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 | Australian Floods May Lead to Higher Steel Costs |
January 5, 2011 - Devastating floods in Queensland, Australia, have forced closures of approximately 90 million metric tons of coal mining capacity in a region that is a major coal export hub for Asia. Coal mining company losses are expected to be into the billions of dollars.
Flooded mines, damaged railway lines and workers unable to report for work mean that it might be February 2011 before production levels are back to normal, according to an analysis from IHS World Markets Energy Perspective.
Queensland supplies approximately half the world's coking coal supplies, needed for steel manufacturing throughout Asia. The disruption will increase competition for spot market cargoes, pushing up prices from the current US$253 per metric ton mark. Competition is likely to be exacerbated by buyers' supply-security concerns.
Asian steel manufacturers are expected to pass on high prices for coking coal, pushing up prices of steel and therefore construction costs for steel-intensive facilities such as oil refineries and petrochemical facilities, according to IHS' analysis.
Breakbulk Online
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Inflation Worries on the Rise in Euro Zone | |
Prices rise as ECB stares into eurozone divide
January 9, 2011 - FRANKFURT - Inflation is on the rise as the European Central Bank tries to deal with diverging eurozone economic trends and China positions itself as a potential friend for indebted governments.
The ECB has been battling solvency crises in peripheral eurozone countries and supplying commercial banks with cash to ensure lending to the 17-nation economy but must now consider again its primary mandate: price stability.
Eurozone inflation was expected to hit 2.2 percent in December, the first time in two years it will have breached the central bank's target of just below 2.0 percent.
Climbing energy and food prices indicate inflation can no longer be considered a back-burner issue, complicating the ECB's task as it works to help banks strengthen their reserves and capitals to solidify their finances.
If confirmed, the latest reading would oblige ECB president Jean-Claude Trichet to take another look at what he says is the only needle on his compass.
"The ECB faces the tough task of balancing a raft of bad news from the eurozone?s periphery with the more positive developments elsewhere and the fact that inflation has risen above target," said Ben May at Capital Economics.
He and other economists nonetheless expected the inflation increase to be short-lived because it stemmed in large part from a spike in energy and food prices.
And there was good news for central bank policymakers as well since eurozone economic sentiment and business activity are picking up, the economies of heavyweights France and Germany are growing, and China says it is here to help.
Vice Premier Li Keqiang visited Spain and Germany last week, and Spanish daily El Pais quoted government sources as saying that Beijing is willing to buy about 6.0 billion euros ($7.8 million) worth of Spanish public debt.
Li, widely tipped to become the next premier, said in an El Pais op-ed piece that China was sure Spain would recover from the economic crisis and that Beijing would buy more Spanish government bonds, without specifying a figure.
Goldman Sachs chief European economist Erik Nielsen was doubtful however that China or other sovereign funds would provide rescue financing to eurozone countries.
"Highly unlikely," he exclaimed. "The political cost -- implicit or explicit -- would be too big for core Europe to accept the arrival in the eurozone of financial rescuers from China, the Middle East or Russia."
In the meantime, Trichet reminded European lawmakers again Friday that the ECB's "monetary policy responsibility cannot substitute for government irresponsibility."
The reason for a central bank decision to buy eurozone government bonds was "not to finance debt-laden member states," he added in a speech to conservative German politicians, many of whom oppose providing more funds to such countries.
"Europe has not turned into an inflation community. And it will not go that way," Trichet stressed in remarks likely to be well received by that audience.
In December, the ECB nonetheless unveiled its biggest capital increase ever, aimed at raising subscribed capital by five billion euros to 10.76 billion by the end of 2012.
That might herald more controversial government bond purchases this year amid a widening gap between core and peripheral eurozone members, economists said.
"The divergence between strong and weak countries will be the ECB's dilemma in 2011," Deutsche Bank analysts forecast.
By William Ickes
AFP
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| U.S. Seeking More Cooperation on Cargo Security |
US urges tighter cooperation on cargo security
January 9, 2011 - BRUSSELS - Governments must step up cooperation to thwart dangerous shipments that terrorists could use to paralyse global trade, US Homeland Security Secretary Janet Napolitano said Thursday.
Napolitano used a speech in Brussels to enlist allies in an effort to protect the global supply chain, the crucial system that takes products made in countries like China through ships and trucks to European and US stores.
"That system is a powerful engine of commerce, of jobs, of prosperity. Yet a range of increasingly unpredictable and potentially catastrophic threats, from terrorist acts to natural disasters, present substantial danger to the entire system," she said at a policy forum.
"Regardless of where a potential event might occur, the ripple effect of a significant disruption of this global system could potentially impact not just the United States but the entire international community," Napolitano said.
The US homeland security chief, who held two days of meetings with European Union officials on a trip that also took her to Afghanistan, Ireland, Israel and Qatar, said governments needed to make progress in three areas:
-- Working more closely to track the movements of material that can be used to make bombs, including chemicals, and preventing terrorists from acquiring them.
-- Protecting critical air, land and sea transportation hubs.
-- Ensuring that the global supply chain can rebound quickly from an attack in order to prevent trade from grinding to a halt.
A consequence of an attack on the supply chain, she warned, "could be that people across the world would find empty store shelves for food, serious shortages in needed medical supplies or significant increases in the cost of fuel."
The US Homeland Security Department will work with the Departments of State and Defence to provide training and technical assistance to partner countries.
"In all we will have hundreds of aviation and customs officers stationed around world working with host countries to secure the international supply chain," she said.
Her department will also seek to expand its Global Shield programme, an intelligence-sharing deal between 71 governments to track the shipping of chemicals that can be used for bombs.
The aim is to bring more countries into the programme and expand it to include air and rail transport as well as "all commodities that could be used by terrorists," Brian Davis, a US Immigration and Customs Enforcement official, told AFP.
The threat to the supply chain was highlighted in October when booby-trapped parcels were discovered in cargo planes bound for the United States.
AFP
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| Cathay Pacific Switches to E-airway Bills |
Januarry 9, 2011 - Cathay Pacific Airways has completed the switch to electronic air waybills in Hong Kong as it moves towards a paperless environment in the airfreight industry.
The e-AWB initiative covers all online destinations from Hong Kong to which Cathay Pacific and sister airline Dragonair fly. The airline plans to implement 100 per cent e-AWB from all its overseas stations by the end of 2012.
It says the benefits of e-freight included shortening the shipping cycle, reduced costs, faster customs clearance, the elimination of problems resulting from loss or misplaced documents, and reduced paper usage.
Worldtrademag
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Shanghai tops Singapore in container volume |
January 10, 2011 - The Port of Shanghai shot past the Port of Singapore in 2010 to become the world's busiest container port.
Shanghai saw container volume last year rise 16.2 percent to 29.1 million TEUs, surpassing Singapore's 28.4 million TEUs, up 9.7 percent from 2009. Shanghai's passing of Singapore was little surprise as it had been inching ahead of Singapore in monthly container counts through the second of 2010.
Analysts have forecast for years that Shanghai would eventually pass Singapore due to its more even mix of import/export and transshipment cargo. Singapore relies almost wholly on transshipment. Additionally, some port experts claim Shanghai long ago passed Singapore considering that Singapore double counts its transshipments.
Meanwhile, Singapore-based global terminal operator PSA International said its 2010 volume rose 14.4 percent to 65.1 million TEUs at the company's 28 port facilities worldwide.
PSA's flagship facility in the Port of Singapore saw volume rise at a somewhat slower clip -- 10.1 percent to 27.7 million TEUs -- while volume at its terminals outside Singapore rose 17.8 percent to 37.4 million TEUs.
"The PSA Group recovered some of the volumes lost during the global economic slump in 2008 and 2009, and volumes handled in 2010 across our terminals worldwide were higher than anticipated helped by a much stronger recovery in the first seven months of the year," Eddie Teh, PSA group chief executive officer, said in a statement. "However, the lower growth rate in the last five months up to December 2010 indicates that weaknesses in the major global economies still persist and growth in 2011 is expected to be uneven and cannot be taken for granted."
PSA has grown to become the second largest container terminal operator globally - behind Hong Kong-based Hutchison Port Holdings - on the back of high growth at Singapore, which has been the busiest container port in the world the past few years, though it has steadily diversified its portfolio to terminals in 16 countries.
Shanghai's container terminals are managed by the Shanghai International Port Group, which has used the PSA blueprint to develop Shanghai into a massive global hub -- particularly since the development of the Yangshan deepwater port.
American Shipper+ |
| Bad roads choke Chennai box terminal |
January 11, 2011 - Thanks to bad roads and the absence of sufficient exit routes that hamper movement of trucks, Chennai port is in a mess. The port is overflowing with containers, and, as an official of a leading Custom House Agency said, the situation is very grim.
The following statistic gives an idea of how grim the situation is, reported The Hindu. The DP World Chennai's yard can hold 8,000 TEUs, but as of this morning, there were 13,000 TEUs in the terminal, comprising 6,275 imported containers and 1,455 containers waiting for the ships.
"There is hardly any space for moving the containers within the terminal, leave alone moving them out of the port," an official said.
If this situation continues longer, some automobile companies in Tamil Nadu and Karnataka could face production hits. In fact, one car manufacturer had brought in 15 technicians from abroad for a "special project". These people have been staying idle for the last five days because the imported components for the "project'' are stuck in the port.
Meanwhile, import boxes keep piling up with each passing day. Some of the shipping lines have even stopped accepting export cargo in the last three to four days due to the situation. This means an exporter needs to wait for things to normalise or move to another port.
Due to congestion, a container ship that used to stay at the terminal for two days now stays for over four days. The total stay - right from the time of a ship's arrival at Chennai port's anchorage to the time it departs from the terminal - has increased to nearly six days from the earlier three, he said.
A ship with a capacity of around 2,000 boxes pays a daily berth hire charge of around US$2,204, and another $2,204 as charter hire.
"We are more than double the cost due to delay," he said. The problem arose mainly due to external factors such as not having enough entry/exit gates, and bad roads - not due to "operational issues", an official of the port said.
"Trucks are unable to come on time and pick up the boxes," said an official.
Cargonews Asia
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| Trade rise strains Malaysia's top ports |
January 10, 2011 - Malaysia's growing international trade is putting a strain on main ports, with delays in cargo handling being reported despite an increase in throughput volume, reported Business Times.
Publisher and consultancy Oxford Business Group (OBG) said as majority of Malaysia's foreign trade as well as its domestic cargo transfer is moved by sea, delays in clearing the ports can have a direct impact on the economy.
"Bottlenecks add to the costs of both shipping firms and their clients, especially those with perishable freight or cargoes being transported on a tight deadline.
"Though there has been an increase in the number of 20-footer container units being handled by Malaysia's ports this year, some of the main cargo facilities are being stretched, with complaints coming from representatives of the shipping industry and producers," it said in its latest economic updates on Malaysia.
International Trade and Industry Ministry's (Miti) figures released in early December show a continuing surge in overseas trade, with the 10-month import and export data rising over 20 per cent from the same period in 2009 to US$315.02 billion. Exports climbed by 18 per cent to $172.41 billion, while imports increased by 24.7 per cent to $142.61 billion.
The government has revised upwards its projected economic growth for 2010 to seven per cent from six per cent, due partly to a solid increase in foreign trade.
In the south, Johor Port Shipping and Forwarding Association said delays at the Johor Port were slowing the flow of imported raw materials, disrupting production, and resulting in missed deadlines for shipments. These are potentially harming Malaysia's reputation as a supplier.
The port has little room for further expansion, having been designed to handle a maximum of 800,000 TEUs a year, a limit it has now reached.
In mid-November, a number of shipping companies operating through Johor Port said they would be imposing a surcharge on exporters due to high levels of congestion and delays at the facility.
The surcharge is to offset losses stemming from the delays, including the costs of operating vessels, charter fees and charges resulting from missed connections.
This is expected to hit industries in Pasir Gudang, with manufacturers having to fork out $25 or more per container in extra levies.
OBG said port operators in Johor are trying to improve the situation, but there have been no quick-fix solutions to that.
MMC Corp, which operates both Johor Port and Port of Tanjung Pelepas (PTP), recently floated a proposal to shift all container-handling activities to PTP, leaving Johor Port to deal with other cargoes.
However, the move to consolidate port activities was rejected by the government, with Miti Minister Datuk Seri Mustapa Mohamed saying the decision had been taken after considering views and concerns from companies and industries operating in Pasir Gudang.
Cargonews Asia
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| Chinese bank allows yuan trade in US |
January 12, 2011 - WASHINGTON - A TOP state-owned Chinese bank is allowing US customers to trade the Chinese yuan, a new step toward internationalising the closely-controlled currency, the Wall Street Journal reported on Tuesday.
An official of the Bank of China's New York branch said the bank's move anticipates the eventual freeing up of controls on the yuan, which is tightly managed by Beijing.
'We're preparing for the day when renminbi becomes fully convertible,' branch manager Li Xiaojing told the paper.
Ms Li said the bank wants to become 'the yuan clearing centre in America.' Beijing opened up limited trading of the yuan in Hong Kong in July, and some western banks allow trading in the currency.
But the Bank of China's move would be the first time a state-owned bank offered a facility for trading the yuan outside China.
Ms Li's comments came a week before Chinese President Hu Jintao is to arrive in Washington for talks with President Barack Obama.
AFP
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| US, Mexico Eye Talks on Trucking |
U.S. Trade Representative says negotiations could begin as early as next week
January 12, 2011 - A new U.S.-Mexico cross-border trucking program could be in place within four to six months, U.S. Trade Representative Ron Kirk said Monday.
The Wall Street Journal quoted Kirk as saying negotiations with Mexico over a new cross-border trucking program could begin as early as next week.
At the same time, Mexico suspended procedures that regularly add and remove products from a list of U.S. goods hit with punishing retaliatory tariffs.
The Department of Transportation released an "initial concept document" with the bare outlines of a program as a starting point for discussions last week.
The program would replace a Bush-era pilot project that was killed by Congress in March 2009, drawing $2.4 billion in retaliatory tariffs from Mexico.
Mexican officials welcomed the initiative to resolve a dispute that stretches back to the implementation of the North American Free Trade Agreement in 1994.
"We will carefully evaluate (the concept document) to move forward with the administration," said Ricardo Alday, spokesman for the Mexican Embassy in the U.S.
The Teamsters union, independent truckers and consumer advocates oppose giving Mexican carriers the same rights enjoyed by Canadian truckers in the U.S.
Journal of Commerce
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Latin America: Another Good Year, Hopefully | |
January 7, 2011 - Latin America is looking at another good year for growth, "with the usual proviso that it is subject to risks from abroad," Morgan Stanley says. "What is unusual this year is just how uncertain the global environment is." One concern is that Latin America was better prepared in 2008 to withstand a financial crisis than it is today, it says.
For chemical producers, much attention will be given this year to progress of the world-scale Ethylene XXI complex in Mexico, a project industry had been trying to get off the ground for years. The difference this time is that the partners Braskem and Grupo Idesa have already secured a 20-year raw material supply contract from state-owned oil company Pemex. The companies say they expect to complete procurement and detailed engineering for the project this year. Due to the failure of the Phoenix project, a petrochemicals complex proposed by state-owned petchem company Pemex Petroquímica that never got off the ground, there is some skepticism about Ethylene XXI's success. "If Ethylene XXI goes the same way as Phoenix, it is unlikely that investors will take any future project proposal seriously," says Business Monitor International (BMI; London). "Domestic petrochemicals producers may instead decide to invest in South American states, particularly Peru, where there is ample potential in its largely untapped gas fields," BMI says.
There will be few substantial additions to Mexico's petrochemicals industry this year and through 2015, and the country is expected to be increasingly dependent on imports in the medium term in order to keep up with demand, says BMI. Mexico's polyolefins deficit will reach 2.2 million m.t. by 2012, BMI says.
Morgan Stanley says Venezuela is approaching a tipping point. Its import-dependent economy will not be able to rely on high oil prices to pull it out of the recession and it will to continue to face a hard currency shortage. Chemical projects are planned, although the world-scale Jose project has been scaled back (see Brazil section.)
Argentina is "at a crossroads" and in need of market-friendly policy changes if it is to take advantage of its relatively strong fundamentals, Morgan Stanley says. Natural gas supply problems in Argentina will continue to affect Argentina as well as Chile. The Argentine government has vastly increased the export duty for natural gas in the past several years, severely curtailing exports, Methanex says.
Methanex's four production facilities in Chile have been entirely cut off from Argentine gas since mid-2007. The company is currently running just one of those facilities, and while it expected to have another come online by the end of 2010, that is now not expected until late 2011. Domestic gas from Chile is now providing feedstock for Methanex's one in-production facility, and the company has prioritized further exploration and development. It is investing heavily in developing gas fields in Southern Chile, working with ENAP, the Chilean state energy company, to develop the Dorado Riquelme block, and with GeoPark (Hamilton, Bermuda), an oil and gas firm, to develop the Fell Block. However, ENAP has reduced gas deliveries this year, while new wells are not coming online as quickly as Methanex had anticipated, the company says. Still, Methanex expects drilling activity in southern Chile to continue to rise, and that, long-term, domestic gas will provide significant supply to the company's Chilean operations..
ChemicalWeek
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French Dock Strike Disrupts Channel Port | |
January 12, 2011 - French dock strike disrupts Channel port: union A dockers' strike shut down shipping terminals at France's second biggest port of Le Havre on Wednesday but did not affect cross-Channel ferry services, a union source said.
All dock workers and a large number of port staff at the northwestern port joined a national strike to press demands for early retirement for those who carry out hard physical work, said the FNPD-CGT union.
But petroleum shipping was not affected, said the source, who asked not to be named. National strikes late last year caused major disruption to shipments and oil terminals, particularly in the southern port of Marseille.
The union said the current strike would last until at least Sunday.
Expatica
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| US railroad freight traffic continues to rise |
January 12, 2011 - The Association of American Railroads has revealed that US railroad freight traffic stood at 240,073 carloads for the week ending 1 January 2011, a 5.6% rise compared with the same week last year.
Intermodal traffic for the week totalled 166,894 trailers and containers, up 11.9% compared with the same week a year ago, with container volume up 10.9% and trailer volume up 18.1%.
For the full 52 weeks of 2010, US railroads originated 14,820,128 carloads, up 7.3% from last year, and 11,282,336 trailers and containers, up 14.2% from 2009.
Carload volume on eastern railroads was up 2.5% compared with 2009, while in the west, carload volume was up 7.4%.
Canadian railroads reported a cumulative volume of 3,789,335 carloads, up 16.7% from 2009, and 2,441,518 trailers or containers, up 15.6% from 2009.
Combined North American rail volumes for 2010 on 13 reporting US, Canadian and Mexican railroads totalled 19,322,414 carloads, up 9.4% from 2009, and 14,076,432 trailers and containers, up 14.7% from 2009, according to Railway Technology.. Transport Weekly
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European box volumes up last year |
But latest statistics show exports declining towards year-end January 12, 2010 - European container volumes strengthened last year.
Total trades between January and November were 15.4% higher than in 2009 for imports, while exports were up 10.3%.
The latest data from Container Trade Statistics (CTS) shows exports from Europe to Asia increased 3.6% to 463,600 teu in November compared with 447,600 teu in October.
European imports from Asia in November totalled 1.1 million teu, up 1% on October.
However, the report adds that exports from North Europe to Asia declined in November for the third month in succession, and were 12.5% down on August's peak for 2010.
And rates on the trade continued to soften in November, for the fourth consecutive month. CTS's Asia-Europe price index, which uses average rates in 2008 as a base figure of 100, was 102 in November.. IFW
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| NY-NJ Terminals Closing For Winter Storm |
Region braces for a foot of snow as storm comes up from south January 11, 2011 - The Port of New York and New Jersey will close all its marine terminals on Wednesday as the port braces for a winter storm expected to drop up to a foot of snow on the region.
The snowstorm is part of the winter blast that has pummeled the south this week and made many roads from Georgia to Tennessee and the Carolinas impassable.
It was racing Tuesday night to the Northeast, where the New York City region was expecting snow to pile up from late in the evening into Wednesday morning.
The Port Authority of New York and New Jersey said Its terminals will reopen on Thursday with normal gate hours.
It asked truckers to wait until then before traveling to the port because no queuing of trucks will be allowed on the roads leading to the terminals.
To make up for the time lost due to the winter storm, the Port Newark Container Terminal and Maher Terminals, including Maher's Empty Depot at Columbia's facility, are scheduled to be open on Martin Luther King Day, Monday Jan. 17.
The SeaLink Office and Truck Replacement Center will be closed Monday, Jan. 17.. Journal of Commerce
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| New Rule Blocks Hazmat Exports to Thailand |
U.S. chemical exporters seek alternatives after OOCL notice
January 10, 2011 - Some ocean carriers are suspending delivery of hazardous materials at Thailand ports because of a new Thai regulation requiring advance payment of insurance.
The regulation implemented by Thailand's Maritime Department as of Feb. 11 requires all carriers transporting dangerous goods to and from Thailand to provide insurance to cover any third parties who may be affected by loading and discharging of dangerous goods.
OOCL notified shippers last week it has temporarily suspended booking of any dangerous goods shipments going through Thailand ports on and after Feb. 11.
"The proposed insurance, besides other conditions, requires advance payment without any proof of fault and this condition cannot be accepted by our international P & I Clubs," OOCL said in its notice to shippers.
One U.S. chemical exporter said the required insurance, which carriers would pass along to it and other chemical shippers, would make it too expensive to continue shipping hazmats directly to Thailand by ocean.
In the wake of OOCL's notice, U.S. chemical exporters are exploring other ways of shipping hazmats to Thai customers. That could send some to overland transport through neighboring Malaysia until Thailand's Maritime Department modifies the regulation.
Journal of Commerce
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| US, World Customs to Curb Dangerous Chemical Traffic |
Officials vow to interdict precursor chemicals used for improvised explosives US January 6, 2011 - The U.S. will work through the World Customs Organization to strengthen international security standards to prevent traffic in chemicals that can be used by terrorists to make bombs, Homeland Security Secretary Janet Napolitano said Thursday.
The U.S. is committed to working with other nations to strengthen global supply chain defenses against terrorists and to build more resilience into the system to assure quick recovery from attacks, Napolitano told shippers, carriers and government officials at a meeting in Brussels.
WCO will work to build international consensus on security standards and help countries deploy the latest detection technology, Kunio Mikuriya, the organization's director general, said.
Thwarted attacks on the air cargo system last October by terrorists based in Yemen showed the necessity of greater international cooperation, Mikuriya said.
The two officials focused their remarks on tracking and interdicting the movement of precursor chemicals that are the raw material for improvised explosives. DHS has established a center to focus on exports of precursors that are in general use in the U.S., Napolitano said.
Journal of Commerce
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| Indonesia mulls new airport for Jakarta |
January 10, 2011 - Indonesia's government is considering building another airport near Jakarta as the capital's main flight hub will not be able to accommodate future passenger growth in Southeast Asia's biggest economy, an official said.
The government is also looking at boosting the capacity of the Soekarno-Hatta international airport, now serving about 35 million passengers a year, said Herry Bakti, director general for air transport at the transport ministry.
He said passenger growth each year is around 15-20 percent. Inadequate infrastructure in the country is seen as both a deterrent to foreign direct investors and an investment opportunity, with Japan already funding transport projects.
"We plan for multiple airports in the Jakarta metropolitan area," Bakti told Reuters, adding a study on the issue will be completed by the end of this year.
The government has asked the Japan International Cooperation Agency (JICA) to conduct a visibility study exploring the main airport's expansion and to develop new facilities, the Jakarta Globe newspaper y quoted I Ketut Feri Utamayasa, spokesman for airport management firm Angkasa Pura II, as saying.
Indonesia and Japan signed a deal last month in which Japan will fund transport infrastructure projects worth US$24 billion around Jakarta, while other Asian nations and private equity firms are eyeing infrastructure.
Bakti said the government is considering commercialising two existing airports in Jakarta, the Halim military airport and a police airport, or creating a new one in industrial areas further outside the capital, in Banten to the west on Java island or Karawang to the east.
Cargonews Asia
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