money when compared to 2003 and before,' he said. 'We are in a supercycle, which comes once maybe in a hundred years.'

Mr Hashim gave no profit estimate, but 10 analysts polled by Reuters Estimates expect earnings to fall 30 per cent to 4.3 billion baht (S$182 million) from a record 6.18 billion baht in 2005.

Profits are expected to fall to 3.5 billion baht in 2007. They rose 30 per cent in 2005 after three-fold rises in 2004 and 2003.

The company's average freight rates are likely to drop to US$9,000-11,000 per ship per day this year from US$14,449 last year and US$13,248 in 2004, Mr Hashim said.

But its long-term contracts, now accounting for 24 per cent of capacity at an average rate of US$12,200 per ship per day, should help lessen volatility, he said.

Average operating costs should be US$3,150 per ship per day this year, up slightly from US$3,055 last year, as the firm passed on fuel costs to customers, he said.

The Precious counter, trading at the lowest price to earnings of 2.4 times among Thai shipping lines, has fallen 7 per cent so far this year - after a 20 per cent drop in 2005 - underperforming an 8 per cent rise on the SET index. - Reuters
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BEIJING) China plans to expand total sea port capacity by at least 80 per cent to about 7.5 billion tons by the end of 2010, as trade rises in the world's fastest growing major economy.

'We will speed up building infrastructure in the next five years and focus on expanding container ports in Shanghai, Tianjin and Dalian,' said Zhang Shouguo, deputy general director of the water transport department at the Ministry of Communications, yesterday in Beijing.

Shanghai, Tianjin and other Chinese ports have seen surging freight demand as exports from the world's third-largest trading nation have nearly tripled since 2001, reaching US$762 billion last year. About 80 per cent of global trade is moved by sea.

Shanghai, China's premier financial city, surpassed Singapore as the world's biggest cargo port in terms of total throughput last year. Cargo volume rose 17 per cent to 443 million tons in 2005, Shanghai's port authority said in January.

Total throughput of the country's inland and sea ports is expected to rise by half from last year to 7.2 billion tons in 2010 with container throughput to rise by 72 per cent to 130 million standard 20-foot containers, Mr Zhang said.

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(KUALA LUMPUR) Asean ports should be prepared to keep pace with the infrastructure and resources required to support greater trade with China, or risk being left behind in capitalising on its prosperity. Maritime Institute of Malaysia (MIMA) research fellow Nazery Khalid said that spurred by growing trade with China, regional ports have expanded their infrastructure, ancillary services and activities to enhance their competitive edge to attract and facilitate rising cargo throughput in and out of China.

Speaking at the 3rd Trans Asia 2006 China conference in Dalian last week, he said that among the prepared ports were Malaysia's Port Klang, Singapore Port and Thailand's Laem Chabang.

Following that speech, Mr Nazery was quoted in a MIMA statement as saying that the 'China factor' had resulted in investments and development of all sorts of infrastructure to support the explosion in trade with the country.

'Port development in Asean has benefited from the spillover from greater trade between the region and China,' he said.

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SINGAPORE) Softening freight rates and rising fuel costs were behind a 38 per cent drop in first quarter net profit of Thai-listed feeder line Regional Container Line (RCL). Net profit fell to 811.7 million baht (S$33.81 million) in the three months ended Mar 31, from 1.3 billion baht a year earlier, the company said yesterday.

Bunker fuel now represents the highest single cost element, according to RCL. The cost of freight and operations rose 19 per cent in the first quarter to 3.98 billion baht.

Container liftings rose 8 per cent to 575,279 TEUs, with the group's carrier-owned Container (COC) liftings up 15 per cent to 291,108 TEUs and its shipper-owned container (SOC) liftings up a modest 2 per cent to 284,171 TEUs.

RCL said intra-Asia freight rates have been under pressure since the final quarter of 2005 as more vessel tonnage cascaded into the trade, coinciding with the beginning of the traditional slow season.

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HONG KONG) Shanghai International Port (Group) Co, the operator of China's busiest port, handled a record number of containers in April, helped by the nation's rapidly expanding trade.

Cargo volume rose 17 per cent from a year earlier to 1.78 million standard 20-foot containers last month, China Merchants Holdings (International) Co, which owns 30 per cent of the port operator, said on its website yesterday.

China is selling more computers, toys and other goods to the US and Europe, boosting the amount of cargo shipped through its sea ports including Shanghai and Shenzhen.

The nation's exports rose 27 per cent in the first quarter.

Shanghai International handled 6.37 million containers in the first four months of the year, an increase of 16 per cent, China Merchants said.

The state-controlled Shanghai International Port is expanding capacity to meet rapidly rising demand. It is an investor in the US$16 billion Yangshan port, which is expected to double Shanghai's cargo capacity by 2010 to bring it close to becoming the world's busiest container harbour.

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LONDON) The worldwide oil tanker fleet will exceed demand during the next three years amid a record expansion of ship capacity, according to predictions by Citigroup Inc. New crude oil production will fail to absorb a record rise in shipping capacity, of which about 100 million deadweight metric tons is now on order, Citigroup said in a report, citing its research and London shipbrokers Clarkson.

'The fleet is set to grow by at least 25 per cent in the next three years as the order book is pretty much set,' and high returns on operating tankers discourage ship decommissioning, analyst John Kartsonas said. - Bloomberg
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(LONDON) The cost of shipping two million-barrel cargoes of crude oil from the Middle East may fall from a seven-week high as oil companies start to hire tankers for loadings after June 10, when the supply of vessels improves.

Rates for Persian Gulf-Japan on May 18 reached WS 72.43, as measured in Worldscale points, and were little changed the following day, according to Baltic Exchange prices. Rates for Persian Gulf to US Gulf Coast tankers also rose to a seven-week high of WS 70.42.

'In the longer run, it will be difficult to hold onto the higher rates,' said Per Mansson, a broker at Olso-based Nor Ocean shipbrokers. 'In the second half of June the availability looks better.'

The rate for hauling a cargo from the Persian Gulf to Japan currently is in the low WS 80s, according to Christian Arantz Grastvedt, of Oslo-based shipbrokers Johan G Olsen. For a longer shipment to US Gulf Coast refineries, the rate is at about WS 70, he said.

The rates are for modern, double-hull tankers with two layers of steel separating the cargo from the sea. Mr Arantz Grastvedt said older, single-hull tankers, which have a higher risk of spillage in the event of a collision, would be about 10 Worldscale points less.

Worldscale points are a percentage of a nominal rate, or flat rate, for a specific route. Flat rates, quoted in US dollars a metric tonne, are revised annually by the Worldscale Association, based in London and New York, to reflect changing fuel costs, port tariffs and exchange rates.

The supply of ships has also been bolstered by 'one or two Japanese and Korean' oil companies that were 'hiding' their ships last week but have now made them available, Mr Mansson said.

At rates of WS 70, owners of modern supertankers can earn about US$36,136 a day for the 64-day round trip between the Persian Gulf and the US Gulf Coast, based on a formula by R S Platou, an Oslo-based shipbroker, and Bloomberg bunker prices. - Bloomberg
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(NEW YORK) Panamax rates for hauling grains and dry bulk cargoes remain robust even though more new ships are expected to join the active fleet this year, brokers said on Friday.

The number of Panamax new ship orders to be delivered in 2006 was pegged at 112, compared with 92 in the previous year, according to some major brokers.

Of the total, 57 would be delivered in the first half of this year, 51 in the second half and four unknown.

'The unsatiable demand is swallowing all new tonnages coming into the market,' a broker in London said. Panamax rates for South American loading were hovering at US$20,000-21,000 a day for the past several weeks, and rates for loading on US Gulf Coast were at US$17,000-17,500 a day.

In May, some brokers had expected the rates to dip as more new ships join the active pool, but the rates were propped up by resilient demand and strong freight derivatives values.

About 10 new Panamaxes were expected to join the active pool in June, compared with six in May and nine in April.

'It is not a big jump on a month-to-month basis, but the year-on-year comparison is more significant,' the broker said.

Some brokers in the United States said demand for Panamaxes was stronger than expected due to bad sailing weather in Asia and strong Chinese demand for commodities.

'There is a strong demand for steel, iron ore and grains from China, and China is also exporting a lot of coal and cement raw materials,' another broker said.

'The rates will dip only when those demands will level off.'

Also, the typhoon season in Asia typically begins in May.

Despite the strong demand fundamentals, some brokers expressed concerns about the growing order book for new ships.

So far this year, the order book for all new ships, including pressurised gas vessels, oil tankers, container ships and dry bulk carriers, is at a record high of 250 million deadweight tonnes, compared with 230 million deadweight tonnes last year.

'The vessel supply side looks to be bearish for the long term, but the question mark remains on whether the strong demand will sustain,' he said. - Reuters
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LONDON (AP) -- A takeover battle erupted for Associated British Ports Holdings PLC on Thursday as a consortium led by investment bank Goldman Sachs Group Inc. raised its offer and a rival group led by Australia's Macquarie Bank Ltd. made a bid at the same level.

Both consortiums announced offers valuing the ports company at nearly 2.6 billion pounds ($4.8 billion).

AB Ports, which owns 21 ports across Britain including Grimsby and Hull, as well as a 49 percent stake in the Southampton container port, had rejected Goldman Sachs' bid of 730 pence ($13.44) a share in March.

Goldman Sachs' Admiral consortium was the first to reveal it had raised its bid to 840 pence ($15.46) per share, just a day after it had reached agreement with AB Ports for a takeover at 810 pence ($14.90) per share.

The move was interpreted as an attempt to stave off a rival bid from a consortium including Australia's Macquarie Bank Ltd. and the British 3i Group PLC.

However, AB Ports later said it had also received a pre-conditional proposal from the Macquarie consortium indicating a cash price equivalent to the Goldman Sachs offer.

"The board is currently evaluating the Macquarie consortium's proposal in light of the revised cash offer from Admiral," it said.

AB Ports shares jumped 5.1 percent to 869 pence ($16.06) on the London Stock Exchange.

Speculation about a counterbid began Wednesday when Dresdner Kleinwort Wasserstein jumped into the market and began buying AB Ports shares.

Also in the rival consortium are the Canada Pension Plan Investment Board and Australia's Industry Funds Management.

Port operators have become attractive takeover targets of late due to their stable income streams, large property portfolios and buoyant shipping markets on the back of growth in Chinese trade flows.

http://biz.yahoo.com/ap/060615/britain_ab_ports.html?.v=5

June 21 (Bloomberg) -- FedEx Corp., the No. 2 U.S. package shipping company, said fourth-quarter profit rose 27 percent as global economic expansion fueled demand for deliveries.

Net income in the quarter ended May 31 increased to $568 million, or $1.82 a share, from $448 million, or $1.46, a year earlier, the company said today in a statement. FedEx forecast profit this quarter of $1.45 to $1.60, exceeding the average estimate of $1.43 from analysts surveyed by Thomson Financial.

FedEx is taking advantage of growth in China, the world's fastest-expanding economy, by buying out its Chinese joint- venture partner, constructing a new shipping hub and hiring workers. FedEx's international shipments by air rose 6 percent in the quarter.

``The Trans-Pacific route is FedEx's dominant lane, and they had strong growth there,'' Donald Broughton, an A.G. Edwards analyst who rates FedEx ``buy,'' said in an interview. ``Their international model is made to take advantage of growing Asian- U.S. trade.''

The International Monetary Fund expects global economic growth of 4.9 percent this year, at almost its fastest pace in three decades. Memphis, Tennessee-based FedEx and larger rival United Parcel Service Inc. benefit as economic expansion feeds manufacturing, trade and retail sales.

Profits also rose on surcharges that helped offset a 28 percent increase in spending for fuel and a rate increase implemented at the start of the year. Sales rose 10 percent to $8.49 billion.

FedEx shares rose $1.68, or 1.6 percent, to $110 at 8:28 a.m., before the regular open of the New York Stock Exchange.
http://www.bloomberg.com/apps/news?pid=10000103&sid=azVorzWRhYTw&refer=us

THE cost of shipping crude oil from the Middle East to Asia on two-million-barrel tankers held at a 20-week high as violence in the Middle East spurred refiners to stock up on crude.
http://business-times.asiaone.com/shippingtimes/

By DONALD URQUHART

(SINGAPORE) The escalating conflict between Israel and Lebanon-based Hezbollah militants is increasingly being felt by the shipping industry as ports close, insurance rates climb and maritime employers and unions declare the area a 'warlike operations zone'.

The International Bargaining Forum (IBF), a grouping of maritime employers and unions which negotiates the pay and working conditions for seafarers on a large portion of the global open-register fleet, has declared the area off Lebanon and parts of Israel a warlike operations zone (WOA) entitling seafarers to special rights.

This means crew on ships run by IBF members can ask not to enter the area, and if they do, are entitled to double their normal rates.

The agreement between employers and global union, the International Transport Workers' Federation (ITF), will potentially affect thousands of seafarers on open-registry ships run by members of the International Maritime Employers' Committee (Imec), which represents employers at the bargaining forum.

Effective from July 21 and due for review on August 2, the agreement covers the sea area off the coast of Lebanon that is covered by Israel's sea blockade, including the ports of Beirut and Tripoli - which have been effectively closed since the start of the Israeli blockade on July 13 - along with the approaches to the Israeli port of Haifa.

This agreement comes shortly after the UK Chamber of Shipping agreed to the same conditions for crews of British-flagged ships following lobbying by ITF-affiliate union Numast.

Steve Cotton, Secretary of the ITF's Special Seafarers' Department, said: 'With one vessel already caught in the crossfire of a ship to shore battle there was an urgent need to get the provisions for war into place - the right to disembark without facing disciplinary action, and to earn danger money for time spent in the war zone.'

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ATLANTA (AP) -- UPS Inc., the world's largest shipping carrier, reported Tuesday a 7.6 percent increase in second-quarter profit on strong sales gains. But the results fell short of Wall Street expectations, and the company warned that its full-year earnings growth will be at the low end of its original forecast. UPS shares fell 8 percent in premarket trading.

http://biz.yahoo.com/ap/060725/earns_ups.html?.v=5

STRONG global economic growth, rising steel prices and no let-up in buying from China pushed raw materials sea-freight prices to 14-month highs on Monday, defying analysts' predictions of a downturn.

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LONDON) Frontline Ltd, the world's second-biggest oil tanker company, said second-quarter profit slumped 46 per cent as earnings declined for its older one-million-barrel tankers and it sent more ships for routine repair work.

Net income dropped to US$68.6 million from US$127.5 million a year earlier, Frontline said yesterday in a statement. The company said it expects earnings to improve next quarter and announced a US$1.50 a-share dividend.

Frontline, led by Norwegian billionaire John Fredriksen, has failed to earn as much as rivals from its one-million-barrel ships, or suezmaxes, because almost half have single-layer hulls. Companies such as Exxon Mobil Corp, BP Plc and Total SA have begun shunning such ships before an international ban, in favour of safer double-hull vessels. Earnings also fell as the company brought forward vessel maintenance, or dry-docking.

'The results were largely on the weak side,' said Arne Egil Roenning an analyst at Oslo-based Fondsfinans AS. 'That is mainly due to the dry-docking and the suezmaxes. The dividend was high and that was a bullish thing from Frontline.'

The median forecast of seven analysts surveyed by Bloomberg News was for second-quarter profit of US$91.3 million.

Most single-hull tankers are scheduled to be banned by the United Nations' Maritime division from 2010, with all of them abolished by 2015, because of their higher spillage risks.

Frontline's 26 suezmaxes earned about US$16,000 a day less in the quarter than Stamford, Connecticut-based OMI Corp, the second-largest US-based tanker owner, whose fleet is comprised entirely of double-hull vessels. That compares with a difference of about US$8,000 a day last year.

'Given that OMI made US$45,500 a day this past quarter, Frontline has underperformed this time around,' said Mr Lanier. 'The income shows an increased differential in earnings between single- and double-hull tonnage,' Frontline said.

Frontline said it will look at other uses, such as oil storage, for its single-hull tankers, in order to extend their lives. As many as seven will be converted into heavy-lift ships that transport oil rigs and rig parts from shipyards to oil fields, said Rikard Vabo, an analyst for Fearnley Fonds in Oslo.

'If we see more conversions of these single-hulls, they are not going to be able to keep the same pace on dividend payouts because of the capital expenditure required,' Mr Vabo said.

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(ATHENS) Greece, the world's biggest ship- owning nation, expanded its fleet in the past year as demand grew for the vessels needed to carry everything ranging from oil to computers.

Registered tonnage rose 4 per cent to about 32.7 million tons in the 12 months through the end of July, from about 31.3 million a year earlier, the Athens-based Merchant Marine Ministry said in a statement last week.

Almost 3.2 million tons were added and about 1.8 million tons removed.

The average age of ships registered under the Greek flag was four years compared with 21 years for vessels removed, the ministry said.

Demand for shipping is being fuelled by a boom in China, whose economy is expanding at more than five times the rate of the nations sharing the euro.

Greek shipowners more than doubled spending on vessels to 2.6 billion euros (S$5.2 billion) in the first half, according to central bank data.

Greek shipowners had ordered 118 new vessels in the first half for a total of US$6.7 billion, compared with 62 orders valued at US$2.7 billion a year earlier, Piraeus, Greece-based shipbroker George Moundreas & Co had said on July 13.
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Aug. 31 (Bloomberg) -- Evergreen Marine Corp., Asia's largest container shipping company by fleet size, unexpectedly had its first quarterly loss in three years, because of lower freight rates and losses from investment.

Net loss was NT$1.16 billion ($35 million) in the three months ended June 30, compared with a profit NT$3.19 billion a year earlier. The loss was the first for the company since the second quarter of 2003. The figure was derived by subtracting first-quarter profit from six-month earnings the Taipei-based company released today.

Evergreen Marine, the first among major Asian container lines to post a quarterly loss this year, and competitors such as Neptune Orient Lines Ltd. and Hanjin Shipping Co. are struggling from surging fuel costs and falling freight rates due to an increase of vessels. Evergreen Marine's sales in the three months to June fell 16 percent as competition ends five straight years of rate increases.

``It was prices being cut,'' said Charles Hsu, who doesn't own Evergreen Marine stock among the $700 million he helps manage at First Global Investment Trust Co. in Taipei. ``Still, the number was a surprise, probably because of losses from investment.''

Evergreen booked investment losses of NT$1.76 billion in the first half of the year, compared with NT$1.3 million a year earlier, it said in a filing to the Taiwan Stock Exchange today, without elaborating.

The median forecast in a Bloomberg News survey of four analysts was for a second-quarter profit of NT$1.61 billion. None of the analysts estimated a loss. Sales in the period fell to NT$9.11 billion, according to the company's monthly filings to the Taiwan Stock Exchange.
http://www.bloomberg.com/apps/news?pid=20601080&sid=aU.NndVTRg1w&refer=asia

Sept. 7 (Bloomberg) -- Cosco Pacific Ltd., Asia's third- largest port operator, said first-half profit fell a more-than- expected 37 percent on lower earnings from its terminals and expenses related to an affiliated container maker.

Net income dropped to $136.4 million, or 6.1 cents a share, from $214.8 million, or 9.7 cents, a year earlier, the Hong Kong- based company said in a statement today. That was lower than the median forecast of $205 million in a Bloomberg News survey of four analysts.

Cosco Pacific's earnings from managing ports fell 14 percent, after volume in Hong Kong declined and its Belgian terminal made a loss. The company also had a $64.3 million cost related to a promise to buy shares in its affiliate China International Marine Containers (Group) Co., also called CIMC.

``The CIMC expense was a surprise,'' said Zhang Xi, an analyst at UOB-Kay Hian Ltd. in Hong Kong. ``Port earnings were dragged down by Cosco-HIT in Hong Kong, because of disruptions to operations,'' said Zhang, who has a ``buy'' rating on Cosco Pacific stock.

State-controlled Cosco Pacific issued so-called put options to other stockholders in CIMC promising to buy their shares in the company at a fixed price. The options formed part of a wider government drive to protect minority shareholders from potential losses resulting from the conversion of mainly state-held shares into tradable stock.

Cosco Pacific's income from CIMC also fell 33 percent to $26.8 million after the world's largest maker of containers cut prices amid falling demand. The port operator has a 16 percent stake in CIMC.
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Sept. 13 (Bloomberg) -- Larsen & Toubro Ltd., India's biggest engineering company, will invest $400 million in the next six years in its ship-building business to grab market share as South Korean rivals are busy with record orders.

Larsen will select a deep-water yard this year and aims to start building ships weighing as much as 25,000 tons in three years, Chief Executive Officer A.M. Naik said in an interview. The Mumbai-based company will spend half the funds in the first three years and plans to set up a separate company to manage the business, he said.

Record order books at Hyundai Heavy Industries Co., the world's largest shipbuilder, and other South Korean groups may help Indian companies win more business as owners turn elsewhere to get timely delivery. ABG Shipyard Ltd. and Bharati Shipyard Ltd., India's two largest private shipbuilders, are expanding yards aiming to win orders for smaller craft.

``There is a real opportunity for Indian companies,'' said Navin Thakur, a research analyst at the Gurgaon, India-based unit of Drewry Shipping Consultants Ltd. ``For now, they can aim for the low end of the market trying to take advantage of the overflowing Korean yards. If they do it well now, they can have aspirations like China to grow in the future.''

Shipowners have spent about $207 billion in the past three years on new vessels, including container carriers and tankers, the same amount as in the preceding decade, according to Clarkson Plc, the world's biggest shipbroker.
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Sept. 19 (Bloomberg) -- China Merchants Holdings (International) Co., which has stakes in the country's five biggest ports, said first-half profit rose 3.8 percent, after it invested in Shanghai's harbor operator...

Container Volume Rises

The company's shares fell 1.76 percent to close at HK$22.35 in Hong Kong. The stock has gained 33 percent this year, outpacing a 17 percent increase in the Hang Seng Index, of which it's a member.

China Merchants, which invests in Hong Kong and six mainland Chinese ports, said container volume rose 162 percent to 18.5 million 20-foot boxes in the first half.

Shanghai's cargo volume rose 18 percent to a record 10.1 million 20-foot boxes in the first half, according to Shanghai International Port (Group) Co. China Merchants completed its purchase of a 30 percent stake in the operator of China's busiest port last year.

China Merchants, which also runs container terminals in Hong Kong and other Chinese ports including Shenzhen, didn't disclose first-half cargo volume in its announcement to the stock exchange.

Income from China International Marine, or CIMC, fell after the world's largest maker of sea cargo containers reported a 34 percent drop in first-half profit.

The company's contributions from its 27 percent-owned Modern Terminals Ltd., a Hong Kong-based port operator, also declined.

Modern Terminals' first-half operating profit dropped 16 percent, based on earnings released by its biggest shareholder Wharf (Holdings) Ltd., Credit Suisse Group analyst Karen Chan wrote in a Sept. 15 report.

http://www.bloomberg.com/apps/news?pid=20601089&sid=aZsPiZVd0rfw&refer=china

MEMPHIS, Tenn. (AP) -- Express transportation company FedEx Corp. said Thursday its first-quarter profit rose 40 percent, driven by strong demand for ground and international express shipments.
For the quarter ended Aug. 31, the company reported net income of $475 million, or $1.53 per share, versus a prior-year profit of $339 million, or $1.10 per share. Revenue rose 11 percent to $8.54 billion from $7.71 million in the year-earlier period.
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THE Indian shipping industry will need to spend about US$4 billion on fleet renewal as more than half of the ships owned by Indian companies will have to be scrapped in five years, according to the Indian National Shipowners' Association (Insa).

As of March this year, Indian companies owned 739 ships. Altogether, 56 per cent of the ships are due to be scrapped in five years.

The average age of the Indian fleet is about 18 years, and 40 per cent of the ships are more than 20 years old. According to international practice, all ships over 17, if they have to continue in service, must be overhauled and redeployed. Even after that, they can serve only up to the age of 25. Internationally, the average age for retiring ships is 22 years.

Most ships owned by private Indian companies are single-hull, all of which have to be phased out by 2010 under IMO norms, which has revived interest in the shipbuilding sector across the globe as the business at stake is worth US$250 billion. However, on the positive note, with global shipyards brimming with orders and unable to take on any fresh ones, interest is building among Indian players to set up yards or expand existing facilities. Going by recent trends, the western Indian state of Gujarat appears to be the hub for new shipyards, with the state likely to emerge as Asia's new shipbuilding focal point.

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WASHINGTON) An executive with Dubai Ports World, the Arab-owned firm whose purchase of American port facilities caused an uproar this year, said on Tuesday that a new US port security law was fundamentally inadequate.

Dubai Ports, owned by the United Arab Emirates, became the centre of a bitter debate in Congress after buying assets at six US ports within its US$6.8 billion purchase of Britain's Peninsular & Oriental Steam Navigation Co in February.

The Bush administration approved the purchase of facilities in New York, New Jersey, Philadelphia, Baltimore, Miami and New Orleans. But lawmakers had security concerns about an Arab state-owned company running US port terminals, and Dubai Ports responded by saying it would sell those US assets.

The ports controversy advanced port security as an issue in Congress, which resulted in the Safe Accountability for Every Port Act of 2006 Mr Bush signed into law on Friday.

The Act authorises US$3.4 billion over five years for safety measures, including installing radiation detectors at the 22 largest US ports by the end of next year. Echoing some criticism voiced by Democrats, Mr Sanborn criticised the Act for setting up only a single pilot programme to test at three foreign ports the feasibility of scanning cargo headed for the United States while it is still overseas.

'Are imaging and radiation detection necessary to protect us? If we believe they are, we should agree to do it everywhere,' Mr Sanborn said. 'This requires a global approach and not the unilateral or bilateral initiatives currently underway,' he added. 'The threats are global, they are not just directed at the United States.'

The cost of US$500,000 per scanner is small compared with the US$300 million overall investment for equipping even a small port, he said.

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PANAMA CITY, Panama (AP) -- The old shortcut between the seas isn't what it used to be. Many modern ships are too wide to use the 92-year-old Panama Canal, where traffic is so heavy that vessels still able to squeeze through can face costly delays.

Panamanians are likely to approve an eight-year, $5.25 billion expansion plan in a referendum on Sunday. The idea is to build a third set of locks on the Atlantic and Pacific sides, creating a separate lane for larger cargo, cruise and tanker ships while doubling the canal's capacity.

Without the expansion, the canal will increasingly lose out as shipping traffic finds other routes. Even the Suez Canal is a competitive alternative for the largest ships moving between Asia and the U.S. East Coast, says Maersk Line, the canal's biggest user.

Meanwhile, Nicaragua to the north is enthusiastically pushing its own plan to open an ocean-to-ocean waterway.

"We have to be looking at staying competitive," said Jorge Quijano, the Panama Canal's director of maritime operations. "The only way to do that is to expand what we have."

The Panama Canal now handles 5 percent of world maritime traffic, 68 percent of it to or from the United States.

About 25 of the 37 ships passing through on an average day pay up to $200,000 to reserve a spot in line, which on top of regular tolls pushes the cost of crossing Panama to more than $400,000 for the largest ships, said canal administrator Alberto Aleman Zubieta.

Even a ship that has a reservation waits an average of 16 hours before moving through, and those without reservations wait an average of 28 hours -- delays that cost shippers about $50,000 a day per vessel. And when the canal needs routine maintenance, the delays can grow to six or seven days, with more than 100 ships lining up to get through, Zubieta said.

"Tolls are steep now and the canal is almost maxed out," said Mike Zampa, spokesman for the world's seventh largest shipping company, APL. "You still get through, but there's a reservation system that makes things difficult. They are even using an auction system to sell some slots at much higher rates."

An expanded canal also promises more reliability than competing routes -- a container of skirts and slacks from Hong Kong can reach New York in 23 days through the canal. That's a week longer than it might take for the same cargo to be unloaded in Seattle and moved by rail, but U.S. railways are saturated, he said.
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By GEORGE JOSEPH

SINGAPORE) Reported piracy attacks worldwide are on the decline. Latest statistics show that the number of attacks through to the end of the third quarter 2006 decreased to 174, 30 less than the 205 that occurred in the first three quarters of 2005.

For the littoral states of the Straits of Malacca, the good news is that Indonesia saw a reduction in piracy attacks while Bangladesh was a hotspot where the situation deteriorated.

Its Chittagong port recorded an alarming 33 incidents during the quarter under review. With 22 actual and 11 attempted attacks in and around the port, Chittagong took the dubious distinction of being named the world's most dangerous port.

In its quarterly Piracy and Armed Robbery Against Ships report, the ICC International Maritime Bureau notes that ships were boarded in 113 instances and 11 ships were hijacked. There were 163 crew taken hostage, 20 kidnapped, and six were killed.

IMB director Captain P Mukundan credited 'those law enforcement agencies responding to incidents in high risk areas' for this welcome reduction in attacks. However he stressed that piracy continues to be a serious concern.
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(BEIJING) Shanghai International Port Container (Group) Co, operator of China's busiest container harbour, handled 20 per cent more cargo boxes in October, as China's growing trade pushed up demand.

Traffic rose to 1.91 million 20-foot boxes last month, the state-owned Assets Supervision and Administration Commission of Shanghai Municipal Government said in a statement posted on its website.

The port handled 18 million boxes between January and October, 20 per cent more than a year earlier, the statement added.

China's rising trade is boosting shipments through Shanghai, Shenzhen and the nation's other ports. The country's total trade, including imports and exports, may rise more than 20 per cent this year to US$1.7 trillion, Shanghai Securities News said on Monday, citing Fu Ziying, assistant to the commerce minister.
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Nov. 24 (Bloomberg) -- Ontario Teachers' Pension Plan, Canada's third-biggest retirement-fund manager, agreed to buy four North American container terminals from Orient Overseas (International) Ltd. for $2.35 billion to tap rising sea cargo demand.

The pension fund will buy terminals in New York and New Jersey, as well as two in Vancouver, Hong Kong-based Orient Overseas said in a statement to the city's stock exchange today. Shares of Orient Overseas, which will make a $1.98 billion profit from the sale, surged a record 22 percent.

At least $17 billion of terminals have changed hands this year as rising exports from Asia boost sea freight. Orient Overseas is selling the terminals as it looks to invest in ports in China, where trade is growing at 24 percent annually. About 90 percent of world trade moves by sea.

``It looks like a good deal for Orient Overseas,'' said Michael Chan, an analyst at Macquarie Securities Ltd. in Hong Kong. ``It's more than the seller's original expectation.''

The price represents about 22 times earnings before taxes, interest, depreciation and amortization, according to Bloomberg calculations. That compares with the 13 times that Singapore's PSA International Pte. paid for a 20 percent stake in Hutchison Whampoa Ltd.'s port unit in April, according to Goldman Sachs Group Inc.

Orient Overseas shares jumped HK$8.25 to HK$45.20 at the close in Hong Kong, their biggest one-day gain since the company's 1992 listing, on speculation the company may pay a special dividend.
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Nov. 27 (Bloomberg) -- China Communications Construction Co., the country's largest port builder, plans to sell as much as HK$16.1 billion ($2.07 billion) of shares in an initial public offering, two people with knowledge of the plan said.

The state-owned company will sell 3.5 billion new shares in Hong Kong, representing a 24.5 percent stake, at HK$3.40 to HK$4.60 apiece starting tomorrow, said the people, who declined to be identified before a formal announcement.

China Communications controls 90 percent of the market to design and build ports in the world's fourth- largest economy at a time when the government plans to spend $485 billion by 2010 to improve transportation. The sale will add to the record $42 billion raised by Chinese companies this year as the government sells state assets to improve management and profitability.

``It's a world leader and it's doing very well,'' said Chris Ruffle, who oversees about $2 billion in Chinese stocks in Shanghai for Edinburgh-based Martin Currie Investment Management Ltd. ``We've invested in its subsidiary, Shanghai Zhenhua Port Machinery Co., for some years.''

BOC (International) Holdings Ltd., Merrill Lynch & Co. and UBS AG are arranging the initial public offering.

Rob Stewart, a Hong Kong-based Merrill Lynch spokesman, and Mark Panday, a Hong Kong-based UBS spokesman declined to comment. Ning Xia, BOCI's Hong Kong-based spokeswoman couldn't immediately be reached.

http://www.bloomberg.com/apps/news?pid=20601089&sid=achbcow2an2c&refer=china

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(SINGAPORE) PSA International and Jurong Port handled 12 per cent more containers in Singapore last month, the fastest pace of growth this year, helped by growing trade demand.

Singapore, the world's busiest container port, handled 2.1 million 20-foot standard containers in November, compared with 1.88 million a year earlier, the Maritime and Port Authority of Singapore said on its website yesterday. In the first 11 months, Singapore's port handled 22.6 million containers, 6.6 per cent more compared with 21.2 million from a year earlier, based on data from the port authority.

http://business-times.asiaone.com/sub/shippingtimes/story/0,4574,218242,00.html?
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Dec. 31 (Bloomberg) -- South Korea's exports probably grew more than 10 percent for the 11th straight month as companies shipped more computer chips, cars and other products to meet year-end demand in the U.S., Europe and China.

Overseas shipments increased 15.2 percent in December from a year earlier after climbing a revised 18.7 percent to a record in November, according to the median forecast in a Bloomberg News survey of 10 economists. The trade figures will be released at 10 a.m. on Jan. 1 in Seoul.

Exports, which make up 40 percent of the economy, have stoked 14 quarters of expansion in South Korea, the longest stretch of growth since before the 1997 Asian financial crisis. The government last month raised its estimate for 2006 export growth while Samsung Electronics Co. in November forecast ``very strong'' first-quarter orders for computer memory chips.

``Car exports showed a recovery from the previous month with steel and tech sectors such as flat screens and chips taking the lead in exports,'' said Kim Jae Eun, an economist with SK Securities Co. in Seoul. ``Exports will remain robust albeit some slowing in the coming months.''

Still, gains in the won, which has risen 8.6 percent versus the U.S. dollar this year, may reduce earnings for companies such as Samsung Electronics and Hyundai Motor Co. by making their products more expensive overseas.

Export growth will slow to 10.8 percent next year from 12.9 percent this year, the Bank of Korea forecast on Dec. 5. The $788 billion economy will grow 4.4 percent in 2007, slowing from this year's 5 percent expansion, it said.
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(AMSTERDAM) The port of Rotterdam, Europe's biggest, realised a 1.7 per cent growth in cargo volumes last year, keeping levels at all-time highs, but growth capacity would be limited in the short term, the port said on Friday.

The port handled a total of 377 million tonnes of cargo in 2006, and growth came mainly from container cargo and liquid bulk such as basic chemicals and vegetable oils, preliminary figures showed.

Cargo volumes growth slowed from 5 per cent in 2005 and is expected to be 2.5 per cent in 2007, but stronger growth rates would depend on projects that would start operations in 2007, the port's chief executive Hans Smits said.

'Only when the larger expansions are completed, such as those of the EMO coal terminal and the Euromax container terminal, it will be possible to grow quicker,' Mr Smits said.

The port of Rotterdam, owned by the city of Rotterdam and the Dutch State, has been working to expand capacity to meet growing demand from Asia, mainly China, and prevent congestion of ships which happened in 2004.
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CHICAGO) Initial public offerings from maritime shipping firms may be thin on the ground in 2007, not for a lack of investor interest but because many operators are flush with cash, according to analysts.

'Fleet operators have seen unprecedented earnings over the past five years,' said David Frischkorn, a managing director at investment bank Dahlman Rose. 'Those able to tap the market may not need to (issue IPOs).'

Even though some on Wall Street worry that shipping rates on the spot market may turn volatile due to a glut of vessels, analysts said maritime firms can offer the kind of stability that investors crave.

The spot market dictates daily shipping rates based on the supply of ships and the demand from customers, and prices can fluctuate rapidly. Fixed-term charters have set rates.

'The story right now is very much driven by a sense among investors that stability is better than volatility,' said Loli Wu, a managing director of investment banking at Citigroup.

The firms have long-term charter contracts not subject to the volatility of daily changes in the spot market and a fixed dividend - likely ensuring a receptive audience from investors seeking stable investments, especially as concerns over slowing US economic growth persist.

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(HONGKONG) Guangzhou Port Group, an operator at China's third-largest cargo port, plans to raise up to US$750 million from an initial public offering in the fourth quarter, says a report in the South China Morning Post, citing sources.

The state-owned company could sell shares in Hong Kong before an offering on a mainland bourse, but the product's final structure has not been decided. The offering will range from US$500 million to US$750 million, depending on what assets end up in the listed company, a source said.

However, director of publicity Li Pin said he had not heard of the listing plan.

Tianjin Port Development Holdings, an operator at the mainland's fifth-largest port, trades at 13.6 times expected earnings for this year. Its shares have risen 40 per cent since raising US$160 million from float in Hong Kong in May last year. On Friday, its shares fell 3.29 per cent to HK$2.64.

Shares of Xiamen International Port, an operator at the mainland's seventh-largest port, are up 17 per cent this year. They trade at 21 times expected earnings for this year.

The boom in ocean-borne shipping has been accompanied by a frenzy of port building on the east coast, though the pace of expansion may be about to slow.

'We're expecting lesser throughput growth of about 15 per cent in the port sector in the coming two years,' said Chris Tang, lead fund manager at Marco Polo Investment Group.

'The Pearl River Delta is pretty competitive and there's a lot of new port capacity,' he said.

Throughput at China's ports has grown 20 per cent annually in the past three years, according to Ms Tang.

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February 20 – Bloomberg (Lee Spears): “China’s ports handled 15% more cargo by weight in 2006 than a year earlier the official Xinhua News Agency reported… Cargo volume was 5.6 billion tons…”

http://www.prudentbear.com/creditbubblebulletin.asp

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March 14 (Bloomberg) -- Aker ASA, a Norwegian holding company controlled by billionaire Kjell Inge Roekke, will sell its remaining stake in Aker Yards, Europe's largest shipbuilder, to raise cash for new investments. Shares of Aker Yards fell 12 percent.

Aker will offer as many as 9.1 million shares in Aker Yards, or 40.1 percent of the company, to Norwegian and international institutional investors, it said in a statement today. The stake was worth 5.1 billion kroner ($831 million) at yesterday's closing price.

``Some of the money will probably go to the Aker companies, but they don't need all that money,'' said Truls Evensen, who helps oversee about $1.5 billion in Norwegian equities at Storebrand Kapitalforvaltning in Oslo. ``We could see some small acquisitions, and they've also shown that they're creative in developing new ventures.''

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March 17 (Bloomberg) -- Shanghai Zhenhua Port Machinery Co., the world's biggest maker of container cranes, plans to sell as many as 200 million new shares as part of plans to raise 3.5 billion yuan ($450 million) to fund expansion.

Zhenhua, which has 74 percent of the global market for container cranes, is expanding its production base as ports enlarge their capacity for handling freight. Last month the company said it won an order to supply $200 million of cranes to Hanjin Shipping Co., South Korea's largest shipping line.
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March 21 (Bloomberg) -- FedEx Corp., the world's largest air-cargo carrier, said third-quarter profit fell 2 percent to $420 million for the first drop in three years as a slowing U.S. economy and winter storms damped shipping demand.

Net income decreased to $1.35 a share in the three months ended Feb. 28 from $428 million, or $1.38, a year earlier, the Memphis, Tennessee-based company said today in a statement. Revenue rose 7 percent to $8.59 billion.

FedEx's profit drop reflected the cooling in the U.S. economy. Growth in U.S. industrial production fell for four straight months before improving in February, Thomas Wadewitz, a New York-based analyst at J.P. Morgan Securities Inc., said in a March 19 report.

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"Ocean freight rates for dry commodities surged higher on Tuesday as Chinese demand for raw materials and massive congestion at
Australian ports lifted prices closer to a 2004 record. Ship industry sources said more than 200 merchant vessels were waiting to
load mostly minerals from Australia's major ports. The Baltic's capesize index for merchant ships hauling iron ore and coal piled on
78 points to 7,888 on Tuesday its highest since December 2004."

This is Chinese demand for minerals, which has not abated.

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April 12 (Bloomberg) -- Jiangsu Lianyungang Port Co., a port operator in eastern China, may raise as much as 747 million yuan ($97 million) in an initial share sale in Shanghai, tapping demand in a stock market that's almost tripled in the past year.

Jiangsu Lianyungang will sell a 33.5 percent stake, or 150 million yuan-denominated shares, at a price range between 4.6 yuan and 4.98 yuan, the company said in a statement to the Shanghai Stock Exchange today. The port operator will start marketing the shares in the city today, the statement said.

The company follows larger port operators in Shanghai and Tianjin in raising funds from China's booming stock market as the central government has ordered port expansion. China's CSI 300 Index, which tracks yuan-denominated A shares listed on the country's two exchanges, rose to a record for the eighth day in a row yesterday.

``It's a good time to sell shares, as the stock market is hot,'' said Zhu Anping, an analyst at Shenyin Wanguo Securities Co. in Shanghai, before today's statement. ``Lianyungang and other port operators will generate stable profit growth on booming trade in the coming years.''

China's exports rose 27 percent last year, and imports rose 20 percent. Global trade will probably grow 7.6 percent this year, according to the International Monetary Fund. About 90 percent of the world's trade is moved by sea.

China plans to build 639 deep-water berths by 2010, doubling the capacity of coastal ports to keep pace with increasing trade.

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A deal has been reached with a Beijing-based shipping company to route Asian freight over the new Port of Prince Rupert container terminal and CNÕs North American rail network, CN Rail announced Monday.

COSCO Container Lines Americas, Inc., will start service via the Port of Prince Rupert and CN for container shipments between Asia and the North American markets starting in the fourth quarter of 2007, CN Rail said in a press release.

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May 24 (Bloomberg) -- Brazilian farmers can expect fewer delays and increased capacity at the Port of Paranagua, Latin America's largest soybean terminal, before the harvest year that begins in October, Brazil's ports minister said.

An agreement to transfer Paranagua to the State of Parana will be completed by June 20, Pedro Brito said today in an interview in Sao Paulo. The agreement will end a federal-state rules dispute, set minimum service standards and replace political appointees with professional managers, he said.

Many Brazilian soybean farmers must truck their crops more than 2,000 kilometers (1,250 miles), or the distance from New York to New Orleans, for export at Paranagua, where they can wait for weeks before loading. Such delays have helped prevent Brazil from overtaking the U.S. as the No. 1 soybean exporter.

``Paranagua can't have huge lines of soy trucks lined up on the highway,'' Brito said. ``I've set a goal to complete the talks within a month, and you will see significant improvements this year.''

Soybeans at Paranagua rose 18 centavos, or 0.6 percent, to 32.24 reais per 60-kilogram (132-pound) sack today, according to Brazil's Centro de Estudos Aplicados em Economia Aplicada, a Piracicaba, Brazil-based agricultural research institute.

The U.S. exported 29.4 million metric tons of soybeans in the marketing year that ended Oct. 1, or 15 percent more than Brazil, the U.S. Department of Agriculture said May 11.

Parana officials have been negotiating a transfer of the port since 2003, according to an e-mailed statement from the port's press office. State officials said they are unaware of any specific terms or a deadline for concluding the talks.

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HONG KONG) Daewoo Shipbuilding & Marine Engineering Co, the world's third-largest shipyard operator, received orders worth a combined US$1.5 billion to build container vessels and bulk carriers.

The orders include a contract worth 1.22 trillion won (S$2 billion) from a company in Europe to build ships that can carry 9,100 20-foot standard containers, Daewoo Shipbuilding said yesterday.

It didn't disclose the buyer or how many vessels were ordered.
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