Rates for very large gas carriers already jumped 24 percent to $68 a metric ton since May 10, according to the Baltic Exchange, a London-based publisher of shipping prices on more than 50 maritime routes. That would mark the largest weekly rally in data going back to 2005 if costs stay the same today or rise, according to the bourse.

The U.S. is shipping more LPG than ever as a byproduct of record natural gas output, Energy Department data show. Trading is expanding because the fuel is cheaper in the U.S. than Europe, according to Diego de Potter, deputy chartering director at Exmar NV (EXM), the Antwerp, Belgium-based operator of two VLGCs. Port expansions and rising voyages to Asia adding cargoes and employing carriers for longer, said John Lording, who specializes LPG at Clarkson Plc, the world’s largest shipbroker.

“The VLGC market is quite finely balanced, so you only need to have an extra handful of cargoes and the market reacts very positively,” Lording said by phone today. “Owners are very happy.”

Enterprise Products Partners LP (EPD) more than expanded monthly capacity at its Houston export facility by 3.5 million barreles to 7.5 million barrels in March. The U.S. produced a record 29.8 trillion cubic feet of natural gas last year and exported an unprecedented 71.9 million barrels of LPG, according to Energy Department data. The country’s exports rose 15 percent to 5.9 million barrels in the year to February, the most-recent data show.

Nippon Yusen

The publicly traded ship owner with the biggest fleet of the largest LPG carriers is Nippon Yusen K.K. (9101), based in Tokyo, according to data from Clarkson’s research unit. Shares of the company, which also operates vessels including oil tankers, coal and iron-ore transporters, and car carriers, will rise 8.3 percent to 287.08 yen ($2.81) in a year, according to the average of 12 analyst forecasts compiled by Bloomberg.

One gallon of propane costs 94.25 cents in Houston, compared with $2.07 in northwest Europe and $2.95 in Japan, according to data compiled by Bloomberg.

Source: Bloomberg

Maersk Line’s net income totaled $204 million, compared with a loss of $599 million a year earlier, the Copenhagen-based group said today in a statement. That beat the average estimate of $160 million in a Bloomberg survey of six analysts.

The shipping operator has slimmed down its fleet and slowed vessel speeds to curb capacity as falling consumer demand hurts cargo volumes and carriage prices. Group earnings fell 35 percent as profit from an oil division tumbled, Maersk reported.

“Maersk Line is much more competitive and has gained strength to deal with the challenging shipping markets,” Chief Executive Officer Nils Smedegaard Andersen said in the statement which cautioning that container demand will remain “subdued” in 2013, making managing supply “even more important.”

A.P. Moeller-Maersk shares rose as much as 2.6 percent before trading 0.8 percent higher at 41,560 kroner as 10:10 a.m. in Copenhagen trading. The stock has lost 2.5 percent this year, valuing the company at 178 billion kroner ($31 billion).

Rate Gain

Maersk Line cut unit costs 7.1 percent in the quarter as volumes fell 4 percent, while its freight rates rose 4.7 percent. The unit continues to forecast that full-year net income will exceed 2012’s figure.

First-quarter profit was aided by lower fuel usage and the hiring-in of vessels with lower depreciation, Roger Elliot, an analyst at Citigroup Inc. said in a note to clients. The outlook for profitability at the division remains unclear since shipping -rate comparatives are tougher in the second quarter, he added.

Maersk revised its forecast for growth in global container demand to a range of 2 percent to 4 percent from 4-5 percent.

Container rates will stay under pressure as fleets expand 7.5 percent, exceeding growth of 4.5 percent, according to Drewry Maritime Equity Research, which says the industry must idle more ships to support pricing.

“Freight-rate volatility will be a defining feature of the decade,” Martin Dixon, a London-based researcher at Drewry, said in a presentation yesterday.

The $710 million quarterly profit for A.P. Moeller-Maersk as a whole — down from $1.08 billion — was hurt by a 73 percent drop in earnings to $346 million at Maersk Oil.

The performance of the company’s most profitable division was hurt by lower crude prices, decreased production and an absence of tax and divestment gains.

Source: Bloomberg

Platts assessed the daily Panamax freight rates from South Kalimantan to the west coast of India at $8.50/mt and to the east coast of India at $7.50/mt, both unchanged on-day but down 50 cents and 25 cents week-on-week, respectively.

Platts also assessed the daily Panamax freight rates from Richards Bay to the west coast of India at $14.50/mt and to the east coast of India at $15/mt, both unchanged day-on-day and week-on-week.

Activity on the east coast of South America (ECSA) remained steady and coal-cargo movement in the Pacific basin was strong, but there were plenty of vessels available, sources said.

“Many June requirements have now been covered, and with no shortage of ballasting vessels expected to arrive at the usual EC S America grain ports next month, forward voyage freights have taken another tumble,” broker Braemar Seascope said in its weekly note on Thursday.

A Panamax coal fixture was reported earlier this week from the east coast of Australia to Paradip Port on the east coast of India at $16.20/mt, sources said.

“A pessimistic short-term outlook is causing owners to rethink their strategy, and appetite for coal trips from Indonesia or EC Australia into EC India have waned compared to the last couple of weeks,” Braemar said.

Short Pacific round trips are increasing in popularity amongst owners given the market circumstances, but Indonesian coal volumes have not been sufficient to match the growing tonnage list, the broker said.

A Thailand-based source said that although there were several inquiries for coal cargoes, freight rates remained subdued due to a fall in bunker prices.

Grain activity from ECSA has been stable and the Pacific basin has been supported by some coal cargoes, but wide availability of tonnages is helping charterers to push down Panamax freight rates, Greek shipbroker Intermodal said in its weekly note on Tuesday.

“The forward curve is falling gradually, as could be the trend for the coming weeks,” broker Fearnleys said in its weekly note on Wednesday.

“In the Eastern hemisphere volumes are low and new business scarce. With a long list of open tonnage many owners still look for ECSA runs,” the broker said.

RICHARDS BAY INACTIVE

A Dubai-based source noted that activity on the west coast of India had decreased slightly this week, adding that nearly 90% of the vessels were avoiding piracy zones when making their voyages to India, reducing costs.

There are some limestone and other cargoes coming into India from the Persian Gulf, he noted, adding that coal cargoes from Indonesia to India were available for both Supramaxes and Panamaxes.

However, activity on the Richards Bay to India route remains muted for Panamaxes, although a few cargoes were available for both Supramax and Capesize vessels, sources said.

A Singapore-based source said that a Supramax cargo had been recently fixed from Richards Bay to the east coast of India at $17/mt. For Capesizes on this route, owners were seeking rates of $11/mt, while charterers’ ideas were not immediately available, he added.

Source: Platts

Mitsui O.S.K. Lines, Ltd. (MOL) announced the completion of a tabletop drill done in cooperation with the fifth Regional Coast Guard Headquarters. The scenario entailed a containership operated by MOL Liner Division (Hong Kong) and managed by an MOL Group ship management company (Hong Kong) colliding with a coastal freighter in Osaka Bay, Japan.

The drill was held on Thursday, May 16, with aim to further strengthening MOL’s emergency response structure, which is based on the MOL Group Corporate Principles – protecting the environment by maintaining strict, safe operations, and navigation standards. The exercise also was designed to ensure the smooth, precise communications that are so critical in the event of a marine incident, involving an MOL-operated containership in which containers and hazardous objects or materials go overboard and a fire breaks out.

Main participants included fifth Regional Coast Guard Headquarters, MOL president,  executives and relevant divisions, which teamed up to organize an Emergency Control Headquarters, MOL Liner Division (Hong Kong), the ship management company New Asian Shipping Co., Ltd., and ship management headquarters MOL Ship Management Co., Ltd.

The drill scenario was that the containership, which was under way toward Port of Kobe, collided with a coastal freighter in Osaka Bay, which was also under way in the bay. The collision caused containers and hazardous objects on the vessel gone overboard and a fire broke out on the deck.

The scenario began with a report from the containership. MOL immediately reported the incident to the fifth Regional Coast Guard Headquarters. MOL then organized an Emergency Control Headquarters within the company, took first-response tasks and procedures that included information gathering, communications among the concerned parties, and directions and instructions to the vessel, and held a joint media response drill.

The company continues to sharpen its group-wide emergency response readiness by sharing know-how accumulated in these training sessions throughout the MOL Group and its fleet.

Source: Marine Link

ICTSI is partnering with Anglo Ports for the bid and together the two parties bring extensive sector expertise to the project spanning container terminal development, operations and logistics chain know-how.

ICTSI is one of the pioneers of taking its container terminal expertise overseas and now manages and operates a portfolio of 27 marine terminals in 19 countries. The company is headed up by billionaire Enrique K. Razon Jr., ICTSI Chairman and President, who over the last decade has overseen a period of remarkable growth for ICTSI in both developed and emerging markets. Mr Razon has other substantial business interests that include casinos and mining.

The ICTSI group has a market cap in excess of USD4 billion and in 2013 is expected to handle over 5m TEU (five million TEU). Its flagship Manila container terminal handled an annual volume of 1,826,176TEU in 2012 and it will soon bring into service its new Manzanillo, Mexico terminal, developed on a BOT basis, offering an initial annual capacity of 650,000TEU growing to in excess of 1.5m TEU over time.

This year ICTSI celebrates its 25^th anniversary and it has commenced well with ICTSI being named as the recipient of the prestigious Best Managed Company in Asia for Transportation/Shipping Award from Euromoney. The award is based on the feedback of equity analysts at the largest banks and research organisations based in the Asia Pacific region. Analysts praised ICTSI for its leading role in promoting transparent communication to investors, citing that “the company has a clear strategy and good visibility.” ICTSI possesses a range of blue chip investors with the majority based in Europe and the USA.

Anglo Ports is headquartered in Australia and is headed up by Chairman Capt. Richard Setchell, former Chairman and Managing Director of P&O’s global ports empire. Capt. Setchell and his management team have an intimate knowledge of container terminal operations on the Australian waterfront and a strong understanding of how best to meet new liner and cargo shipper requirements.

The consortium of ICTSI and Anglo Ports were formerly short-listed bidders in the new Brisbane and Port Botany Third Container Terminal bidding processes.

ICTSI is a leading port management company involved in the operations and development of 27 marine terminals and port projects in 19 countries worldwide.  The company was among the first international terminal operators to take its expertise overseas.

Source: Press Release

The Chinese maritime surveillance vessels were spotted off the Senkaku islands, which China calls the Diaoyus, in the East China Sea at around 2:30 pm (0530 GMT), the coastguard said.

It is the latest episode in a fraught few months that has seen repeated stand-offs between official ships from both sides as they have jostled over ownership of strategically-important and resource-rich islands.

The territorial row blistered in September when Tokyo nationalised three islands in the chain, in what it said was a mere administrative change of ownership and one intended to pre-empt a more volatile purchase by nationalist Tokyo governor Shintaro Ishihara.

Tokyo’s move prompted angry anti-Japan demonstrations across China, which has intensified claims to the islands it says should have been “returned” in the post-World War II settlement Tokyo made.

Source: The Hindu Business Line

Deliveries to Singapore in June will cost an average $1.25 a metric ton more than July contracts in the second half of this month, according to the median estimate of five traders surveyed by Bloomberg this week. The difference was $4.50 on May 1, the most since September 2012, and averaged $2.36 in the first half of the month.

The fading premium shows how Europe’s recession and China’s economic slowdown is hurting the market for a commodity used to power the ships that carry 90 percent of the world’s traded goods. Europe’s exports to Asia are poised to rise to the highest in four months as it struggles to emerge from a recession that’s sapping local demand. At the same time, Chinese refineries that use the fuel to make more valuable gasoline and diesel are cutting purchases as growth slows.

“It doesn’t get more attractive from here,” Miswin Mahesh, a London-based oil analyst at Barclays Plc, said by phone on May 10. “Any time there is a spike in fuel oil, we continue to say fade the rally.”

The swap for 180-centistoke fuel oil for earliest delivery cost $607.75 a ton yesterday, bringing its decline this year to 1.1 percent, according to data from PVM Oil Associates Ltd., a London-based broker. The contract for the fuel in two months cost $606, down 2.1 percent this year.

Traders’ Outlook

Four traders surveyed by Bloomberg forecast the premium between the first- and second-month contracts will range from parity to $1.50 in the second half of May. One predicted it would widen to about $7, citing a shortage of the material needed to blend with it to make shipping fuel, or bunker. It was at $1.75 a ton yesterday.

Deliveries from Western countries to Asia this month may rise to 4.4 million tons, up from 3.5 million in April, according to data compailed by Bloomberg. That’s the most since January. Shipments from Europe increased to 2.5 million tons, or 57 percent of the total, compared with 1.3 million, or 38 percent in April.

The euro-area economy shrank 0.2 percent in the three months ended March, extending the region’s recession to a record sixth quarter. That followed a 0.6 percent decline in the previous three months, the European Union’s statistics office in Luxembourg said May 15.

Oil consumption in European countries that are members of the Organization for Economic Cooperation and Development will fall 2.4 percent to 13.4 million barrels a day this year, according data from the International Energy Agency in Paris.

China’s Teapots

At the same time, fuel oil demand from refineries in eastern China known as teapots that import the oil to make motor fuel has been weakening as the country’s economic growth slows, according to C1 Energy, a Shanghai-based commodity researcher.

“Chinese teapots are not buying at the moment because they need to destock both fuel oil as feedstock and diesel as products amid low run rates,” Sophia Ma, a Guangzhou-based oil analyst at C1 Energy, said by phone. “We are not too optimistic about the outlook.”

Growth in China, the world’s second-largest economy, slowed to 7.7 percent in the first quarter, down from 7.9 percent in the previous three months. That drove its stockpiles of diesel, which fuels trucks and machineries, to the highest in almost a year in February and March, according to data released by Xinhua News Agency’s China Oil, Gas and Petrochemicals newsletter.

China’s teapot refineries cut operating rates to 24 percent on April 18, the lowest in at least three years, according to Oilchem.net, an industry website. The run rate rose to 29.1 percent as of May 2.

Shipping Fuel

Shipping fuel sales in Singapore, the world’s largest vessel-refueling port, fell 1.6 percent to 13.9 million tons in the first four months compared with a year earlier, data from the city-state’s maritime authority show. April sales rose to 3.6 million tons from 3.4 million in March.

Demand from ship owners is falling this month because purchases in April covered their needs, according to Oliver Imaizumi, a senior manager at Petro Summit Pte in Singapore.

“Demand right now is stable, but not that much compared to last month,” Imaizumi said by telephone from Singapore, “Ship owners took the bunker in April so they don’t really need to top up volume in May.”

Singapore Stockpiles

Singapore prices for 380-centistoke fuel oil, the grade used for bunker, fell to $596 a ton on May 15, the lowest in more than five months, according to data compiled by Bloomberg. The price has slid 10 percent from the high of $663.50 in February. It averaged $626.53 this year.

Residual-fuel inventories in Singapore rose for a third week to the highest level in more than five months, according to a unit of the Ministry of Trade and Industry.

Inventories including fuel oil and low-sulfur waxy residue and excluding bitumen gained 2.63 million barrels, or 13 percent, to 22.3 million in the seven days to May 15, International Enterprise Singapore said in an e-mailed statement. That’s the highest since the week ended Dec. 5.

“The market has been strong mainly because of lack of blending stocks,” said Jit Yang Lim, a Singapore-based analyst with KBC Energy Economics. “With a lot of shipments coming in with all the quality fuel oil, that should ease the cracks in the coming month.”

Source: Bloomberg