The loss of lives due to a dam collapse in Brazil is by far its greatest cost, but the incident's economic costs are also in focus as it reshapes one of the biggest trades in the maritime industry. The death toll reached 65 this week with another 300 still missing after mud and water swept through the small town in the state of Minas Gerais. Iron-ore producer Vale SA VALE owned the dam, which was used for debris from a nearby mine. Executives at the mining giant now face criminal charges for the collapse, which comes four years after another dam collapse the company was involved in.
The mine itself accounted for about 7 percent of Vale's total iron ore output of some 400 million tons this year. All of that output is cargo for the largest of the dry bulk ships on the water, called capesizes, with about 1,400 such vessels in the world fleet. The iron ore trade reached 1.47 billion tons last year, according to Stifel, accounting for 28 percent of the freight volume for shipping. The cutback in production due to the Minas Gerais mine closure may only amount to 1 percent of world dry bulk shipping trade, Stifel analyst Benjamin Nolan estimates. But the cutback in long-haul voyages, particularly to Brazil's largest ore customer China, portends lower vessel utilization across the world fleet.
He estimates the world capesize fleet could grow about 6 percent this year, but overall utilization might only grow 2 percent due to the mines closure and increased scrutiny of other Vale operations. "If the impact of lost Brazilian iron ore exports is substantial, ship supply would be likely to exceed ship demand and 2019 could be another challenging year for dry bulk shipping companies," Nolan said.
OOIL sees good 2018
Hong Kong's Orient Overseas (International) Limited, a subsidiary of containership giant Cosco Group, reported 2018 results, reflecting the strong demand seen last year for seaborne freight. OOIL reported total volumes growing 6.3 percent last year, compared to a 3.3 percent volume decline during 2017. Overall revenue grew 6.3 percent to $6.7 billion. The trans-Pacific market, which is particularly exposed to tariff-related shipping demand between China and the U.S., saw overall volumes gain 9 percent reaching 1.97 million twenty-foot equivalent units (teu), with revenue on that trade up 18 percent to $2.44 billion dollars.
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U.S. blocking oil trade with Venezuela
Sanctions against state-owned oil producer could curb crude exports to U.S. (BBC)
U.S. ports need $4 billion in spending
Port lobbying firm puts price tag on needed security and upgrades. (Marine Link)
China's Cosco Shipping raises $1.1 billion
Third largest containership operator falls short of goal for funding new ships. (World Maritime News)
Crane falls on containership in Canada
Evergreen Marine ship hit by container crane at Vancouver port. (Safety4 Sea)
Australian port aims for green certification
One of Australia's biggest exports is coal, one of the most polluting sources of energy in the world. Nonetheless, one of the biggest gateways for those exports is looking to increase its green cred through completing an audit of its environmental practices, writes FreightWaves Jim Wilson. The Port of Newcastle shipped out 90 million tons of coal from January through October of last year, primarily to customers in Asia. Yet the Port is also working to reduce emissions and minimize its environmental impact. Those efforts include reducing diesel emissions from harbor dredging operations, more modern machinery for loading coal onto ships, and an improved dockside lighting system. The upgrades are aimed at making the Port of Newcastle one of the only ports in the southern Asia-Pacific region to receive a designation from EcoPorts Network, which manages environmental standards for ports.
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