China planning more US coal imports to cut deficit
China is considering a plan to buy more American coal as part of an effort to narrow its trade deficit with the US, sources quoted as saying last week. Chinese officials are currently looking at boosting purchases from West Virginia in particular, said the people, who asked not to be identified because they’re not authorized to speak publicly. They didn’t say whether Beijing is looking at buying more supplies from other states. A final decision hasn’t been made, they said.
China this month pledged to increase purchases of US energy and agricultural goods as a way to reduce its $375 billion merchandise trade deficit and diffuse an escalating trade war between the world’s biggest economies. More imports by the Asian nation would be a boon for American coal-producing states — including West Virginia — that supported Donald Trump’s presidency on the back of his pledge to revive the ailing industry.
Iran’s oil exports fall in May
Iran’s crude oil exports have declined slightly in May, according to estimates from a leading tanker-tracking company, in the first sign that the threat of US sanctions may be deterring buyers. The estimates from Geneva-based Petro-Logistics also suggest Iranian oil buyers are not rushing to cut volumes from OPEC’s third-largest producer.
The US sanctions have a 180-day period during which buyers should “wind down” purchases. US President Donald Trump on May 8 said the United States was exiting a 2015 international nuclear deal with Iran and would impose new sanctions that seek to reduce the country’s oil shipments.
Petro-Logistics did not specify the absolute volume of Iran’s exports in May or April. Iran said it exported 2.6 million barrels per day (bpd) in April, a record since the lifting of international sanctions on Tehran in January 2016.
Indonesia, India plan to develop strategic Indian Ocean Port
Indonesia and India pledged on Wednesday to step up defense and maritime cooperation, with plans to develop a strategic Indonesian naval port in the Indian Ocean, the leaders of the two countries said after meeting in Jakarta.
Indonesian President Joko Widodo met Indian Prime Minister Narendra Modi to discuss, among other issues, developing infrastructure and an economic zone at Sabang, on the tip of Sumatra island and at the mouth of the Malacca Strait, one of the busiest shipping channels for global trade.
Chinese and South Korean support for shipbuilders irks Japan
Japan is growing frustrated by government assistance in China and South Korea to their ailing shipbuilding industries, with Prime Minister Shinzo Abe even broaching the issue with his counterparts at a trilateral summit earlier this month.
But it is unlikely that Seoul and Beijing will do much to address Tokyo’s concerns. Japan, which feels itself at a disadvantage on costs, is criticizing Beijing and Seoul for public-sector assistance to their flagging shipyards, which Tokyo asserts is causing an overcapacity and supply glut in those countries. From their perspective, however, China and South Korea are loath to let shipbuilders sail into choppy waters because they employ big workforces.
South Korea to provide economic support to hard-hit shipbuilding regions
South Korean Finance Minister Kim Dong-yeon said last Tuesday the government will designate five key shipbuilding centers on the country’s south coast as “industry crisis” zones eligible for economic support. The areas include Dong-gu in the city of Ulsan, Geoje-si of Kyong-nam province and Jinhae-gu of Changwon, as well as Tongyeong and Mokpo in the southwest coast.
These areas are home to heavy shipping and shipbuilding companies and have struggled with high unemployment in recent years. South Korea’s shipbuilding and shipping companies have undergone massive restructuring in recent years amid a slowdown in global demand and rising competition from China.
Brazil farm exports hurt as strike holds up soybeans, sugar
An nine-day-old strike by Brazilian truck drivers is beginning to affect global commodity markets as soybean traders delay shipments and the country’s vast sugar industry shuts down more of its processing plants.
Chinese food giant Cofco International temporarily suspended soybean shipments from Santos, Brazil’s largest port, because of a shortage of cargoes for export, according to people with direct knowledge of the matter, who asked not to be identified because the information hasn’t been published. All of Sao Paulo state’s sugar cane mills will suspend operations until May 29 amid a shortage of diesel, needed to power plants, according to industry group Unica.
US sanctions start to pinch shipping in Iran
It will be months before new US sanctions against Iran take hold, but global shipping operators are already pulling back from the big oil-exporting nation.
The world’s two biggest shipping lines, Denmark’s Maersk Line and Swiss-based Mediterranean Shipping Co., said they were winding down general cargo shipments, while tanker owners said they plan to move their vessels to other oil-producing countries in the Middle East or West Africa.
The Trump administration has given the industry until early November to end operations in Iran, which exported a record 2.6 million barrels of crude a day in April. The sanctions also will affect ship-insurance premiums, lines of credit for moving cargo, and ship-fuel suppliers. Pulling Iran off the service map for crude carriers will be a blow to the world’s tanker operators. Shipowners in that sector have suffered from a glut of global capacity and now will see the world’s fifth-biggest oil producer removed from their market. Iran accounts for 5 percent of global output and the majority of Iran’s oil is exported to China, Japan, India and South Korea.