COSCO expects Singapore to release seized ship in days
2011-11-09 06:07 (UTC)
SINGAPORE, Nov 9 (Reuters) - China's COSCO Holdings expects its dry bulk carrier, seized in Singapore last week over a payment dispute, to be released in days, a company official said on Wednesday.
The 74,000-tonne bulk carrier, Song Shan Hai, was seized on Friday by the law firm Asia Legal, which is representing an unknown client of COSCO's, according to Singapore's Supreme Court.
'Our company chartered out this vessel to another company. The company did not abide by the contract and did not pay us,' said a Hong Kong-based official with China's top shipping conglomerate. 'We will get it back soon.'
He said the incident was not related to lease disputes with ship owners earlier this year.
bsiong ( Date: 10-Nov-2011 00:26) Posted:
SINGAPORE, Nov 9 (Reuters) - A dry bulk vessel operated by China COSCO Holdings has been seized by authorities in Singapore over a financial dispute with one of its clients, court documents and a shipbroker said on Wednesday.
The 74,000-tonne bulk carrier, Song Shan Hai, was seized on Friday by the law firm Asia Legal, which is representing an unknown client of COSCO's, according to Singapore's Supreme Court.
" There seems to be a dispute over payments between COSCO and one of its clients. Hopefully, this isn't a sign of yet another round of problems for COSCO," said a Singapore-based shipbroker.
COSCO officials were not immediately available for comment.
China's top shipping conglomerate had a vessel seized earlier this year in Singapore after it halted payments to several ship owners to force better terms, a move that threatened to taint its reputation within the international maritime community.
COSCO has resolved most of its lease disputes with ship owners, managing to successfully reduce a " large portion" of its charter costs, its chairman told Reuters last week.
Many of those shipping contracts were struck during the 2008 shipping boom when the industry's largest capesize vessels were being rented by COSCO and others for around $100,000 a day.
The dry bulk market has since plummeted due to the economic downturn and an oversupply of vessels, leaving COSCO paying 2008 prices for ships that now rent for $23,000 a day.
COSCO made a net loss of 2.07 billion yuan ($325.81 million at the time) in the third quarter, hit by sliding freight rates and overcapacity in the industry. Its Hong Kong-listed shares have lost half their value since the start of the year, underperforming a 13 percent drop in the Hang Seng Index . (Reporting by Randy Fabi Editing by Himani Sarkar)
SINGAPORE, Nov 9 (Reuters) - A dry bulk vessel operated by China COSCO Holdings has been seized by authorities in Singapore over a financial dispute with one of its clients, court documents and a shipbroker said on Wednesday.
The 74,000-tonne bulk carrier, Song Shan Hai, was seized on Friday by the law firm Asia Legal, which is representing an unknown client of COSCO's, according to Singapore's Supreme Court.
" There seems to be a dispute over payments between COSCO and one of its clients. Hopefully, this isn't a sign of yet another round of problems for COSCO," said a Singapore-based shipbroker.
COSCO officials were not immediately available for comment.
China's top shipping conglomerate had a vessel seized earlier this year in Singapore after it halted payments to several ship owners to force better terms, a move that threatened to taint its reputation within the international maritime community.
COSCO has resolved most of its lease disputes with ship owners, managing to successfully reduce a " large portion" of its charter costs, its chairman told Reuters last week.
Many of those shipping contracts were struck during the 2008 shipping boom when the industry's largest capesize vessels were being rented by COSCO and others for around $100,000 a day.
The dry bulk market has since plummeted due to the economic downturn and an oversupply of vessels, leaving COSCO paying 2008 prices for ships that now rent for $23,000 a day.
COSCO made a net loss of 2.07 billion yuan ($325.81 million at the time) in the third quarter, hit by sliding freight rates and overcapacity in the industry. Its Hong Kong-listed shares have lost half their value since the start of the year, underperforming a 13 percent drop in the Hang Seng Index . (Reporting by Randy Fabi Editing by Himani Sarkar)
From $0.80 cent to S$8.00.oo, will have to depend on China wanting to surge is development, surge pass just like in the same old day. Just like, it developing it railway and train network system...Everyone know by now.
China's COSCO eyes ventures to build supertankers, then come wtih this statement.
We may buy existing ships depending on the price," its chairman said. Wei Jaifu, chairman of China Ocean Shipping (Group) Co (COSCO Grp), said he expects the global shipping market to recover in 2013.
Note: (50 VLCCs Vessels - There are about 570-580 VLCCs in the mkt today and another 142 on order)
teeth53 thot: By planning ahead for 2013 and beyond, there is as many as others details not to be discounted. Is there something more then meet the eye..?. as world trading is going soft and is slowing down over the next one to two years.
There is nothing wrong for him, wanting to bring his share back to S$ eight dollars again.
China Cosco Holdings Co. Chairman Wei Jiafu said the global shipping market will improve in 2012 as China, the biggest customer for dry-bulk lines, enters the second year of its latest five-year plan.
“There will be signs of spring,” Wei, head of the nation’s biggest shipping group, said today in an interview at a conference in Hainan, China. The country will see “big developments” after completing policy-setting and preparations in the first year of the economic plan, he said.
China, the world’s biggest shipbuilding nation, will also take steps to ensure the “orderly” delivery of new vessels to help support the industry, Transport Minister Li Shenglin said today at the same conference, without elaboration. China Cosco slumped to a loss in the first half as expansion in the global fleet outpaced demand for container and commodity shipments.
The Tianjin-based shipping line won’t order any more new vessels until there is a balance between supply and demand in the global market, Wei said. That is unlikely to happen before 2013, he said.
HONG KONG, Nov 3 (Reuters) - China's COSCO is looking at shipping joint ventures with major oil importers to build new very large crude carriers (VLCC) as part of Beijing's plan to add more supertankers to its fleet by 2015, its chairman said.
Wei Jaifu, chairman of China Ocean Shipping (Group) Co (COSCO Group), said he expects the global shipping market to recover in 2013.
" I forecast that in 2013 we can move into recovery because of the China factor," he told Reuters on Thursday on the sidelines of the World Shipping (China) Summit in Boao, Hainan Island.
There is now a global oversupply of supertankers in operation or ordered and the industry has been hoping China would buy existing vessels rather than build new ones.
China's 12th five year economic plan, ending in 2015, will boost internal consumption and this will lift demand for shipping, Wei said.
Under the plan, China, the world's second largest oil user, is aiming for 50 percent of its seaborne oil imports to enter the country on Chinese vessels, he added.
Wei agreed with market estimates China will need about 80 more very large crude carriers (VLCC) to meet the target.
" We are very seriously participating in the project under the plan," Wei said.
Wei said COSCO had reached agreements with China's major oil importers on long-term contracts and now the company will move on building new ships and is in talks to form shipping joint ventures with them.
China's major oil importers are Sinopec and PetroChina Co Ltd .
State-owned COSCO Group, controls bulk cargo carrier and container ship operator China COSCO Holdings Co Ltd .
It also has a joint venture shipyard with Kawasaki Heavy Industries , NanTong COSCO KHI Ship Engineering Co. Ltd, which made China's first VLCC six years ago, Wei said.
Its Singapore-listed shipbuilding unit, COSCO Corporation Ltd , also has the ability to build 300,000 deadweight tonne oil tankers, he said.
But he did not specify which shipyard will build the VLCCs, an oil tanker that is between 200,000 and 300,000 dwt.
The country's two major stated-owned yards, China State Shipbuilding Corporation (CSSC) and China Shipbuilding Industry Corporation (CSIC), will also participate to build some of the mega tankers, Wei added.
Ship association BIMCO Chief Executive Torben Skaanild said on Wednesday that the oil tanker marker has been oversupplied by around 50 VLCCs. There are about 570-580 VLCCs in the market today and another 142 on order, he told Reuters.
He urged China to buy existing supertankers to meet its rising demand for oil transportation instead of building new ones.
" We may buy existing ships depending on the price," Wei said, adding China's other major shipping group, China Shipping (Group) Company, was also involved in the oil transportation project. (Reporting by Alison Leung Editing by Anthony Barker)
BOAO, China (Reuters) – China COSCO Holdings Co. Ltd., operator of the world's largest bulk cargo fleet and a major global container shipper, said on Thursday that it has been able to slash charter costs after successful renegotiations with ship owners amid a gloomy outlook for the shipping industry.
''The negotiations went well. Most of the ship owners have agreed to reduce charter costs,'' COSCO Chairman Wei Jiafu told Reuters on the sidelines of a global shipping conference in Boao, on the southern Chinese island province of Hainan.
COSCO had managed to reduce ''a large portion'' of charter costs through the negotiations, Wei said, adding that the company had stopped buying ships last year because of an uncertain industry outlook.
COSCO halted payments to several ship owners earlier this year to force better terms, a move that threatened to taint its reputation within the international shipping community. It had sought to reassure investor that talks with ship owners over unpaid bills would be resolved.
Meanwhile, Singapore-listed Chinese shipbuilder COSCO Corporation Ltd , reported a 42 percent drop in third quarter net profit, hurt by higher costs at its yards and lower charter-hire rates for its dry-bulk vessels.
COSCO Corp, 51 percent owned by China's COSCO Shipyard Group, earned S$32.2 million (US$25.2 million) for the three month ended September 2011, down from S$55.1 million a year ago.
The firm said its shipyard operations incurred higher costs as it scaled the ''learning curve'' on offshore marine engineering construction contracts of new product types.
''Our group maintains a cautious outlook for the rest of 2011 due to the uncertain global economy,'' Vice Chairman and President Jiang Li Jun said in a statement.
3Q11 Results Cosco Corp reported 3Q11 revenue and PATMI of S$970 mil (+2% Y-o-Y) and $32 mil (-42% Y-o-Y). PATMI fell sharply mainly due to 1) lower profits from dry bulk shipping 2) lower margins from shipyard ops (expected losses on construction contracts) and 3) higher selling expenses (distribution expense) in a difficult operating environment.
Another Disappointing Quarter-Expected Losses Escalates Cosco 3Q11 results came in below expectations (Actual PATMI: S$32 mil vs. PSR PATMI estimate: S$39 million). The main culprit was higher expected losses on construction contracts of S$47 mil. We understand from management that the bulk of these expected losses originate from its offshore projects where it experienced cost overruns. The expected losses also provides for penalties stemming from a probable late delivery of one of its vessels currently under construction. The company also mentioned that they might have to recognize further losses in subsequent quarters if they experience further cost overruns or negotiate new shipbuilding/offshore projects at a loss, which we think is highly possible given 1) as it embark on the construction of model/class of rigs not built previously (Letourneau jackups, DP3 drillships) and 2) current shipbuilding market remains weak with little signs of improvement (current rates on construction of bulk carriers not profitable). Hellanic Shipping News quoted NDRC saying on Tuesday that 30% of China’s 1,526 shipbuilding enterprises received no new orders in September, forcing some to shut or stop production.Valuation: We downgrade Cosco from Hold to Sell with a revised target price of $0.82 as we lower our FY11e and FY12e EPS to 6cts and 5.8 cts from 7.2 cts and 6.6 cts previously, taking into account possible losses from its marine engineering projects as well as a weak dry bulk market that is expected to persist at least till 2012. Our target price of $0.82 is based on 14x FY12e EPS, in-line with mid-cycle valuations. SELL.
Chinese government has announced an 'Offshore Plant & Equipment Industry Development Strategy (2011-2020)' to support offshore plant-related companies for ten years from now.
According to this plan, China aims to establish a foothold on offshore industry by 2015 and join the ranks of global developed countries up to 2020.
China plans to meet the demand for offshore plant by securing its own designing/building technology and core technology for offshore equipment and developing offshore-plant designing system by 2015, in detail.
Also, it would promote leading offshore plant companies and prepare for autonomous construction of latest-model offshore plant by 2020, with the help of arranging self manufacturing, facility supply and technical service system, etc.
Chinese government seems to have a firm determination on overcoming a depressed shipbuilding industry with offshore plant.
Meanwhile, China would support the industry in four ways - offshore-industrial innovation project, reinforcement of inter-industry coalition by demand creation for offshore plant, recruitment of technically qualified human resources by reinforcing international cooperation and improvement of industrial structure with governmental policies.
Although China has built up a foundation in building or designing FPSO, drillship, semi-submersible drilling rig, etc., it needs to be more competitive in high-value new plant sector.
Meanwhile, China depends over 70% of offshore equipment on overseas market, making only 15% of profit from the equipment in a project. What is worse, in case of newly-developed offshore plant, it only builds hull.
If the Strategy goes well, offshore plant market in China would expand and more companies are forecast to start offshore business.
In the near future, overseas companies seem to be harder in placing Chinese offshore market, as China improves technology and its local content policy, etc.
More Chinese are speaking up for establishment of local content policy in offshore plant to foster domestic equipment makers and prevent overseas companies' monopolization.
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then buy buy buy.
