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Dory 25/7
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Why is China reinforcing its border with North Korea?
Jul 25, 2017 | CNN
By James Griffiths and Serenitie Wang,
China is further fortifying its border with North Korea, new reports show, amid continued tensions on the peninsula and concerns over potential US military action against Pyongyang. -
TWO armed Chinese fighter jets 'nearly cause a collision while buzzing a US Navy spy plane over the East China Sea, with one flying just 300 feet away'
Jul 24, 2017 | The Daily Mail
... The near-collision occurred around 90 miles south of the Chinese port of Qingdao, officials said. That's 250 mile north-west of Shanghai, China's second-most populous city. -
Putting Dalian Port PDA Co Ltd (2880.HK) Under the Microscope: Technicals Watch
Jul 25, 2017 | The Hiram Herald
Needle moving action has been spotted in Dalian Port PDA Co Ltd (2880.HK) as shares are moving today on volatility 0.70% or $0.01 from the open. The HKSE listed company saw a recent bid of $1.44 and 602000 shares have traded hands in the session. -
China Prepares for a Crisis Along North Korea Border
Jul 24, 2017 | The Wall Street Journal
By Jeremy Page
China has been bolstering defenses along its 880-mile frontier with North Korea and realigning forces in surrounding regions to prepare for a potential crisis across their border, including the possibility of a U.S. military strike. -
China’s ‘Belt and Road’ opens up new business in Africa — for both the U.S. and China
Jul 24, 2017 | The Washington Post
By Janet Eom
There has been no shortage of headlines proclaiming China’s growing clout in a “new world order” in recent months. This speculation resurfaced after the July G-20 summit, at which the United States reconfirmed its withdrawal from the Paris climate accord, and the May 2017 summit of the Belt and Road, China’s $1 trillion global plan for infrastructure projects and trade deals connecting Africa, Asia and Europe. -
Carriers call the shots in active charter market
Jul 24, 2017 | Journal of Commerce
By Bruce Barnard
The leading ocean carriers continue to call the shots in the container ship charter market, with rates weakening despite strong demand. -
US Soybean Exports Poised For Rebound
Jul 24, 2017 | Journal of Commerce
By Reynolds Hutchins
US soybean exporters are bullish on a rebound this year thanks to record high demand from their top customers in China and political unrest literally derailing shipments from their top competitors in Brazil.
Port Mentions - There are no relevant clips to report at this time.
City/Province Mentions
Competitor Mentions
US - China Relations
Industry News
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Why is China reinforcing its border with North Korea?
Jul 25, 2017 | CNN
By James Griffiths and Serenitie Wang,
China is further fortifying its border with North Korea, new reports show, amid continued tensions on the peninsula and concerns over potential US military action against Pyongyang.
The North Korean-Chinese border stretches 880 miles (1,415 kilometers) across China's Liaoning province, an industrial and mining heartland prone to heavy smog and painfully cold winters.
In more hospitable months, the border city of Dandong plays host to hundreds of tourists coming to gawp at North Korea -- from boats on the Yalu River which separates the two countries, or through binoculars on a section of the Great Wall overlooking the international boundary.
Below the tourists, trucks carrying Chinese goods rumble into North Korea as a small number of shoppers and traders head in the opposite direction.
Cross-border interaction has remained largely consistent even as relations between North Korea and its one major ally have fluctuated amid increasing nuclear and missile testing by Pyongyang and angry denunciations from Beijing.
But recent reports published on Chinese military and government websites, first highlighted by the Wall Street Journal, show Beijing is moving to reinforce the border as tensions on the Korean Peninsula rise and some in the US call for regime change in Pyongyang.
High security
Despite the strong ties between China and North Korea on paper -- the two countries' alliance is said to have been "forged in blood" during the Korean War -- the border region is among China's most militarized, and Beijing has held live-fire and helicopter attack drills in the area in recent months.
According to a report published last month on the official website of the People's Liberation Army (PLA), a "newly formed border defense brigade" is conducting patrols to gather intelligence, assess the situation and more accurately map out the border.
Another report said the "whole area" has newly been placed under "24-hour video surveillance" including drones, patrol cars and high-tech cameras.
The border region is a highly strategic one for China, and has seen conflict during World War II and the Korean War, but one of Beijing's chief concerns is not military forces pouring across the border, but refugees.
"A mass movement of North Korean civilians across the border into China is a major concern, particularly given the dense population centers not far from the border, and the economic importance of Northeast China," according to a recent report by the US-based Jamestown Foundation.
While North Korea has proved remarkably capable of shrugging off economic sanctions, the country has suffered major famines and widespread food insecurity in the past, analysts say a conflict on the peninsula would likely result in hundreds of thousands, if not millions, of civilians heading north into China, the specter of which is a "huge worry for Beijing" according to the Council on Foreign Relations.
Just as the Syrian refugee crisis has strained the resources of neighboring countries and caused widespread political strife in Europe, many in China are concerned by the hit the country's economy and security could take from even a small conflict on the Korean Peninsula.
"The stakes are huge," retired US Adm. Mike Mullen said last year. "Instability generated on the peninsula could cascade into China, making China's challenge of providing for its own people that much more difficult."
In March, retired PLA Major General Wang Haiyun said it was "necessary to prepare military action as soon as possible for a potential war" on the peninsula.
"Once war breaks out, we should also consider setting up an international refugee camp in North Korean territory to prevent the influx of North Korean refugees," said Wang in an op-ed in the state-owned Global Times.
Warnings of war
Tensions between Pyongyang and Washington have continued to rise amid recent claims by North Korea that it had tested a nuclear-capable intercontinental ballistic missile (ICBM).
A US defense official told CNN this week North Korea appeared to be preparing for another test.
The Donald Trump administration has sought to bring pressure on China to take action to contain its ally, but despite repeated condemnations by Beijing of North Korea's weapons testing, little progress appears to have been made.
Beijing has also criticized the US and South Korea for their rhetoric on the issue and encouraged all parties to return to the negotiating table.
However, such an invitation from Seoul to Pyongyang to resume talks went unanswered this month.
The situation has led to frustration on all sides, with Trump's CIA director Mike Pompeo last week appearing to indicate support for regime change in Pyongyang.
Tong Zhao, an analyst at the Carnegie Tsinghua Center for Global Policy, said that "given the growing tensions and risks of military conflicts over the peninsula, I am sure China has been enhancing its military contingency plans."
On Monday, a Chinese Ministry of Foreign Affairs spokesman said "military means should not be an option to solve the Korean Peninsula issue." A Defense Ministry spokesman declined to comment Monday on China's war contingency plans.
Earlier this year, the Chinese state-run tabloid Global Times warned "if the North Korean nuclear issue boils over, a war on the peninsula is unavoidable."
"The war will bring more risks than the tough sanctions on Pyongyang could to China," the paper said in an editorial. "If China does not tackle the conundrum now, it will face more difficult choices in the future."
http://edition.cnn.com/2017/07/25/asia/china-north-korea-border/index.html
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Jul 24, 2017 | The Daily Mail
· The Chinese J-10 jets came within 300 feet of the US EP-3 plane at the weekend
· US plane had to change direction as a result of the interference, said officials
· Both of the China jets were armed with air-to-air missiles, authorities said
· The East China Sea is bordered by China's east coast, South Korea and Japan
A US Navy surveillance plane almost collided with two Chinese fighter jets over the weekend after they attempted to buzz the aircraft.
The US EP-3 plane was flying over the East China Sea - which is bordered by China's east coast, South Korea and Japan - when it was intercepted by the Chinese aircraft.
One of the J-10 jets came up from under the spy plane just 300 feet away, forcing it 'to take evasive action to avoid collision,' a US official told Fox News.
The incident was also confirmed to Reuters by two officials.
The near-collision occurred around 90 miles south of the Chinese port of Qingdao, officials said. That's 250 mile north-west of Shanghai, China's second-most populous city.
This is the third time in three months that US aircraft have been buzzed by Chinese planes in the region.
On May 25, American officials blasted 'unsafe and unprofessional' Chinese pilots after they flew just 100 feet from one of the Navy's P-3 Orion surveillance aircraft.
And on May 17, a USA WC-135W Constant Phoenix 'nuke sniffer' plane was approached by two Chinese SU-30 jets - one of which flew upside down over the WC-135W, Top Gun-style.
China declared an air defense identification zone over a large section of the East China Sea in 2013, a move the US called illegitimate and has refused to recognize.
China has demanded foreign aircraft operating within the zone declare their intentions and follow Chinese instructions.
It is unclear whether this weekend's incident took place within the disputed area.
The incident continues the awkward relationship between the US and China during a period of high tension in East Asia.
On Friday Admiral John Richardson called his Chinese counterpart to discuss putting pressure on North Korea to curb its nuclear weapons development.
That comes amid continuing rivalry between US and Chinese ships in the South China Sea, which the Asian country has also laid claim to.
It has built aritifical islands and constructed bases on naturally-occurring islands of disputed ownership in order to cement its claim on the waters.
The US, meanwhile, has continued Obama-era policy of sending ships through the disputed area - including within 12 miles of the islands, in water that would be considered Chinese if the islands were internationally accepted.
China has condemned the exercises, and tailed ships in waters it considers its own.
Earlier this month China sent troops to the African nation of Djibouti, establishing its first international base just four miles from a US base also in the country.
In June the USS Nimitz - the nation's oldest aircraft carrier - was sent to the Pacific to join the US Carl Vinison and the USS Ronald Regan, amid concerns over North Korea.
In July the Nimitz, along with ships from India and Japan, took part in exercises off the Indian coast in what was said to be a show of strength against China.
http://www.dailymail.co.uk/news/article-4725112/Chinese-jets-intercept-U-S-surveillance-plane-U-S-officials.html
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Putting Dalian Port PDA Co Ltd (2880.HK) Under the Microscope: Technicals Watch
Jul 25, 2017 | The Hiram Herald
Needle moving action has been spotted in Dalian Port PDA Co Ltd (2880.HK) as shares are moving today on volatility 0.70% or $0.01 from the open. The HKSE listed company saw a recent bid of $1.44 and 602000 shares have traded hands in the session.
There are some that swear by the technical analysis. Many investors will opt to employ a research strategy that involves pieces of the two approaches. Knowing every little detail about a company may not be overly necessary, but it may help provide a bit more direction when navigating the stock market maze. Investors who put in the time to study all the fundamentals may want to also start watching the charts on stock that they are thinking about adding to the portfolio. Making sure that no stone is left unturned when examining a stock may end up being the difference between a big winner and a big loser.
Now let’s take a look at how the fundamentals are stacking up for Dalian Port PDA Co Ltd (2880.HK). Fundamental analysis takes into consideration market, industry and stock conditions to help determine if the shares are correctly valued. Dalian Port PDA Co Ltd currently has a yearly EPS of 0.04. This number is derived from the total net income divided by shares outstanding. In other words, EPS reveals how profitable a company is on a share owner basis.
Another key indicator that can help investors determine if a stock might be a quality investment is the Return on Equity or ROE. Dalian Port PDA Co Ltd (2880.HK) currently has Return on Equity of 3.16. ROE is a ratio that measures profits generated from the investments received from shareholders.
In other words, the ratio reveals how effective the firm is at turning shareholder investment into company profits. A company with high ROE typically reflects well on management and how well a company is run at a high level. A firm with a lower ROE might encourage potential investors to dig further to see why profits aren’t being generated from shareholder money.
Another ratio we can look at is the Return on Invested Capital or more commonly referred to as ROIC. Dalian Port PDA Co Ltd (2880.HK) has a current ROIC of 2.55. ROIC is calculated by dividing Net Income – Dividends by Total Capital Invested.
Similar to ROE, ROIC measures how effectively company management is using invested capital to generate company income. A high ROIC number typically reflects positively on company management while a low number typically reflects the opposite.
Turning to Return on Assets or ROA, Dalian Port PDA Co Ltd (2880.HK) has a current ROA of 2.00. This is a profitability ratio that measures net income generated from total company assets during a given period. This ratio reveals how quick a company can turn it’s assets into profits. In other words, the ratio provides insight into the profitability of a firm’s assets. The ratio is calculated by dividing total net income by the average total assets.
A higher ROA compared to peers in the same industry, would suggest that company management is able to effectively generate profits from their assets. Similar to the other ratios, a lower number might raise red flags about management’s ability when compared to other companies in a similar sector.
https://hiramherald.com/putting-dalian-port-pda-co-ltd-2880-hk-under-the-microscope-technicals-watch/
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China Prepares for a Crisis Along North Korea Border
Jul 24, 2017 | The Wall Street Journal
By Jeremy Page
BEIJING—China has been bolstering defenses along its 880-mile frontier with North Korea and realigning forces in surrounding regions to prepare for a potential crisis across their border, including the possibility of a U.S. military strike.
A review of official military and government websites and interviews with experts who have studied the preparations show that Beijing has implemented many of the changes in recent months after initiating them last year.
They coincide with repeated warnings by U.S. President Donald Trump that he is weighing military action to halt North Korea’s nuclear weapons program, while exerting pressure on China to do more to rein in Pyongyang.
Recent Chinese measures include establishing a new border defense brigade, 24-hour video surveillance of the mountainous frontier backed by aerial drones, and bunkers to protect against nuclear and chemical blasts, according to the websites.
China’s military has also merged, moved and modernized other units in border regions and released details of recent drills there with special forces, airborne troops and other units that experts say could be sent into North Korea in a crisis. They include a live-fire drill in June by helicopter gunships and one in July by an armored infantry unit recently transferred from eastern China and equipped with new weaponry.
China’s Defense Ministry didn’t respond directly when asked if the recent changes were connected to North Korea, saying only in a written statement that its forces “maintain a normal state of combat readiness and training” on the border. It has denied previous reports of thousands of extra Chinese troops moving into border areas.
A Chinese Foreign Ministry spokesman on Monday said: “Military means shouldn’t be an option to solve the Korean Peninsula issue.”
Chinese authorities have nonetheless been preparing for North Korean contingencies, including economic collapse, nuclear contamination, or military conflict, according to U.S. and Chinese experts who have studied Beijing’s planning.
China’s recent changes in force structure, equipment and training are connected to nationwide military reforms launched last year to overhaul Soviet-modeled command structures and prepare better for combat beyond China’s borders, those experts say.
In the northeast, however, those reforms are geared predominantly toward handling a North Korean crisis, the experts say.
China’s contingency preparations “go well beyond just seizing a buffer zone in the North and border security,” said Mark Cozad, a former senior U.S. defense intelligence official for East Asia, now at the Rand Corp.
“Once you start talking about efforts from outside powers, in particular the United States and South Korea, to stabilize the North, to seize nuclear weapons or WMD, in those cases then I think you’re starting to look at a much more robust Chinese response,” he said. “If you’re going to make me place bets on where I think the U.S. and China would first get into a conflict, it’s not Taiwan, the South China Sea or the East China Sea: I think it’s the Korean Peninsula.”
China, like many foreign governments, still considers a U.S. military strike unlikely, mainly because of the risk of Pyongyang retaliating against South Korea, an American ally whose capital of Seoul lies within easy reach of the North’s artillery.
The Pentagon declined to discuss U.S. planning efforts. American officials didn’t respond to questions about steps taken by China. But top American officials say they are focused on diplomatic and economic pressure, and view military action as a last resort.
Although technically allied to Pyongyang, Beijing wouldn’t necessarily defend its regime, but is determined to prevent a flood of North Koreans from entering northeastern China and to protect the population there, U.S. and Chinese experts say.
Beijing also appears to be enhancing its capability to seize North Korean nuclear sites and occupy a swath of the country’s northern territory if U.S. or South Korean forces start to advance toward the Chinese border, according to those people.
That, they say, would require a much larger Chinese operation than just sealing the border, with special forces and airborne troops likely entering first to secure nuclear sites, followed by armored ground forces with air cover, pushing deep into North Korea.
It could also bring Chinese and U.S. forces face to face on the peninsula for the first time since the war there ended in 1953 with an armistice—an added complication for the Trump administration as it weighs options for dealing with North Korea.
Beijing has rebuffed repeated American requests to discuss contingency planning, American officials say.
China has long worried that economic collapse in North Korea could cause a refugee crisis, bring U.S. forces to its borders, and create a united, democratic and pro-American Korea. But China’s fears of a U.S. military intervention have risen since January as Pyongyang has test-fired several missiles, including one capable of reaching Alaska.
“Time is running out,” said retired Maj. Gen. Wang Haiyun, a former military attaché to Moscow now attached to several Chinese think tanks. “We can’t let the flames of war burn into China.”
He wrote an unusually outspoken article for one of those think tanks in May arguing that China should “draw a red line” for the U.S.: If it attacked North Korea without Chinese approval, Beijing would have to intervene militarily.
China should demand that any U.S. military attack result in no nuclear contamination, no U.S. occupation of areas north of the current “demarcation line” between North and South, and no regime hostile to China established in the North, his article said.
“If war breaks out, China should without hesitation occupy northern parts of North Korea, take control of North Korean nuclear facilities, and demarcate safe areas to stop a wave of refugees and disbanded soldiers entering China’s northeast,” it said.
Maj. Gen. Wang said he didn’t speak for the government. But his article isn’t censored online—as it would likely be if Beijing disapproved—in China and other Chinese scholars and military figures recently voiced similar views.
In recent weeks, some details of China’s preparations have also emerged on the military and government websites.
The new border defense brigade patrolled the entire frontier in June to gather intelligence and has drawn up detailed plans for sealing it in a crisis, according to the military’s official newspaper.
Aerial drones would help identify targets, supplementing the new 24-hour video surveillance and addressing problems with “information access, rapid mobility and command and control,” another report in the newspaper said.
Many other units in the northeast have recently conducted new combat-focused training for the kind of joint military operations that experts say would be needed for an intervention within North Korea.
In one drill, a new “combined arms brigade” simulated battle against a “blue team” with artillery, tanks and helicopters, state television reported in June.
The new Northern Theater Command, which controls forces in the northeast, also now incorporates units in eastern China that experts say could be launched across the Yellow Sea toward North Korea.
Meanwhile, authorities in Jilin province, which borders North Korea, are reinforcing and expanding a network of underground shelters and command posts to withstand air, nuclear or chemical attack, local government notices show.
Such facilities were needed “to respond to the complicated security situation surrounding the province,” Jilin’s civil air defense bureau said in a notice on its website, which also features photos and specifications of U.S. military aircraft.
In May, Jilin’s government unveiled what it called China’s first “combat-ready big data disaster preparedness center” in an underground facility designed to protect critical military and government data from nuclear or chemical attack.
Jilin authorities declined to comment, citing the sensitivity of the subject.
China’s military reforms aren’t complete and the People’s Liberation Army, or PLA, remains ill-prepared for a North Korean operation, some experts say.
“I don’t see the PLA at this time being particularly enthusiastic about being tasked to undertake a potential near-term mission in North Korea,” said Dennis Blasko, a former U.S. military attaché in Beijing.
But China, like the U.S., has been surprised by how fast North Korea’s nuclear weapons program has progressed, say foreign diplomats and experts. Beijing also worries that Pyongyang’s actions are now harming Chinese security interests, since the U.S. deployment in South Korea in April of a missile-defense system that China says can track its own nuclear missiles, diplomats and experts say.
Beijing’s interests “now clearly extend beyond the refugee issue” to encompass nuclear safety and the peninsula’s long-term future, said Oriana Skylar Mastro, an assistant professor at Georgetown University who has studied China’s planning for a North Korean crisis.
“China’s leaders need to make sure that whatever happens with (North Korea), the result supports China’s regional power aspirations and does not help the United States extend or prolong its influence,” Ms. Mastro said.
—Ben Kesling in Washington contributed to this article.
https://www.wsj.com/articles/china-prepares-for-a-crisis-along-north-korea-border-1500928838
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China’s ‘Belt and Road’ opens up new business in Africa — for both the U.S. and China
Jul 24, 2017 | The Washington Post
By Janet Eom
There has been no shortage of headlines proclaiming China’s growing clout in a “new world order” in recent months. This speculation resurfaced after the July G-20 summit, at which the United States reconfirmed its withdrawal from the Paris climate accord, and the May 2017 summit of the Belt and Road, China’s $1 trillion global plan for infrastructure projects and trade deals connecting Africa, Asia and Europe. This project aims to span 68 countries, linking China’s people and markets to regions far beyond its borders.
[Why is China suddenly leading the climate change effort? It’s a business decision.]
The Belt and Road, announced by Chinese President Xi Jinping in 2013, has conjured images of a colonial China pillaging natural resources and enabling dictators across Africa in exchange for U.N. votes. But our research suggests that there are other drivers behind China’s foreign policy.
Our data at the China-Africa Research Initiative — collected from official websites of central banks, ministries of finance and Chinese contractors, and cross-checked through interviews with Chinese and African officials — reveals that China’s economic needs, rather than any set political agenda, drives Beijing’s activities in developing countries.
Chinese engagement is about business, not just politics
The Belt and Road focuses on infrastructure because Chinese construction companies need business. From 2000 to 2015, China Eximbank contributed $63 billion in loans to Africa, largely aimed at road, railroad, airport and harbor construction. In 2000, the gross annual revenue of Chinese construction contractors in Africa was $1 billion; by 2015, this figure was $55 billion.
Critics of the plan tend to view the Belt and Road as merely a trade route for oil and minerals. Indeed, the top 10 Chinese imports from Africa are raw materials. Oil-rich Angola is the top African exporter to China, and 99 percent of its exports to China are petroleum products. African natural resources help power factories across China, and provide the minerals and metals for the manufacturing sector.
But Belt and Road countries may soon inherit these factories. In 2015, manufacturing was 13 percent of Chinese foreign direct investment in Africa. In comparison, just 7 percent of U.S. investment in the region went to manufacturing ventures. Rising wages in China are pushing its firms abroad to regions where labor is cheaper, opening up the Belt and Road countries to a slew of other economic engagements after construction is over.
[China just held its National People’s Congress. Here are three key points.]
In this light, China’s “Marshall Plan” looks more like a stimulus project than a blueprint for geopolitical control. African countries embrace China as a development partner precisely for Beijing’s “noninterference” policy: This foreign economic engagement comes with few demands. In contrast, the United States has urged African governments to acknowledge democracy and human rights — or lose out on U.S. business opportunities.
In fact, on the rare occasions when China does intervene in Africa, usually because its projects are threatened, it acts in concert with the United States. The two countries have coordinated peacekeeping missions in Sudan and South Sudan, for example, as well as anti-piracy efforts off the Horn of Africa and response efforts against Ebola in West Africa.
China and the United States both benefit from a safe and productive Africa — it would be overly simplistic to assume there’s a zero-sum game for hegemonic control of the continent. And there may be room for further synergies.
The United States and China can collaborate in Africa
Although the U.S. government sent a last-minute delegation to the Belt and Road forum in May, it has largely shunned the initiative as incompatible with its own interests. But there may be room for further synergies, particularly in Africa.
Chinese banks and firms have requested the help of their U.S. counterparts to navigate existing norms in Africa, creating new potential opportunities for collaboration. Chinese efforts may look to U.S. firms, and protocols in place at the U.S. EXIM Bank, such as its Environmental and Social Due Diligence Procedures and Guidelines, and emphasis on anti-bribery provisions.
For one, Chinese companies that have come under scrutiny for environmental degradation or mistreatment of local labor have implemented their own corporate social responsibility measures through community engagement and skills training of African workers. China-led development banks, in response to international NGOs’ criticism of their lack of transparency, have committed to being “lean, clean and green” — this has involved drafting sustainability criteria in accordance with those of the World Bank and Asian Development Bank, and inviting NGOs to annual meetings. The U.S. EXIM Bank and U.S. firms, based on their own guidelines, can assist China Eximbank and Chinese firms to set up stronger safeguards.
Second, health and social services are top sectors for U.S. loans to Africa. Although these areas have not been Chinese priorities, this is changing. Chinese medical personnel have trained African doctors at hospitals built by Chinese companies. Chinese factories have implemented technical training programs for local employees, an initial step that can further benefit from Chinese loans to broader social service efforts in education. American initiatives, from the U.S. President’s Emergency Plan for AIDS Relief (PEPFAR) to partnerships with African universities, can encourage and work with these Chinese efforts.
A major impediment, of course, is that China is not bound by political, social and environmental standards of the Organization for Economic Cooperation and Development (OECD), a 35-member group that includes many advanced economies, as well as emerging countries such as Chile, Mexico and Turkey. To remedy this issue, the United States can push for China to become a full member, building upon initial progress in signing cooperation agreements. Naysayers may be reluctant to allow China, a non-democracy, to join. But a common language would help bring about practices that promote environmentally sound projects, sustainable supply chains, and labor protections.
The Belt and Road is often framed as China’s plan for an interconnected world — without much input or participation from the United States. But African agendas can mix with those of the United States and China to create novel opportunities for global development. If brokered correctly, relations between the United States and China might grow stronger vis-à-vis African countries.
Janet Eom is a research associate, and the former research manager, at the China-Africa Research Initiative at the Johns Hopkins University School of Advanced International Studies.
https://www.washingtonpost.com/news/monkey-cage/wp/2017/07/24/chinas-belt-and-road-opens-up-new-business-in-africa-for-both-the-u-s-and-china/?utm_term=.87d9c92e22d0
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Carriers call the shots in active charter market
Jul 24, 2017 | Journal of Commerce
By Bruce Barnard
The leading ocean carriers continue to call the shots in the container ship charter market, with rates weakening despite strong demand.
The market remains very active despite the summer vacation period in the northern hemisphere, with a regular flow of new charter enquiries as well as fixture extensions across most vessel sizes, according to Alphaliner.
“Despite this brisk activity and a drop in spot tonnage, charter rates remain generally stable at low levels, with only certain vessel types able to achieve rate gains,” the industry analyst said.
Charter rates are weakening in size segments where the supply of spot tonnage is relatively tight, “demonstrating, once more, the increasing bargaining power of the large shipping lines.”
Although the continued influx of large vessels is indirectly impacting the charter market, ship owners remain hopeful that the tightening availability of spot tonnage will result in more substantial rate hikes provided the current demand maintains its momentum.
But any pick-up over the next two months likely will be short-lived, Alphaliner says, as demand will recede by the end of September with the onset of the slack season.
Only three 7,500- to 10,000-TEU ships are in a spot position in a market that has seen some deals struck at higher rates, whereas certain vessels have been fixed at continuously lower rates.
Among recent improved fixtures was Zim Integrated Shipping Services’ charter of a 9,954-TEU vessel for between seven to 12 months at $18,500 per day, significantly higher than the $14,500 Maersk agreed to in June for a threeto six-month charter of a sister ship.
Maersk was also involved in another deal with an improving rate, paying $14,500 per day for an 8,586-TEU vessel for two to six months, compared with recent fixtures struck at between $11,500 and $12,500.
The troubled classic Panamax market — 4,000 to 5,299 TEU — faces steadily sliding rates with demand for tonnage insufficient to offset vessel redeliveries, with an overhang of tonnage on the rise again, Alphaliner reports.
There are currently 35 vessels seeking work — of which 22 are laid up — compared with 31 two weeks ago.
The average charter rate for classic Panamaxes is currently around $7,000 to $7,500 per day while a “maxiPanamax” — secured almost $10,000 in the Atlantic market.
The idle container ship fleet has fallen marginally to 515,480 TEU, or 2.5 percent of global capacity, as of July 10 from 536,108 TEU two weeks earlier, as the 1,000- to 3,000-TEU sector saw a slight increase in demand.
Idle vessel numbers in other size sectors remain relatively flat, without noticeable changes over the past two months. Non-operating owners account for 165 of the 190 idled container ships on July 10.
http://www.joc.com/maritime-news/ships-shipbuilding/carriers-call-shots-active-charter-market_20170724.html
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US Soybean Exports Poised For Rebound
Jul 24, 2017 | Journal of Commerce
By Reynolds Hutchins
US soybean exporters are bullish on a rebound this year thanks to record high demand from their top customers in China and political unrest literally derailing shipments from their top competitors in Brazil.
Soybean industry groups have raised concerns, though, that an ongoing and unrelated trade dispute with China over steel could roil positive forecasts if the Chinese retaliate against the United States and one of its leading, but nevertheless vulnerable, export commodities. For the time being, US soybean exports have been “going strong,” according to Bruce Abbe, executive director of the Midwest Shippers Association. “Much of this is due to lower prices compared to three years back. And those lower prices have been what’s helped us compete with the South Americans.”
Over the past three years, US soybean exporters have faced stiff competition from their counterparts in South America, particularly in Brazil, to feed growing Chinese demand. Bumper harvests and lower Brazilian prices, resulted in a 13.6 percent year-over-year decline in US containerized soybean exports in 2015 and a 2 percent decline in 2016, according to data from PIERS, a sister product of JOC.com.
The United States has started to recover lost ground, said Abbe, whose group represents exporters in the Dakotas, Minnesota, Wisconsin, and Iowa. In the first quarter of 2017, US containerized soybean exports out of the top 10 US soybean exporting ports were up 15.8 percent year over year.
The Chinese are the top buyers of soybeans and accounted for 62 percent of US soybean exports last year alone, according to the American Soybean Association. China’s state-owned grain trading company has said China’s increasing demand for soybeans is driven by the country’s thriving middle class and its surging demand for Chinese livestock which, is fed with US-produced soybean meal.
A testament to this demand: on July 13 a Chinese trade delegation of 12 companies signed a record $5 billion deal with soybean exporters for 460 million bushels of US soybeans. The deal is a $1 billion bump over similar contracts signed one year prior.
The deal does not provide the most insight on the future of the market. According to Abbe, it was only a “special signing ceremony in Des Moines, Iowa,” and final prices and shipment dates were not specified. Nevertheless, it is still a good indicator of the market’s health, said Mike Steenhoek, executive director Soybean Transportation Coalition, told JOC.com. “I think it’s really helpful. These events focus the attention on the size and scale of Chinese imports of US soybeans. It’s not just a number they just pull out of the air. It’s not chiseled in stone. It’s based on intention, it’s based on demand, it’s based on experience,” he said.
That experience has taught those in the industry that the the Chinese do not have to rely on the United States to feed this demand. Brazil often produces similar bumper harvests, and can sell those at lower prices. This year, however, Brazilian exporters have been thrown into disarray due to political turmoil
As much as 30 percent of Brazil’s soybean shipments have been stalled on major roadways connecting farms to ports since July 5 when residents, merchants, and farmers in Brazil’s northern Para state began protesting on a federal road there. The groups have been rallying against President Michel Temer, who earlier this year vetoed legislation that would reduce the protections for a national forest in the region.
The turmoil, which promises to continue for some time, has put additional strains on the country’s already weak transportation infrastructure, Steenhoek said.
“It really is the secret to our competitive advantage. We have a more developed transportation system,” he said. “What that really impedes is their ability to invest in their transportation infrastructure.”
Even when the major federal roads are clear of protestors, they are still not reliable, he said. According to Steenhoek major portions of highways are still not fully paved and after heavy rainfall can flood and produce significant congestion blocking access to Amazon River tributaries and the country’s marine gateways.
The growing Chinese demand and the chaos in Brazil is a boon to the US soybean industry, which is on track to sow 89.5 million acres of soybeans this year, up 7.2 percent from a record 83.4 million acres in 2016, according to the US Department of Agriculture. On average, 45 percent of the soybean crop has been exported over the past decade, and the USDA estimates that will rise above 50 percent over the course of the next year.
“China has remained a strong market for soybeans for the US and the world. Far and away the world’s largest soybean consumer,” said Abbe, adding, however, “on the international trade picture, there are some worrisome concerns with our biggest customer China that even our soybeans could get caught up in a trade dispute.”
The same day the $5 billion Chinese trade deal was announced, US President Donald Trump said he was considering using quotas and tariffs to deal with the "big problem" of steel dumping from China.
“If the US does something on steel imports, there are concerns within the US agriculture community that China could respond against soybeans or other key feed and food commodities they import and try to leverage sourcing from South America,” said Abbe.
Soybean is not the only agriculture export that could be a target, the Chinese have already imposed tariffs on distillers dried grains ( arguing US DDG imports, subsidized by the US government, were being dumped in China and sold at unreasonably low prices.
“The Chinese know where our pressure points are. There’s really no mystery behind it,” said Steenhoek. “We’re not the only supplier. We’re the No. 1 supplier, but we’re not the only suppliers. Even if there’s a 5 percent retraction, it doesn’t have to be a wholesale cancel of sales, that can really have an impact.”
http://www.joc.com/international-logistics/logistics-providers/us-soybean-exports-poised-rebound_20170724.html
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