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Weekly Issue

APL DEPLOYS US PRESIDENT-NAMED VESSELS FOR ENHANCED EAGLE EXPRESS 1 SERVICE PAGE 2...

July 12, 2018-Thursday

12 Pages

www.portways.in

COMPREHENSIVE EXPORT STRATEGY TO BE FINALISED SOON: COMMERCE MINISTER PAGE 4.....

IN DEPTH: THE BEAST IS TESTING MATERIAL FATIGUE TO IMPROVE FUTURE VESSELS PAGE 10......

PSA's Bharat Mumbai Container Terminals register significant volume growth in June

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cean carriers calling at Jawaharlal Nehru Port Trust (JNPT) appear to have generated increased interest in PSA International’s Bharat Mumbai Container Terminals (BMCT), which began fullfledged operations in February. Although the number of regular, weekly services at BMCT remains static at two — including the Swahili Express (SWAX) jointly operated by CMA CGM and Emirates Shipping in the IndiaAfrica trade, and the Europe-PakistanIndia Consortium 2 (EPIC2) under a vessel-sharing agreement between

Hapag-Lloyd, CMA CGM, and Hamburg Süd the new concessionaire had a flurry of temporary/adhoc calls last month. Port statistics collected by JOC.com show BMCT processed 17 ship calls in June, compared with 10 calls a month since March, after the new terminal settled into a steady/ seamless operation.

VOLUME SURGE AT BMCT As a result, BMCT’s volume surged in June — up 47 percent to 35,882 TEUs, from 28,474 TEU in May. In a fiercely competitive market burdened by excess capacity and prolonged, weak freight demand,

efficiency has become a key factor influencing ocean carriers’ terminal choices, as they seek sustained profitability, largely on cost optimization and scalability business models. Sensing that trend, BMCT has lately emphasized p r o d u c t i v i t y improvements, and greater carrier interest/ more calls may have stemmed from those efforts. New statistics also shows that BMCT handled 2,595 TEUs of railed containers in June, up from 1,060 TEUs in May, and just 180 TEU in April. In addition, its quayside performance has exhibited strong momentum, with gross

crane rates averaging 41.6 moves per hour during May, versus 35.6 moves per hour in April, when measured in TEU liftings. Also, ship turn times averaged no more than a day per call in the same month.

FIRST PHASE OF MAJOR CAPACITY INCREASE BMCT’s first phase features 1,000 meters (3,281 feet) of quay, a 90-hectare (222acre) storage yard with 9,336 ground slots, 12 quay cranes, four railmounted gantry cranes, 36 rubber-tire gantry cranes, and 324 reefer slots. A second phase of the same capacity is targeted for completion by 2022. Terminals at JNPT together handle the majority of Indian containerized freight. Given that important role, a BMCT addition that will enable it to handle 4.8 million TEUs per year, when

ready, combined with its sophisticated ondock rail infrastructure — designed to s y n c h r o n i z e operations with Indian Railways’ flagship Dedicated Freight Corridor project under construction — and other advanced operating systems, can go a long way toward improving/ streamlining the emerging market economy’s supply chains. PSA also has operations at India’s East coast ports of Chennai, Tuticorin (V.O. Chidambaranar), Kolkata, and Kakinada, but a larger portion of the West coast market representing the majority of Indian container trade is the key not only to expanding its footprint in the fastgrowing economy, but also to combating competition from other international markets.


SHIPPING

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PORT WAYS

APL deploys US President-named vessels for enhanced Eagle Express 1 service

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PL has announced the enhancement of its signature Eagle Express 1 (EX1) service as it names six vessels deployed for the service after former US Presidents. Along with the EX1 service refinements that will speed up the North Asian lap from the US West Coast, these containerships will be named President FD Roosevelt; President Wilson; President Cleveland; President Truman; President Eisenhower and President Kennedy, continuing a legacy that began in the 1920s that has seen some 90 APL ships named after

US Presidents. Five of the six vessels are new to the EX1 service. The first vessel in the US President series is currently going through the reflagging process at Global Gateway South (GGS) Terminal in Los Angeles. The enhanced EX1 service will see the current transit from the US West Coast to Naha and Yokohama cut by four and two days, respectively. With Yokohama serving as a relay hub for shipments to Guam and Saipan via its Guam Saipan Express (GSX) service, APL is adjusting the EX1 service to speed up essential cargo shipments from

the US mainland to the islands, especially Guam where 75 per cent of her inbound freight originates from the US. In fact, shipments onboard the GSX service will reach Guam on Monday, the earliest cargo arrival of the week on the island as a result of the EX1 service refinements. This development demonstrates APL’s commitment to service

excellence through the EX1 service which is synonymous with reliable Asia-North America service coverage. According to SeaIntel, APL was ranked the most reliable carrier from Central China to the US West Coast in the first quarter of 2018. Surpassing the industry average on-time performance of 49.6 per cent, APL, through

the EX1 service, achieved an on-time performance of 84.3 per cent. Commencing from Qingdao on July 20, 2018, the enhanced EX1 service’s new port rotation will be: Qingdao – Shanghai – Busan – Los Angeles – Oakland – Yokohama – Naha – Busan – Qingdao, said a release.

Evergreen Line’s China India Express 3 service makes maiden call at Hazira

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v e r g r e e n Line recently enhanced its presence in the trade lane connecting North/Central China and West India by launching its new China India Express 3 (CIX3) service. Evergreen’s maiden vessel to call Hazira Adani Port was the Ever Uranus 124E on June 30,

2018. A small function was held on board to mark the occasion, during which mementoes were exchanged and a cake was cut in the presence of key officials of Evergreen India, BOXCO Shipping Services, the sub-agents of Evergreen India for Hazira, Hazira Adani Port officials as well as the Master of the vessel. The port rotation of the CIX3 service is:

FOR

Qingdao - Shanghai Ningbo - Da Chan Bay Port Klang -Nhava Sheva (GTI) - Mundra (Adani) Hazira (Adani) - Colombo

- Port Klang - Singapore Haiphong - Qingdao. Evergreen’s partners in this service are KMTC, GSL and Pendulum.

EDITORIALS/ ADVERTISEMENTS CONTACT pr@portways.in

Evergreen’s subagent at Hazira will be BOXCO Shipping Services Pvt. Ltd, informed a release.


PORTS &TERMINALS

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Adani coal port faces possible ‘stop order’ after traditional owners object

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dani is facing the prospect of being ordered to cease work in the vicinity of its Abbot Point coal terminal and planned rail corridor, after Juru traditional owners applied for a “stop order” to protect sacred sites. Guardian Australia understands the application was lodged with the Queensland Department of Aboriginal and Torres Strait Islander Partnerships on Thursday by lawyers for Juru Enterprises Limited (JEL). The deputy premier of Queensland, Jackie Trad, who represents a strongly antiAdani inner-Brisbane electorate, has delegated authority to rule on any application for a stop order. Trad will have to decide whether there are “reasonable grounds for concluding the activity is harming, threatening to harm, or will have a significant adverse impact on Aboriginal or Torres Strait Islander cultural heritage” and can grant an initial order for up to 30 days. Juru Enterprises claims cultural heritage surveys conducted for Adani by another group, the embattled Kyburra Munda Yalga Aboriginal Corporation, are “unauthorised”. Some traditional owners have concerns those surveys did not properly identify and protect Juru sacred sites.

Traditional owner Andrew Morrell has previously told Guardian Australia that Adani’s “terminal zero” expansion will be built with just a five-metre buffer to a traditional burial ground. Morrell says the proposed rail route runs through Juru ochre grounds and restricts access to nearby rock art sites. Both the terminal expansion and the rail line are critical parts of the Carmichael mine project. Adani says all surveys conducted by Kyburra are valid and that it has an “absolute legal obligation” to work with the group, which holds in trust the native title rights for the Juru people. Kyburra is under special administration, in significant debt and mired in claims of financial mismanagement. The surveys in question were conducted personally by the directors of the Kyburra for cash fees up to $1,000 a day. In May, the federal court ruled JEL was the appropriate “nominated body” to represent Juru people on a landuse agreement with Adani. The court did not consider or rule on a suite of other agreements, made under the complex framework of state and federal native title law, which remain in dispute. Kyburra’s special administrator, Gerry

Mier, wrote to Adani on 25 May to say the organisation was not permitted to conduct future surveys as JEL was the proper nominated body under the relevant agreement. JEL then sent a series of emails to Adani as the “Juru nominated body” offering to begin the process to survey a proposed expansion area of a cultural heritage management plan. JEL also asked Adani to supply copies of previous “unauthorised” assessments for “urgent reassessment and renegotiation in relation to any proposed cultural heritage activities”. On Thursday, JEL made the formal application for a stop order. Guardian Australia understands the request for an order relates to the construction and operation of Adani rail and port developments on Juru country and gives some examples of areas where traditional owners believe work has been authorised near sacred sites. Sources said the department might seek

to hold a mediation. The department would also likely consider the imminent risk to any sites before making a recommendation to Trad. The application now becomes politically charged. There are varying views on coal – and Adani – within the Queensland cabinet. The government has managed to maintain the appearance of unity by championing both coal and renewables, and by largely ignoring the conflict between them. Trad, the deputy premier and the nominal leader of Labor’s left faction, has discretion to invoke a stop order, without taking the decision to cabinet, as minister for Aboriginal and Torres Strait Islander partnerships. It is likely she would face significant pressure from groups who see the decision as significant because it relates to critical parts of the overall Carmichael mine project. Adani said in a statement last week: “Adani has a track

record of successfully collaborating with the Juru traditional owners and we uphold and follow the relevant legislative processes. We will continue to work with traditional owners to undertake cultural heritage works to ensure the delivery of our project.” The company has been contacted and offered the opportunity to comment specifically on the stop order. Adani on Tuesday reportedly secured a debt agreement for Abbot Point, the coal port it bought for $2bn in 2011. Korean investor Mirae Asset Daewoo reportedly bought the company’s $330m debt on the terminal. Abbot Point has capacity to export 50m tonnes of coal a year, but is currently operating at just over half that. Adani has approval to expand to 120m tonnes a year. That plan involves dredging Abbot Point, near the Great Barrier Reef, and dumping dredge spoil onshore. Source: The Guardian


MINISTRY

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Comprehensive export strategy to be finalised soon: Commerce Minister Union Minister of Commerce & Industry and Civil Aviation, Suresh Prabhu, interacted with the trading houses and exporters in New Delhi on 4 July 2018 seeking suggestions from them to evolve a strategy to increase exports by USD 100 billion in the next few years. He informed them that the merchandise export has been encouraging last year crossing USD 300 billion registering a growth of 10% as against 5% in 2016-17 and added that the Government has taken initiatives to boost exports. Midterm review of the Foreign Trade Policy, an official statement was undertaken which led to increasing export incentives by 33% for MSME and labour intensive sectors. Earlier, Exports Relief Package was announced by

GST Council restoring schemes of duty free procurement of inputs for exports under Advanced Authorisation/Export Promotion Capital Goods. Government has been proactive in GST refunds through the refund fortnight organised in March and June 2018. More than Rs 40,000 crore have been refunded so far. Refund processes are being streamlined further and made fully automated. He mentioned he has had discussions with the Secretaries of key Ministries and also with the States for preparation of sectoral export and State specific export strategies. FIEO also has been asked to prepare a strategy for increase in exports by USD 100 billion in short term. Export-Import Bank of India too has submitted its report about market research for exports.

He sought suggestions from the exporters also to further increase exports by another USD 100 billion in short term. Exporters raised concerns, according to the official statement, about uncertainties in international trade like tariff increases, volatilities in currencies and review of GSP regime by US. Political developments in Iran, Russia and the Middle-East have added to the uncertainties.

Domestically also, cost of credit is showing upward trends, banks are adopting rigid approach in disbursement of credit and liquidity challenges will continue to exist until GST refund process is made fully automatic with minimum human interaction. Exporters suggested for providing branding assistance in existing and new export markets, using Lines of Credit as marketing tool,

support for Research & Development, and promoting e-commerce. Commerce and Industry Minister assured the exporters that Government is fully seized of their concerns and is addressing them in the best interests of the country. He said their suggestions will be incorporated in the comprehensive export strategy to be finalised soon.

MSME Ministry to set up export promotion cell

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he MSME Ministry is looking to set up an export promotion cell this year to coordinate with other Departments and Export Promotion Councils for increasing shipments of products like khadi, leather and coir, and identify clusters that can export directly or through aggregators, a top official said. The move will further streamline strategies aimed at boosting exports from micro, small and medium enterprises, considered

a powerful engine of the country's economic growth, contributing around 45 per cent of the overall shipments from India. "We are trying (that) in our Ministry there should be a cell which is going to coordinate and how we can bring in value and in every sector should also identify potential clusters," Secretary in the Micro, Small and Medium Enterprises (MSME) Ministry, A K Panda, said recently. According to him, the cell once established

should identify potential clusters which can start exporting directly or through aggregators and export houses with the help of export promotion councils, adding "this is what we are going to do this year". Sharing his outlook for coir and khadi exports,

the MSME Secretary said while shipments from the Coir Board stood at Rs 2,500 crore in the 2017-18 fiscal, there is a "tremendous potential" in the coir sector. Besides, he said, the ministry was expecting a "quantum jump" in

the exports by the Khadi and Village Industries Commission this year from only around Rs 200 crore earlier, as they are expected to rise substantially. MSMEs account for about 8590 per cent of leather exports, Panda said. According to estimates, MSMEs contribute around 6.11 per cent to India's manufacturing GDP, 24.63 per cent to the GDP from service activities and 33.4 per cent to the manufacturing output.


LOGISTICS

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Skeiron Logistics eyes bigger pie of the market share with its new office at Delhi-NCR

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keiron Logistics, an ISO 9001:2015, ISO 1 4 0 0 1 : 2 0 1 5 and OHSAS 18001:2017 certified organisation, one of India’s leading logistics solution providers, is further strengthening its position in the market as one of the biggest aggregators of logistics services with the opening of its new office in Delhi-NCR.   The service portfolio of Skeiron Logistics includes Heavy-Lift and ODC Logistics, Freight Forwarding Services,

End-to-End Renewable Energy Logistics and Breakbulk-Dry Cargo Chartering Services. In order to serve its existing and new customers better, the new office is strategically situated in close proximity to the Indira

Gandhi International Airport, New Delhi. The new office space houses professionals and veterans from the industry who will be providing best-in-class logistics services. The team is determined to provide the highest

standards of quality. The logistics industry in India is undergoing phenomenal changes. It is likely to touch US $ 215 billion in the next 2 years. This opens up a plethora of opportunities for businesses. There is a huge need for

a qualitative and dependable logistics partner who can not only cover land, air and sea but also partner with business in providing them cost-effective logistics solutions. With this new office in Delhi-NCR, Skeiron Logistics is eyeing a bigger pie of the Northern India market share, to strengthen its position as the most dependable logistics solutions provider. Skeiron Logistics is in line with Skeiron Group’s growth strategy of expanding its footprint across diverse geographies, emphasised a release.

FarEye starts its delivery experience suite - 'Delight'

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arEye, a leading global digital logistics platform has announced the launch of its Delivery Experience Suite – ‘Delight’. It enables businesses to provide a seamless and personalised experience to the customers. FarEye is a major player in B2C logistics technology and includes clients like Walmart, DHL, Noon and Amway. In the face of volatile, accelerated change and rising customer demands, supply chain and logistics companies are under extreme pressure to maintain or improve current levels of performance. 66 percent of shoppers buy goods from one

retailer in preference to another because of more appealing delivery services offered. It is more evident than ever that with evolving customer expectations a superior delivery experience that offers live tracking, personalisation, and customisation of deliveries becomes imperative. The suite helps companies in transforming customer engagement and experience. FarEye Delight provides superior delivery experience to the customers and increases the first attempt success rate for businesses. It is already in use by enterprises like Blue Dart, Amway, Future Group, Zalora, Noonand many others. Commenting on

the launch, Kushal Nahata, CEO & cofounder, FarEye, says, “While more and more companies understand that providing a great customer experience is necessary for business growth, many have a long way to go, bringing all the parts together to make it a reality. The bottom line is that companies struggle to get a cohesive, holistic, outside-in view of their customers’ experience and that is where FarEye Delight bridges the gap.”

The suite comprises of features like uberized tracking & real-time feedback where customers receive a tracking link along with the estimated time of delivery, offering them a real-time view of the courier. Once delivery is done, they receive a link for sharing instant feedback. Meanwhile, using the live tracking link of their parcel, customers can call or send text messages to the courier about preferred delivery requirements – for

instance, leaving the parcel at the reception, dropping parcel with the neighbors, doorbell not working or any reason that is making the delivery stressful. Apart from this, the suite also provides customised delivery location & time where customers receive a message with the estimated time of arrival of their parcel, which also carries a link for rescheduling. With just a few clicks, customers can change the date, time and place of delivery. It also provides consistent brand logo on all the touch points with the customer irrespective of the multiple partners involved in the parcel delivery cycle.


IN DEPTH

PORT WAYS

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In Depth: The Beast Is Testing Material Fatigue to Improve Future Vessels

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irek Kaminski wants to improve the design method used for ships. “We want to make vessels more sustainable, more effective and more affordable.” Kaminski is professor of ship and offshore structures in the Department of Maritime and Transport Technology at Delft University of Technology and he wants to do this by studying material fatigue. The professor created ‘the beast’, a hexapod weighing about 60 tonnes. This machine will test pieces of vessels. “We don’t know what the outcome is going to be, because nothing like this has ever been tested in the world before.” Until now it’s not been necessary to take material fatigue explicitly into account while designing. If people do take this into account they always use the results of tests that have been done since the twentieth century to discover when a structure fails based on forces that act in one direction. This uniaxial force is insufficient to describe all of the forces that ships are subject to. After all, waves come from all directions. “As soon as we have a more realistic model of how things really are, which takes all forces into account, then we can improve our designs,” the professor says.

More affordable Does that mean that all ships navigating our seas right now are actually unsafe? The professor won’t go quite that far. “If a ship doesn’t break down, that usually means it was built too strong. It’s common for too much unnecessary material to be used, which makes ships needlessly expensive.” But that’s not the main point. “It’s not only a question of using fewer materials, but also adding materials in places where the ship is most likely to suffer damage as a result of fatigue. Essentially you want to only use materials where they’re needed in the future. We can do that by designing more efficiently.” So the level of safety remains the same. “It’s generally said that ships are becoming safer, but actually that’s not true. We want to make them more sustainable, more effective and more affordable.” The test facility at TU Delft (Delft University of Technology) is where it’s all going to happen. It is the home of the hexapod. Weighing about 60 tonnes, it’s also referred to as ‘the beast’. Kaminski is planning to put pieces of ships between it, or to be more precise, structural details no larger than 1 cubic metres with welded parts. “Fatigue in ships always concerns welded materials, because welding causes microcracks, which weakens the joints between two welded structural elements,” he says. He subsequently exerts the

actual forces that a ship will be subject to onto one of these test specimens, as he calls them. Ultimately Kaminski wants to test all characteristic welded structural joints of a ship for a month, during which he can simulate a lifespan of twenty years. The latter is feasible because he can exert the forces with a higher frequency than in reality, 30 Hz to be precise. All directions But how exactly will the orange beast do its thing? “The hexapod can generate forces of 100 tonnes in all directions. That’s important because a ship in the waves at sea also has to deal with loads from all directions,” Kaminski says. He often uses the word multi-axial, which means that the machine can move in six directions in space: surge, sway, heave, roll, pitch and yaw. A mechanical bull and a flight simulator can move like this as well, but the hexapod is the first machine that can exert six forces on a structure simultaneously. The combination of great power, high speed and accuracy makes the hexapod unique. A mechanical bull and a flight simulator can move like this as well, but the

hexapod is the first machine that can exert six forces and high speed on a structure accurately and simultaneously. Brainstorm Four years ago, he organised a brainstorm session with people from industry and science to come up with a method that will take into account all of the different forces in order to determine the lifespan of a structure. “At a certain point I knew what we had to do. I said: “Bingo!”’ says Kaminski, snapping his fingers. During that Eureka moment, he envisioned a machine with six hydraulic arms, which would enable it to subject material to tremendous forces from six different directions. “With my sketch of this machine, I then wrote to eleven companies and asked them if they could make something like that. Ten companies immediately threw in the towel. The only company that wanted to build my idea right away was the German company FGB.” In the meantime, four years have passed and the first and only hexapod in the world is housed at TU Delft. The university invested half of the money itself in the

innovative machine, a quarter came from the government and another quarter came from 23 companies – essentially the entire offshore industry participated. Kaminski calls the hexapod his orange beast. Warm feeling He remembers well the first time he touched his new, six by five by three metres pet. “It felt warm, like a dog. That’s because of the oil that was already in it. That was really amazing. My heart started racing immediately,” the professor says, putting his hand on the machine. “Standing next to it now makes me feel emotional again. My voice starts to tremble and I get tears in my eyes, because for four years it took an enormous effort to design, specify, build and install the hexapod.” Yet the real work is only just starting for the ship expert, because thanks to the hexapod all kinds of structures can be tested so that new models, formulas and designs can be made that describe reality better than the present one. Desiree Hoving , TU Delft


EXIM

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Coal imports in April-May dip marginally to 36 million tonnes

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oal imports in the first two months of the ongoing fiscal registered a marginal decline of 2.6 percent at 36.49 million tonnes (MT). The drop in coal imports comes at a time when some regions, including the national capital, are facing power shortage due to fast depleting coal stockpiles at power plants. “Overall, coal and coke imports during the first 2 months (AprilMay) of 2018-19 stood at 36.49 MT, lower than 37.47 MT recorded for the same period last year,” according to mjuction services, an e-auction joint venture between Tata Steel and

SAIL. Coal import in May 2018 stood at 18.23 MT (provisional), marginally lower than 18.39 MT in May 2017, it said. “The marginal drop in coal and coke imports in May (a decline of 0.5

percent year-on-year) is mainly due to a decrease in coking coal imports during the month under review. There, however, was a slight increase in non-coking coal imports on both yearly and monthly basis,” it said.

On the coal import trend, mjunction CEO Vinaya Varma said, “The low stock position at power plants led to increased demand for non-coking coal import, but it was offset by the sharp increase in spot

prices. Similarly, the recovery in met coal prices after a steady decline made the buyers wait for a clear direction, thus delaying procurement.”

Vibrant Gujarat Summit to shift focus to exports

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big destinations of manufacturing and trade in India. Local businesses are doing well on the domestic front and we are going to offer better linkage with investors.

n a departure from the previous Vibrant Gujarat Summits (VGS) which mostly focused on foreign investment, the Gujarat Government this time is planning to lay emphasis on the exports, trade, commerce and services sectors for the VGS 2019. The intention is to showcase, promote and create market for Gujarat-based companies and domestic products in the world market. “After getting huge response in investment side, the

For start-ups, this platform will open up new markets. Also, we have ready investor base available for start-ups,” said Das. State is now looking to provide a platform to domestic businesses and trade. Innovation, services, trade and exports will be the key areas where the VGS 2019 will focus,” said Manoj Kumar Das, Principal Secretary to

the Chief Minister and In-Charge Principal Secretary of the Industry and Mines Departments. The State Government will focus on facilitating meetings of local manufacturers

and traders with foreign consumer chains or directly with markets. This platform will give better options to start-ups of the state to explore new markets, Das said. “Gujarat is one of the

The Gujarat Government is planning to prepare sector-wise database of local manufacturers and that will be given to foreign delegates.


COMMODITY

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Steel prices to remain stable; NMDC cuts ore prices for Karnataka Indian primary steel producers have extended their product prices for July, despite state-owned NMDC cutting iron ore prices by Rs 300 a tonne in Karnataka (where a lot of the country’s steel is made). NMDC Limited, a state-controlled mineral producer, has reduced prices by Rs 300 a tonne in Karnataka on the backdrop of increasing stocks. In May, NMDC had raised the price of lump ore by Rs 150 to Rs 3,050 a tonne. JSW Steel and Kalyani Steel, major customers for Karnataka miners, including NMDC, did not respond to queries on the subject. However, officials at these companies have said the price cut is not enough; ore sold in other states is of better quality and competitive. Opposing this argument, Basant Poddar, a senior figure

at the Federation of Indian Mineral Industries, said: “Iron ore sales are under a Supreme Court directive. Neither ore or pellets can be exported. Further price cuts will severely dent the working of iron ore mines.” Also, other mining companies in Karnataka say a further price cut will substantially hit the working of iron ore mines in the state. Steel prices in the spot market have, however, declined by Rs 500-700 a tonne in the past three days, reflecting weak demand from consumer industries. Currently Rs 38,633 a tonne, the

benchmark variety of TMT (ex-Mumbai) shows a rise of 14.3 per cent since December 2017. Hot rolled coil in the spot Ludhiana market is up 18 per cent since December, to trade at Rs 46,000 a tonne. “Prices have been rolled over for July. The movement depends upon a number of factors — demand, import, trend from competition and also raw materials. While the short-term prospects for steel prices look rangebound to sluggish, the long-term prospects are good, assuming robust demand post monsoon,” said a spokesperson of

Steel Authority of India. Cheaper import is also keeping steel prices under pressure. “Owing to the ongoing trade war between China and the United States, a lot of steel is being imported into India at cheap rates,” said a spokesperson from Essar Steel. The pile-up of iron ore in Karnataka has forced mining companies to reduce price in the state. Said a big mining company official of the region, “Iron ore is already under-priced. A further price cut is detrimental not only to miners but also impacts state revenue — around

30 per cent of the price goes to the state exchequer in the form of royalty and other charges. Import of ore from other states is worsening the problem. The e-auction process has been a failure. It is now time for ore prices to go by global benchmarking indices.” Analysts, therefore, forecast steel prices to remain stable in India in the short term, followed by a robust recovery after the monsoon. Depreciation in the rupee is likely to make import of both raw materials and finished products costlier. “However, longterm prospects look positive, given an improvement in domestic demand, a weak rupee and strong raw material prices, like those of iron ore and coking coal,” said Goutam Chakraborty, analyst with Emkay Global Financial Services. Source: Business Standard

SAIL raw material division logs record iron ore output, despatches volumes

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he raw material division (RMD) of Steel Authority of India Ltd (SAIL) has logged record growth in iron ore production and despatch volumes in the April-June quarter of this fiscal. The captive iron ore deposits under RMD’s control produced 5.19 million

tonnes of iron ore, growing 15.4 per cent year-on-year (y-o-y) growth. Despatches of ore too rose 16.7 per cent in the June quarter to 5.11 million tonnes. The maharatna PSU’s RMD oversees operations of iron ore mines- Kiriburu, Meghahatuburu, Gua, Chiria in Jharkhand,

and Bolani, Barsua, Taldih, Kalta in Odisha. The mines have also achieved the best ever monthly production of 1.85 million tonnes in June. RMD’s Bolani ores mines has individually clocked the highest ever loading of 151 rakes in June. SAIL ascribed the healthy growth in production and despatch numbers to a string of

systemic changes. The shrinking of loading time of rakes at mines and turnaround time of rakes from steel plants resulted in the highest ever despatch of 1,463 rakes in the June quarter from the RMD mines. Operations at Barsua mines also boosted output. The RMD is ramping up its iron ore production to meet the increasing demand SAIL’s steel

plants. In the current fiscal RMD’s iron mines in Odisha and Jharkhand are set to produce about 24.50 million tonnes of iron ore. Source: Business Standard


OIL & ENERGY

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CNPC to sign oil exploration, refining pact with UAE’s ADNOC this month – sources

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hina National Petroleum Corp (CNPC) is expected to sign a preliminary agreement with Abu Dhabi National Oil Co (ADNOC) later this month to invest in oil and gas exploration and refinery projects, four sources with knowledge of the matter said. The agreement will be signed during a high-level Chinese state visit to the United Arab Emirates during which CNPC Chairman Wang Yilin will be on the business delegation. “It will be a preliminary and broad cooperation deal that covers upstream and downstream

investment,” said one of the sources, a Beijingbased oil executive briefed on Wang’s planned trip. CNPC International, the state major’s overseas investment arm for oil and gas exploration and production, is taking the lead in talks with ADNOC, the executive added. A CNPC spokesman declined to comment on the deal. An ADNOC spokesman said the company has received “significant interest” from the market as well as from existing and new partners since it announced its plan to expand its strategic partnership model, but declined to comment on the specific deal.

China will host a high level China-Arab summit next Tuesday where President Xi Jinping will deliver the keynote speech. “We see a trend of some Gulf countries such as Abu Dhabi, Qatar and Saudi Arabia moving to diversify away from their oil and gas reliant economy, by divesting some of those assets to free up capital for other sectors,” said a second source, a CNPC official. ADNOC announced in April its first ever competitive exploration and production licensing round of six oil and gas blocks, with bids due by October. CNPC is set to join the

bidding, said a separate CNPC source with knowledge of the matter. ADNOC plans to double its refining capacity and triple petrochemicals output potential by 2025, as the state energy firm focuses more on downstream expansion to capture new growth markets. CNPC, which runs its Middle East operation out of Dubai, last March won 10 percent stakes in two ADNOC offshore oilfield concessions under a 40year deal that cost $1.2

billion. That followed an 8 percent interest CNPC won in 2017 for $1.8 billion in Abu Dhabi’s giant onshore oilfield concession. CNPC already operates refineries in Japan, Singapore, Sudan, Scotland and France, and is recently negotiating with Brazil for a partnership that could give China its first refining capacity in the Americas. Source: Reuters

Oil mixed as investors short-cover and Saudi boosts output

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il was mixed on Friday, with short-covering pushing up U.S. crude futures while Brent slipped on global trade tensions and increased Saudi production. West Texas Intermediate crude futures CLc1 gained 61 cents to $73.55 by 11:30 a.m. (1530 GMT). Global benchmark Brent LCOc1 was down 39 cents at $77 a barrel. For the week, WTI was on track for a loss of about 0.4 percent while Brent was down about 3 percent. “We have a little bit of a rally that’s materialized” for WTI, said Bob Yawger of director of energy

futures at Mizuho in New York. The rally appears to be a “short covering situation – we were down almost 2 percent yesterday,” said Yawger. U.S. crude futures slipped on Thursday after data showed an unexpected 1.3 millionbarrel build in crude inventories. Brent, meanwhile, was “still having difficulty gaining independent bullish traction,” said Jim Ritterbusch, president of Ritterbusch and Associates in a note. “Increased Saudi crude

availability that is being enhanced by reduced OSPs (official selling prices) into Europe and other regions is providing a strong counter against curtailed Libyan export activities,” Ritterbusch wrote. In addition to reducing the price of its August barrels, Saudi Arabia also told the Organization of the Petroleum Exporting Countries (OPEC) that it increased production by almost 500,000 barrels per day last month. Output cuts by OPEC and allies since January 2017 have reduced a crude glut. Involuntary drops in supply in Venezuela, Angola and Libya have made the cutbacks even bigger, although OPEC –

led by Saudi Arabia – has since agreed to a modest increase in output. “The more that Saudi Arabia adds to the market, the less of a supply cushion we have – that’s a bullish twist to a bearish development,” said Yawger at Mizuho. An imminent shift in global oil trade flows was also affecting prices. U.S. tariffs on $34 billion in Chinese imports took effect as a deadline passed on Friday and Beijing has vowed to respond in kind. China has indicated that it could place a tariff of 25 percent on U.S. oil. If that happens, “Chinese demand would then shift to other suppliers. Because the oil market is already in tight supply

due to the numerous outages, this would drive international prices (Brent) further up,” Commerzbank said in a note. Renewed U.S. sanctions on Iranian oil appear set to tighten supplies further. South Korea, a major buyer of Iranian oil, will not lift any Iranian crude and condensate in July for the first time since August 2012, three sources familiar with the matter said. Meanwhile, the market continued to watch rising U.S. crude output, with this week’s oil drilling rig count data, an indicator of future production, due at 1 p.m. Source: Reuters


FREIGHT

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Air freight continues to grow modestly in May

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he International Air Transport Association (IATA) has released data for global air freight markets showing that demand, measured in freight tonne kilometres (FTKs), rose 4.2 per cent in May 2018, compared to the same period the year before. This was slightly down from the 5.2 per cent (revised from 4.1 per cent) growth in annual demand recorded in April 2018, said a release. Freight capacity, measured in available freight tonne kilometres (AFTKs), grew by 6.2 per cent year-on-year in

May 2018. This was the fourth month in a row that capacity growth outstripped demand growth. After a weak start to 2018, demand for global air freight has now resumed a modest trend upwards. However, the rapid growth seen in 2017 is now over, with demand growing at a significantly slower pace   in 2018. In IATA’s mid-

year industry outlook, 2018 freight growth was revised downwards to 4 per cent (from the previously forecasted 4.5 per cent in December 2017). There are three indications that growth will continue at a slower pace:   • The re-stocking cycle which required quick delivery to meet customer needs is over

• The new export orders component of the global manufacturing Purchasing Managers’ Index (PMI) is at a 21-month low • Global trade appears to be softening as trade tensions increase "We expect air cargo demand to grow by a modest 4 per cent in 2018. That’s an uptick from a very weak start to the year. But headwinds are strengthening with

growing friction among governments on trade. We still expect demand to grow, but those expectations are dampened with each new tariff introduced. Experience tells us that trade wars, in the long run, only produce losers," said Mr Alexandre de Juniac, IATA’s DirectorGeneral and CEO.

Trump Trade Spat May See Top Soy Exporter Brazil Turn to Imports

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he U.S.-China trade spat is turning the global soybean market into a merry-go-round that may see top exporter Brazil turn to imports. With Brazilian prices benefiting from the feud, the South American nation could take advantage by maximizing sales to top importer China. But to do that, it’ll have to turn to neighbor Argentina to buy soybean meal, a key ingredient needed to feed its poultry industry, according to JPMorgan Chase & Co. Brazil could even consider importing

soybeans at a cheaper price than it exports them, said Andre Pessoa, head of Agroconsult in Sao Paulo. The trade tension that’s roiled crop markets in the past month will escalate if President Donald Trump slaps tariffs on $34 billion of Chinese goods as planned Friday, with China promising equal retaliation. The U.S. is the second-biggest soybean supplier to China and shipments could

more than halve if duties elsewhere, either for are enacted. That would domestic crushing or rebenefit Brazil, already the export, Pessoa said. top supplier to China. Brazil could step up “We will need to imports from Paraguay see soybean meal from next season, said Ana Argentina pushed into Luiza Lodi, an analyst Brazil” to meet feed at broker INTL FCStone demand, said Tracey Inc. in Campinas, Brazil. Allen, a London-based U.S. imports are less analyst at JPMorgan. likely because of high “That’s realistically freight costs, she said. An the only way to enable 8 percent import tax on maximum soybean export U.S. soybeans also makes flow from Brazil to move the transactions costlier. into China, and to supply the domestic demand.” “It will be too expensive to move U.S. beans As U.S. soybean into Brazilian crushing prices slid, the premium facilities upcountry, Brazilian beans command because of the location over futures in Chicago of the crushing facilities, has already doubled. To which tend to be close take advantage of that, to farming areas in Mato Brazil may seek to import Grosso and other states cheaper supplies from where you originate the

beans,” JPMorgan’s Allen said. “You will see certain volumes of U.S. soybeans moving into Brazil, but I don’t think it will be the dominant trade flow.” To meet Brazil’s demand for soybean meal, drought-hit Argentina may need to bring in soybeans from the U.S., and there are already signs of that happening. Argentina has committed to buying 540,000 metric tons from the U.S. in the 2018-19 season that starts in September, adding to purchases of 89,000 tons this season, U.S. Department of Agriculture data show.


WORLD ECONOMY

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Trade tension hurts U.S. consumers, say firms

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ompanies from China and the United States are concerned about the impact of trade tensions between the world’s top two economies after the United States began imposing a 25-percent additional tariff on Chinese products worth 34 billion U.S. dollars Friday. China’s customs authority announced that additional tariffs for some imports from the United States worth the same amount, including agricultural products, vehicles and aquatic products, also took effect on the same day. C h i n e s e manufacturers and U.S. businesses operating in China have expressed concerns that the United States launching of the largest trade war in economic history could impact the global trade order and inflict losses to U.S. consumers as well as industry and commerce firms on both sides. “We are deeply concerned over the escalated trade tensions between the United States and China,” said Bruce Blakeman, vice president of corporate affairs in Asia Pacific at U.S. agribusiness company Cargill. The transnational company has many branches and plants across China. There are no winners in a trade war and tariff measures will not solve the concerns of the U.S. government, according to companies. Harley Seyedin, president of the

American Chamber of Commerce in South China said that the American Chamber of Commerce in South China and the U.S. Chamber in Washington continue to believe that the move puts all the burden on American and Chinese companies and consumers. “If the status-quo is prolonged, it will have a long lasting negative impact on free and fair trade between our nations as companies affected will begin to look for alternative sources to fulfill their product needs.” Sources of two international leading container shipping companies told Xinhua they estimated the ripple effect of the ChinaU.S. trade dispute to emerge in the second half of the year. The company will cancel the business of two cargo ships next month, said an executive of one of the shipping firms, who is in charge of

business in south China. “Imposing additional tariffs will increase the costs of Chinese companies in exports to the U.S. and thus make them face greater competition pressure,” said Xiao Feng, deputy general manager of Shenzhenbased OneTouch Business Service Ltd., a subsidiary of e-commerce giant Alibaba Group.

Industrial Co. Ltd, another company in the province, is affected by the U.S. list of Chinese products for additional tariffs. The company’s two major U.S. clients hold a wait-and-see attitude. “One client believes the prices will inevitably hiked, which will lead to the fall of consumption demand, while the other also considers cutting the types of products on the market,” according to Wu Tianwen, chairman of the company.

“But on the other hand, it is difficult for U.S. distributors to find substitutes as Chinese products have reasonable prices and good quality. In the end, either the demand will be cut or “It is nothing good. the prices will be lifted None of Chinese and in the U.S. market.” American companies or consumers will benefit “The two choices will [from the dispute].” either impact the supply China’s Ministry chain or let consumers of Commerce warned take the consequences. the U.S.-initiated trade Both are terrible results.” war will hamper global economic recovery “The U.S. clients and trigger global have already told us they market turmoil while would adjust the prices,” dealing a blow to said an executive of an many multinationals, equipment manufacturing enterprises and firm with exports to the ordinary consumers. U.S. in Guangdong. Recent U.S. Dongguan Excel protectionist measures

have also triggered opposition and counter measures from a number of countries. China lodged an additional complaint with the World Trade Organization Friday over tariffs formally implemented by the United States based on a trade investigation against China under Section 301. Imposing additional tariffs will not stop the upgrade of China’s manufacturing industry, say Chinese entrepreneurs. Luo Rihui, executive director of an automation firm in Guangdong, said: “The trade dispute prompts domestic companies to speed up efforts to look for local suppliers of core parts and further enhance their strength to tap the market. “Now, many companies seek cooperation with us. We believe we will see faster development ” SOURCE:

XINHUA


STOCK

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Investors Skeptical About Stock Rally as Trade-War Era Begins

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tocks may be up today, but analysts and investors are skeptical that the rally will last as the U.S.-China trade war begins. While the MSCI All-Country World Index climbed and Asia’s benchmark rebounded from a nine-month low, market watchers are seeing more volatility in the cards. With U.S. tariffs on $34 billion of Chinese goods now in effect and China retaliating, expect a long process of backand-forth between the two countries with no clear endgame as of yet, they say. “These tensions are like an ongoing chronic back pain,” Tai Hui, chief market strategist at JPMorgan Asset Management in Hong Kong, wrote in a note on Friday. “Investors may not notice for a while, but they can come back and haunt us.” He recommends going for shares of companies less exposed to global trade and that will benefit from rising local consumer demand. Asian shares have suffered the most in anticipation of the tariffs, with markets from Shanghai to Tokyo — and even Ho Chi Minh City —

tumbling this week. Nine out of the world’s 10 worst-performing stock indexes in the four days through Thursday were from the region. While the MSCI Asia Pacific Index rose 0.6 percent on Friday, it’s still down for a fourth week, its longest streak in more than a year. In the U.S., the S&P 500 Index is up after two weekly slides, and the Stoxx Europe 600 Index has rebounded from an almost three-month low on Monday. “It’s a shortterm rally after bad news was digested and portfolio derisking trades were executed,” said Alan Richardson, investment manager at Samsung Asset Management in Hong Kong. “The rally is unlikely to sustain because growth has peaked and we are unlikely to see new highs this year.”

The main question is how the U.S. will retaliate to China’s response. President Donald Trump suggested duties could reach $550 billion of imports, a figure that exceeds all of U.S. goods imports from China in 2017. Commerzbank analysts including Alexander Kraemer see a complete backing down by Trump as “close to impossible” ahead of mid-term elections in November. “The trade frictionrelated rhetoric could continue for longer, continuing to put pressure on the region’s valuations in the near term,” said Manishi Raychaudhuri, BNP Paribas’s head of equity research in the AsiaPacific region. “However, markets are cheap relative to their historical ranges, and may not decline much from the present levels.” Like JPMorgan Asset Management’s Hui, Raychaudhuri favors stocks linked to

domestic economies, particularly those in the consumerdiscretionary and financial sectors. He also likes energy and commodity companies, especially oil exporters, according to emailed comments. Aviva Investors Global Services responded to the threat of protectionism by cutting its overweight on emerging-market equities to neutral and taking an overweight stance on U.S. shares and the dollar. “While we must not dismiss the risk of rising tension over trade — President Trump’s ‘America First’ policy could be a disruptive factor for the next two years,” Michael Grady, senior economist and strategist at the fund manager, wrote in a note. “We view these developments as volatility events that can be weathered as

long as they do not derail the global recovery.” And volatility is exactly what Ardea Investment M a n a g e m e n t ’s Tamar Hamlyn plans to take advantage of. The Sydneybased money manager said his firm is buying interest-rate options and credit-default swaps to take advantage of rising market swings. “ T a r i f f s ultimately impair international trade, and thus can act as a brake on global capital flows,” he said. “Without the stabilizing influence of global capital flows, we can expect volatility in financial markets to increase, and funding costs to rise as well, especially in the short end.” S o u r c e : Bloomberg

PortWays-July Month Second Week Issue 12-07-2018  

Portways India is a Maritime Tabloid English Weekly Newspaper, with the prime focus on both National and Global. Visit http://www.portways.i...

PortWays-July Month Second Week Issue 12-07-2018  

Portways India is a Maritime Tabloid English Weekly Newspaper, with the prime focus on both National and Global. Visit http://www.portways.i...

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