China Shipping Container Lines Raises Rates
July 7, 2009
China Shipping Container Lines Co. said it’s hard to predict if rates will keep rising because fees reflect demand.
By staff reporter Zhou Lingling
(Caijing.com.cn) Signs of a recovery in demand have prompted some global shipping firms, including China Shipping Container Lines Co. (SSE: 601866; HKSE: 02866), to raise rates on selected routes effective July 1.
CSCL’s investor relations office told Caijing that the carrier raised rates on China-Europe and China-Mediterranean routes by US$175 per twenty-foot equivalent unit to about US$400, with a further US$50 hike from July 15 in the pipeline. CSCL also raised rates on routes to Australia, Africa and the west coast of South America, the official said.
Meanwhile, container lines participating in the North Asia/New Zealand Discussion Agreement – an alliance formed as ‘a voluntary discussion forum’ – said rates on services linking China and South Korea with New Zealand will rise US$250 per TEU from July 15.
The Canada Westbound Transpacific Stabilization Agreement also said its members raised rates for dry containers by US$160 per TEU, effective July 1.
Neither organization disclosed the new rates.
Several container shipping lines had to abandon planned rate hikes in April amid a sluggish market.
According to the Shanghai Shipping Exchange, China’s export container shipping index closed at 769.05 points on July 3, up 0.8 percent week-on-week, ending several weeks of declines.
The exchange said in a report that traffic on routes to Europe grew significantly in the run-up to the traditional July-August peak season as domestic manufacturers accelerated production and shipments. But the exchange also said that current rates don’t cover shipping firms’ operating costs on services to Europe.
Li Pan, an analyst at Bank of China International, said in a recent report that shipping firms are expected to raise rates to offset rising costs during the peak season and into the third quarter.
With oil prices inching higher, shipping lines’ fuel surcharges are also rising.
An official from CSCL said the company will raise fuel surcharges on services to Europe and the Mediterranean by US$75 per TEU this month. The Asia-West Coast South America Freight Conference also said it will raise its bunker surcharge to US$522 from US$450, beginning July 15.
CSCL said it’s hard to predict if rates will keep rising because fees reflect demand. The global downturn has driven down container shipping traffic and rates.
CSCL’s net profit fell 96 percent last year to 131 million yuan, and it reported a net loss of 1.2 billion yuan in the first quarter of this year.
In Hong Kong on July 7, China Shipping Container was up 0.49 percent at HK$2.05, while in Shanghai its A shares were up 1.11 percent at 4.54 yuan.
China Shipping Container Lines Co. said it’s hard to predict if rates will keep rising because fees reflect demand.
By staff reporter Zhou Lingling
(Caijing.com.cn) Signs of a recovery in demand have prompted some global shipping firms, including China Shipping Container Lines Co. (SSE: 601866; HKSE: 02866), to raise rates on selected routes effective July 1.
CSCL’s investor relations office told Caijing that the carrier raised rates on China-Europe and China-Mediterranean routes by US$175 per twenty-foot equivalent unit to about US$400, with a further US$50 hike from July 15 in the pipeline. CSCL also raised rates on routes to Australia, Africa and the west coast of South America, the official said.
Meanwhile, container lines participating in the North Asia/New Zealand Discussion Agreement – an alliance formed as ‘a voluntary discussion forum’ – said rates on services linking China and South Korea with New Zealand will rise US$250 per TEU from July 15.
The Canada Westbound Transpacific Stabilization Agreement also said its members raised rates for dry containers by US$160 per TEU, effective July 1.
Neither organization disclosed the new rates.
Several container shipping lines had to abandon planned rate hikes in April amid a sluggish market.
According to the Shanghai Shipping Exchange, China’s export container shipping index closed at 769.05 points on July 3, up 0.8 percent week-on-week, ending several weeks of declines.
The exchange said in a report that traffic on routes to Europe grew significantly in the run-up to the traditional July-August peak season as domestic manufacturers accelerated production and shipments. But the exchange also said that current rates don’t cover shipping firms’ operating costs on services to Europe.
Li Pan, an analyst at Bank of China International, said in a recent report that shipping firms are expected to raise rates to offset rising costs during the peak season and into the third quarter.
With oil prices inching higher, shipping lines’ fuel surcharges are also rising.
An official from CSCL said the company will raise fuel surcharges on services to Europe and the Mediterranean by US$75 per TEU this month. The Asia-West Coast South America Freight Conference also said it will raise its bunker surcharge to US$522 from US$450, beginning July 15.
CSCL said it’s hard to predict if rates will keep rising because fees reflect demand. The global downturn has driven down container shipping traffic and rates.
CSCL’s net profit fell 96 percent last year to 131 million yuan, and it reported a net loss of 1.2 billion yuan in the first quarter of this year.
In Hong Kong on July 7, China Shipping Container was up 0.49 percent at HK$2.05, while in Shanghai its A shares were up 1.11 percent at 4.54 yuan.
Tags: production, cost, USRelated Posts:
Manufacturing maintains growth arc
July 2, 2009
CHINESE manufacturing continued its growth momentum for the fourth straight month in June, reinforcing optimism that an economic recovery may be under way, two surveys showed yesterday.
The official Purchasing Managers Index, compiled by the China Federation of Logistics and Purchasing as a measure of the nation’s manufacturing activities, reached 53.2 last month following a reading of 53.1 in May and 53.5 in April.
The figure has been above 50 – the threshold denoting expansion – for four consecutive months.
In addition, the brokerage firm CLSA said yesterday its China PMI rose to 51.8 in June from 51.2 in May, the highest level since July last year and the third straight month for the index to record growth.
“After softening slightly in May, China’s official PMI improved again last month and showed sequential economic expansion. We take it as a signal that the green shoots of economic recovery have strengthened and are likely to blossom in the second half of 2009,” said Wang Qing, a Morgan Stanley economist.
“Continuity of accommodative monetary and financial conditions and follow-through in the implementation of the fiscal stimulus package should bring about robust growth in GDP in the second half of this year,” Wang said. “In addition, private investment will likely catch up, as the recovery in property sales remains strong and industrial profits recently registered significant improvement.”
Eric Fishwick, head of Economic Research at CLSA, said the PMI increases confirmed that growth was solidifying in manufacturing.
“Further improvement in export orders is a surprise, and domestic demand for manufacturing should continue to grow, as policy and the upturn in residential construction are gaining traction,” Fishwick said.
Both Wang and Fishwick expect the PMI to continue expanding in the coming months.
The production index under the official PMI strengthened to 57.1 in June from 56.9 in May, supported mainly by domestic demand, with new orders standing at 55.5 last month.
Economists said the decline in China’s exports should bottom out soon as new export orders reflected in the PMI rose to 51.4 in June, from 50.1 in May when they first entered expansionary territory.
The employment figure climbed back above 50 for the first time since last September, hitting 50.1 in June from 49.9 a month earlier, implying the country’s job-protection and creation policy is working.
China’s gross domestic product grew 6.1 percent in the first quarter from a year earlier, the weakest pace since at least 1992. Economists generally expect better performance when second-quarter results are posted later this month.
The main concern is weak external demand. China’s exports fell 26.4 percent in May from a year earlier, a record low in at least 14 years.
CHINESE manufacturing continued its growth momentum for the fourth straight month in June, reinforcing optimism that an economic recovery may be under way, two surveys showed yesterday.
The official Purchasing Managers Index, compiled by the China Federation of Logistics and Purchasing as a measure of the nation’s manufacturing activities, reached 53.2 last month following a reading of 53.1 in May and 53.5 in April.
The figure has been above 50 – the threshold denoting expansion – for four consecutive months.
In addition, the brokerage firm CLSA said yesterday its China PMI rose to 51.8 in June from 51.2 in May, the highest level since July last year and the third straight month for the index to record growth.
“After softening slightly in May, China’s official PMI improved again last month and showed sequential economic expansion. We take it as a signal that the green shoots of economic recovery have strengthened and are likely to blossom in the second half of 2009,” said Wang Qing, a Morgan Stanley economist.
“Continuity of accommodative monetary and financial conditions and follow-through in the implementation of the fiscal stimulus package should bring about robust growth in GDP in the second half of this year,” Wang said. “In addition, private investment will likely catch up, as the recovery in property sales remains strong and industrial profits recently registered significant improvement.”
Eric Fishwick, head of Economic Research at CLSA, said the PMI increases confirmed that growth was solidifying in manufacturing.
“Further improvement in export orders is a surprise, and domestic demand for manufacturing should continue to grow, as policy and the upturn in residential construction are gaining traction,” Fishwick said.
Both Wang and Fishwick expect the PMI to continue expanding in the coming months.
The production index under the official PMI strengthened to 57.1 in June from 56.9 in May, supported mainly by domestic demand, with new orders standing at 55.5 last month.
Economists said the decline in China’s exports should bottom out soon as new export orders reflected in the PMI rose to 51.4 in June, from 50.1 in May when they first entered expansionary territory.
The employment figure climbed back above 50 for the first time since last September, hitting 50.1 in June from 49.9 a month earlier, implying the country’s job-protection and creation policy is working.
China’s gross domestic product grew 6.1 percent in the first quarter from a year earlier, the weakest pace since at least 1992. Economists generally expect better performance when second-quarter results are posted later this month.
The main concern is weak external demand. China’s exports fell 26.4 percent in May from a year earlier, a record low in at least 14 years.
Tags: exports, chinese, turnRelated Posts:
Taxes cut in effort to lift exports
June 23, 2009
CHINA will reduce or eliminate export taxes on nearly 100 categories of goods including some agricultural products and fertilizers starting next month in its latest move to help the country’s flagging trade sector.
The cuts are the first outright tax reductions since December 2008 and follow seven increases in export tax rebates since August.
While the policies give at least some relief to the nation’s struggling exporters, they contribute little to fixing the main problem: restoring external demand, industry analysts said.
The Ministry of Finance said yesterday that 31 types of goods such as wheat, rice and soya beans will be exempted from export taxes starting July 1.
Direct, effective
Large tax reductions will apply to another 60 categories of products, including fertilizer and chemicals. The tax on phosphate fertilizer, for instance, will be cut from 75 percent to 10 percent.
“The move, similar to the previous increases in export tax rebates, is an obvious bid to counter the falling trade,” said Xue Jun, an analyst at Changjiang Securities Co. “A tax cut is more direct and effective than rebates and enhances cash flow.”
A tax cut is immediate, while exporters have to wait to receive a tax rebate.
“The frequency of these moves illustrates that the Chinese government still attaches great importance to exports, though domestic demand is considered key to the country’s economic recovery,” Xue said.
China’s May exports fell 26.4 percent from a year earlier to US$88.8 billion, the worst drop in at least 14 years. Last month, China announced it would raise tax rebates on more than 600 types of exports, including machinery, toys, plastic products and steel. Total rebates amounted to 102.9 billion yuan (US$15.1 billion) in the first quarter, up 18.4 percent from a year earlier.
Vice Commerce Minister Zhong Shan said China will spare no effort to protect the country’s share of the global market.
“China’s trade will suffer a retreat this year and experience slow growth in the coming years,” Zhong said in an article published in the Economic Daily yesterday. “We should go all out to stabilize trade. The focal point should be to avoid losing share in the global market. It is of great importance to keep companies alive and make jobs available, which lays the foundation for the expansion of domestic demand.”
Despite falling volume, Zhong said it may be possible for China to raise its share of global trade.
He said Chinese exports last year accounted for 8.86 percent of the world’s total exports in terms of value, still below the level of export giants Germany and the United States, which each hold around 12 percent of global market share.
At a time when people are slashing spending, China should be able to benefit because the country sells more necessities than luxuries.
CHINA will reduce or eliminate export taxes on nearly 100 categories of goods including some agricultural products and fertilizers starting next month in its latest move to help the country’s flagging trade sector.
The cuts are the first outright tax reductions since December 2008 and follow seven increases in export tax rebates since August.
While the policies give at least some relief to the nation’s struggling exporters, they contribute little to fixing the main problem: restoring external demand, industry analysts said.
The Ministry of Finance said yesterday that 31 types of goods such as wheat, rice and soya beans will be exempted from export taxes starting July 1.
Direct, effective
Large tax reductions will apply to another 60 categories of products, including fertilizer and chemicals. The tax on phosphate fertilizer, for instance, will be cut from 75 percent to 10 percent.
“The move, similar to the previous increases in export tax rebates, is an obvious bid to counter the falling trade,” said Xue Jun, an analyst at Changjiang Securities Co. “A tax cut is more direct and effective than rebates and enhances cash flow.”
A tax cut is immediate, while exporters have to wait to receive a tax rebate.
“The frequency of these moves illustrates that the Chinese government still attaches great importance to exports, though domestic demand is considered key to the country’s economic recovery,” Xue said.
China’s May exports fell 26.4 percent from a year earlier to US$88.8 billion, the worst drop in at least 14 years. Last month, China announced it would raise tax rebates on more than 600 types of exports, including machinery, toys, plastic products and steel. Total rebates amounted to 102.9 billion yuan (US$15.1 billion) in the first quarter, up 18.4 percent from a year earlier.
Vice Commerce Minister Zhong Shan said China will spare no effort to protect the country’s share of the global market.
“China’s trade will suffer a retreat this year and experience slow growth in the coming years,” Zhong said in an article published in the Economic Daily yesterday. “We should go all out to stabilize trade. The focal point should be to avoid losing share in the global market. It is of great importance to keep companies alive and make jobs available, which lays the foundation for the expansion of domestic demand.”
Despite falling volume, Zhong said it may be possible for China to raise its share of global trade.
He said Chinese exports last year accounted for 8.86 percent of the world’s total exports in terms of value, still below the level of export giants Germany and the United States, which each hold around 12 percent of global market share.
At a time when people are slashing spending, China should be able to benefit because the country sells more necessities than luxuries.
Tags: steel, growth, ChinaRelated Posts:
Credit Crunch effects in China
May 6, 2009
The FT story makes the following key points:
– A rapid deterioration in the ability of Chinese companies to pay their suppliers “is significantly increasing the risk of doing business in China.”
– Chinese companies are facing “a liquidity crunch” due to China’s plummeting exports. “Many of them were also unable to access bank loans to tide them over the tough times, especially if they were small to medium-sized private businesses.”
– Though Chinese banks have “ample liquidity,” they usually do not lend to small private companies.
– Many Chinese companies have turned to their suppliers for credit, “thus forcing the pain up the supply chain.”
– Chinese suppliers are extending credit now more than a year ago. This is “bad credit management.” “Now is not the time to extend credit, it is time to restrict it.” “Most Chinese suppliers, however, have never experienced such a downturn.” “A lot of these companies never had to deal with the problem of not getting paid, because sales had always been increasing,” he said, “There’s not enough financial resource, not enough management.”
Tags: business in china, exports, USRelated Posts:
China imports record volume of iron ore in March
April 17, 2009
April 14 (Xinhua) — China’s steel industry overestimated the country’s demand for iron ore and as a result imported a record high amount of the material in March.
A surge of domestic steel output and price increases in the beginning of 2009 raised market expectations. Many domestic steel mills and traders increased orders for iron ore in February and March as they anticipated demand would continue growing, said Liang Shuhe, deputy-director with the Foreign Trade Department of the Ministry of Commerce (MOC), at an industry conference in the port city of Tianjin Monday.
China’s iron ore imports topped 52.08 million tonnes in March, setting a monthly record high. It beat the last record which was just set in February. That’s when the country imported 46.74 million tonnes of iron ore.
In the first quarter, China imported a total of 130 million tonnes of iron ore. In 2008, iron ore imports totaled 440 million tonnes.
“The imports in March mostly came from orders made in February. Iron ore was priced at 80 U.S. dollars a tonne then, but dwindled to 60 U.S. dollars a tonne now. It means huge unrealized losses for steel mills and traders who betted on price hikes,” said Du Wei, an analyst on iron ore with Umetal.com.
Those unrealized losses for the 52.08 million tonnes of iron ore imported in March could be about 1 billion U.S. dollars, Du said.
Liang said iron ore prices were hinged to steel prices.
“Domestic steel prices have dropped and will further dwindle. Thus it’s inevitable for iron ore prices to go down,” Liang said.
Iron ore stockpiled at ports stood at 70 million tonnes in March, nearing a historic high, according to anonymous sources within the China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters.
Due to declining iron ore prices, an increasing number of domestic iron ore mines are closing down, said Zhang Ye, deputy-general-manager of China National Minerals Co., Ltd.. No specific figures were available.
“About 90 percent of China’s iron ore mines are suffering from losses,” Du said. “Steel is a kind of product that could be recycled and thus its scarcity could not be exacerbated in the long term.”
Tags: prices, tianjin, steel pricesRelated Posts:
