Home' Ships and Shipping : July 2009 Contents NEWS–ASIA
July 2009 SHIPS AND SHIPPING
In late May, German ship analyst Eckhardt Marine reported
that China had the ability to attract more ships for
demolition than any other nation.
In the last week of May, Chinese ship-breakers landed several
projects at firm levels at US$230 per tonne lightweight. However,
Eckhardt noted that the first signs of market softening might be
present due to lower interest and declining price levels.
Meanwhile, China’s rival, Pakistan, obtained prices of
US$260 to US$280 per tonne lightweight depending on the ship
type and size.
Indian shipbreakers maintained a firm price of US$255 per
tonne lightweight. According to Eckhardt, 14 units were
committed to Indian ship-breakers at the end of May while
eleven ships were waiting for beaching.
China continues lead over Pakistan, India for ship demolition
Lower prices and declining interest in ship-breaking may indicate early
According to the Yangtze River
Administration, a total of US$6.3
billion will go towards navigational
improvements in the busy Yangtze River.
Works will be completed by 2020.
The upgrades call for an extension to
the river's deepwater navigation course, a
widening of parts of the narrow channel
in the middle reach and the purchase of
Wang Qufa, an official at the river's
administration, said that the upgrades were
to ensure the continued efficient use of the
river. He said that one shipping accident at
a vulnerable part of the river would be
enough to block the entire course.
Unlike the ocean transportation
industry, the inland shipping industry has
not seen a slowing in volumes caused by
the global economic downturn, said
Wang Jianbin, a water transport official
with the ministry.
“Infrastructure construction projects to
boost economic growth have meant the
placement of more orders for steel, cement
and other materials,” Mr Wang said.
“Inland river transport has been much used
in transporting such materials.”
Since 2000, the volume of cargo
transported on the Yangtze River has risen
by ten percent each year. Last year, the
volume hit 1.2 billion tonnes, making the
river the world's busiest-by-volume for the
fourth consecutive year. The volume
handled is predicted to pass 1.8 billion
tonnes a decade from now.
Buoyant future for Yangtze shipping
Chinese inland shipping has seen little slowing
due to global finances
The first quarter revenue at Daewoo Shipbuilding & Marine
Engineering (DSME) was down 19.8 percent from the fourth
quarter of 2008 to US$2.37 billion. Furthermore, DSME’s
operating profit fell 73.1 percent to US$12.3 million.
According to Asiasis, the disappointing quarterly result was
due to the increase of raw material purchase costs exacerbated by
the large discrepancy between the Korean Won and US Dollar
In other news, DSME recently launched four vessels. On May
19, DSME launched a 173,400m3 LNG vessel for Knutsen. On
May 17, Daewoo launched Hull 4175, an 8,400TEU boxship for
NRS and Hull 4144, a 4,400TEU containership for T&H. Both
these vessels were launched at Dock Number 2.
Finally, Daewoo launched Hull 4144, also for T&H. This vessel
is the first of a series of eight containerships on order.
Daewoo’s revenues down 20 percent
DSME has seen a disappointing fall in profits
Singapore-based Neptune Orient Lines (NOL) has announced
an underwritten renounceable “rights issue” which invites
existing NOL shareholders to acquire additional new shares
in the company at a discount.
Shareholders will have the opportunity to subscribe for three
rights shares for every four existing shares they hold.
The gross proceeds from the rights issue will amount to about
S$1.437 billion, or approximately US$1 billion. About half of the
proceeds will be used to repay debts. The rest will be available for
investments and/or general corporate and working capital
purposes, and/or further repayment of debts.
“Through this, NOL aims to further strengthen its balance
sheet and to place itself in a better position to capitalise on
investment opportunities that may arise in the current economic
climate,” said a press statement issued by NOL.
The company added that its major shareholder, Temasek, was
supportive of the rights issue and had, through its wholly-owned
subsidiary Lentor Investment, given an undertaking to subscribe
for Temasek's 67.4 percent entitlements and has agreed to
sub-underwrite the entire rights issue.
Another poor year so NOL announces a rights issue
The ‘APL Sokhna’ – APL is a subsidiary of NOL
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