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Southern Chinese ports prioritize thermal coal imports; coking coal buying slows

Coking coal end-users in southern China are taking a step back from making seaborne purchases, given that port authorities are now prioritizing thermal coal imports over coking coal to meet summer power generation demand, trade sources said this week.

Under current import restrictions on coal in southern China, authorities at ports such as Fangcheng, Xiamen and Kemen were allocated import quotas for the year by provincial governments and the General Administration of Customs. The port authorities in turn, allocate these quotas to power plants and steelmakers. At Fangcheng port in southwestern China’s Guangxi province for example, about 4 million mt of coal import quotas were left for the second half of this year, and coking coal volumes were understood to have been, or close to being maxed out for the year, according to sources’ estimates.

Korean steelmakers demand to freeze shipbuilding plate prices

South Korean shipbuilders on Monday called on steelmakers to keep the prices of shipbuilding plates at current levels until their businesses are back on track.

In a statement released Monday, the Korea Offshore & Shipbuilding Association demanded that steel firms freeze the prices of thick steel plates as any price hike will threaten their survival amid declining orders and tougher competition with Chinese rivals.

Shipbuilders face a double blow of declining sales and deteriorating profitability. As shipyards cannot pass most of the rising raw material prices onto clients, they are expected to have their worst annual performance in history, the statement said. In the first half of the year, thick steel plate prices rose 50,000 won (US$44) per ton. Another 50,000 won increase a ton in the second half would cost shipbuilders an additional 300 billion won in manufacturing costs, it said.

As sanctions start to bite, Iran crude exports to fall

Iran’s oil exports could fall by as much as two-thirds by the end of the year because of new US sanctions, putting oil markets under huge strain amid supply outages elsewhere in the world. Washington initially planned to totally shut Iran out of global oil markets after President Donald Trump abandoned a deal that limited Iran’s nuclear ambitions, demanding all other countries to stop buying its crude by November.

The United States has since somewhat eased its stance, saying that it may grant sanction waivers to some allies that are particularly reliant on Iranian supplies.

But most analysts still think the sanctions will significantly reduce Iran’s crude oil exports with some of the worst case scenarios forecasting a two-thirds drop to only 700,000 barrels per day (bpd). Energy consultancy Facts Global Energy (FGE) thinks Iran’s crude exports could fall to only 700,000 bpd because of sanctions. Those exports would mainly go to China, with smaller shares going to India, Turkey and to other buyers with waivers. Another 100,000 bpd of condensates could find their way to China, buyers with waivers and possibly to the United Arab Emirates and Korea, FGE says.

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Beijing, Tokyo and Seoul shipbuilders struggling

Shipbuilders in China, Japan and South Korea are locked in a struggle for survival amid a global supply glut and shrinking market, as each government digs in its heels to protect these major employers.

The world’s shipbuilding companies are concentrated in the three East Asian countries, which together control 90% of global market share. Advanced and affordable Japanese shipbuilders beat out European rivals in the 1950s to lead the world for roughly 40 years. But competitors arose in South Korea in the 1990s and in China the next decade. Companies from either country have held the top spot since 2010. Overcapacity has plagued the industry worldwide. Shipbuilding volume soared after 2003 as the Chinese economy expanded, but plummeted following the 2008 financial crisis to 18.84 million gross tons in 2016 from 131.88 million gross tons in 2006.

 

Hapag-Lloyd hikes rates on far East-Arabian Gulf cargo

German shipping giant Hapag-Lloyd will increase rates US$300 per TEU on cargo from the Far East to the Arabian Gulf from August 1. The company’s fleet of 230 ships of 1.6 million TEU transport annually 7.6 million TEU.

Hapag-Lloyd has one of the world’s largest and most modern reefer container fleets and operates global network of more than 130 liner services. The company employs 13,000 at 360 locations in 125 countries.

Port of long beach has best month ever, up 4.4pc to 752,188 TEU

Long Beach container volumes reached record highs in June, surging past those of June 2017, the port’s previous best month ever, reports the American Journal of Transportation.

Trade increased 14.2 per cent in June, compared to the same month in 2017. The port’s terminals moved 752,188 TEU, 4.4 per cent higher than the ‘best month ever’. Through June, the port has handled nearly four million TEU, a 14.5 per cent year-on-year increase.

June also topped the port’s best second quarter with 2.1 million TEU, a 10 percent increase year on year. Imports in June were up 14.5 per cent to 384,095 TEU. Exports numbered 135,168 TEU, growing 14.3 per cent. Empties totaled 232,926 TEU, a 13.6 per cent increase.

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