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ESL Shipping’s Crane Issues on New Vessels Mainly Fixed | Brazil Modal

Image Courtesy: ESL Shipping

Aki Ojanen, CEO of Aspo Group, said that the new ships “were disappointments” as their cranes remained inoperable throughout the first quarter, and they were unable to operate as planned.

At the end of the period, crane manufacturer Cargotec MacGregor informed that it had mainly returned the cranes operational.

The installation and testing of the autonomous crane system were postponed to the second quarter of the year due to warranty repairs.

The extensive and serious problems in the conventional mechanics of all the cranes aboard the ships have affected the company’s profitability in the first quarter of 2019. The issues resulted in significant loss of income and additional costs for the shipping company as ESL Shipping had to identify other transportation options with a lower profitability during the repairs.

ESL Shipping however ended the quarter with an increase in its operating profit, driven by higher transportation volumes and the earnings of the acquired Swedish shipping company AtoB@C.

Operating profit for the quarter was up at EUR 3.2 million, compared to 2.6 million reported in the same period in 2018. The operating profit rate for the period was 7.3%, which is low considering the long-term target, the company explained.

Net sales increased by 113% from the comparative period and stood at EUR 43.7 million, up from EUR 20.5 million, as a result of the vessel capacity brought by the AtoB@C acquisition, the deployment of the two new LNG-fueled vessels and higher transportation volumes.

The cargo volume carried by ESL Shipping during the first quarter amounted to 3.6 million tons, rising from 2.5 million tons handled a year earlier.

Looking forward, ESL Shipping expects the financial performance of the new LNG-fueled vessels to reach the targeted level starting from the second quarter.

Uncertainties associated with the development of the cargo markets are expected to have the most significant impact on the performance of the shipping company’s largest Supramax vessels in 2019.

Most of the use of the shipping company’s transportation capacity has been secured in the Baltic Sea and Northern Europe through long-term agreements. The current forecasts of general transportation volumes of contractual partners are satisfactory in the key customer segments, even though there are uncertainties in demand due to the political situation and increased economic uncertainty.


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Turkey’s Weak Economic Rule Spells Trouble For The Lira

By Guney Kaya

With weak Turkish economic outlook and failed attempts to cultivate investor interest in the Turkey, we expect continued declines in the Lira’s future.

Turkey Needs Cash

Since the 1980s, the Turkish economy has been highly dependent on foreign credit. The economy is built around the need for consistent foreign cash flow, and any hitch causes major economic problems just like it did last summer, where the Lira depreciated by more than 40%. As the municipal elections end (other than Istanbul’s), Erdogan’s government is desperately trying to lure investors for inflows to boost the economy and increase growth while trying to heal the wounds of the Lira Crisis. The desperation comes from the fact that the Central Banks reserves drastically decreased in the last month by $5 billion, leaving Central Banks immediate reserves on $26.9 billion only. Investors are justifiably worried since Turkey has obligations to pay $118 billion in the next 12 months.

Albayrak and his team travelled around trying to assuage investor concerns, presenting policies to better the Turkish economic situation. Investors were unconvinced, however, by his weak assurances that a depreciated Lira would sustainably reduce the trade deficit. They were also unimpressed by the newly initiated infrastructure projects that promised little profit and seemed to only be in place to reduce unemployment, contributing further to inflation fears.The investors, seconded by Moody’s, demanded high yields on their credit. With yet another failure as minister, Albayrak, already seen as a nepotistic choice of minister, continues to lose credibility and agency over the state of the Turkish economy.

High Inflation

Inflation, another serious economic problem for which no healthy solution has been implemented, has been rising rapidly after the Lira Crisis. On October Consumer Price Index peaked at 25.24% which was the highest in 15 years. Despite the radical measures of The Erdogan government, it only lowered to 19.71% in March on a year over year basis.

Inflation is the greatest in food, especially fruits and vegetables. Consequently, the government decided to take some concerning countermeasures, beginning with removing the tariffs on vegetables, highly damaging the local producers, and threatening corporations with high vegetable stocks in their warehouses to force them to sell at sub-market prices. Additionally, the government imported a massive amount of these vegetables and started selling them at a loss through tents built on the streets with a quota per person, which ended up in scenes like Venezuela and East Germany. Were it not for these unsustainable and totalitarian anti-inflationary policies, inflation would be substantially higher than the published data. In the long run, these countermeasures that not only introduce competition from better facilitated foreign actors but also directly undermine the competitiveness of the local businesses, will damage the prospects of local businesses and drive Turkey further into a situation of trade deficit and consequent Lira decline.

Furthermore, aside from the anti-inflationary countermeasures, the inflation itself has a negative effect on Turkish companies, compounding the problems in capital markets started by the Lira crisis. Car producers took the biggest hit as car sales decreased by 59% from last year leading to substantial layoffs. Real estate is also struggling as real estate valuations slid dramatically against the USD. Real estate valuations sharply decreased in dollars as lira bottomed out.

Due to inflation induced headwinds in the capital and consumer markets, as well as the direct currency impact of inflation, the Lira could very well see further declines.

Rising Cost of Debt and Turkish Eurobonds

With Turkey’s struggles to find cheap debt, they’ve been left looking to the Eurobond markets to mitigate investors’ concerns with the Lira. Turkey Issued more than double the amount of Eurobonds YoY, saddling turkey with a huge debt burden at a substantial 7.625% coupon rate, 50% greater than the rate on last year’s Eurobonds. Although the Turkish economy does not look very promising lately with the recent crisis and fundamental problems, investors have eaten up these high-yielding Eurobonds, with the issue being oversubscribed by 2.6 times. Lately, even the Turkish citizens have been choosing Turkish Eurobonds to their conventional investment plans, as they are promising very high yield.

This is because the Turkish Eurobonds may not be as dangerous as the credit rate of Turkey suggests. Though, there are plenty of economic indicators that look negative. Turkey still has the IMF card to play in the case of another currency crisis. Turkey’s debt is still not too high compared to its GDP. Even though it’s leveraging itself now, Turkey’s gross external debt to GDP ratio is less than most of the European countries at only 57.5%. However, with the rising levels of Turkish debt, as well as the weak economic situation, the ratio may end up rising faster than expected.

Trade Deficit

The weakening has Lira significantly decreased imports by 21.45% in the first quarter of 2019, with exports have increasing by 3.34% in the same period. Turkey’s negative trade balance shrank in 2018 October and stayed in the moderate levels even after Lira increased against the global currencies.

The decreasing trade deficit may seem promising for Turkey as they have been struggling with growing negative trade balance for a long while. However, this relief maybe be unsustainable as it is brought on by producers using their current stocks, which will finish eventually leading exports to increase.

The Play: Opportunities Come with Risk

In conclusion, the economic situation looks uncertain, but the Turkish economy is still not chaotic enough to predict default in the foreseeable future. Turkish currency is highly volatile and investing in Turkish Lira bears high risk. The Turkish currency has been depreciating since the beginning of February and it is likely that with rampant inflation and weak economic outlook that this will continue. Additionally, there are plenty of other threats to the Lira which might compound its decline such as regional problems, disputes with the USA due to S-400 Russian missiles and Erdogan’s radical speeches and municipal election renewals suggesting consolidating totalitarianism. Although Lira looks powerless and a Lira short may seem reasonable, be aware that shorting Lira comes with considerable risks as Central Bank tends to take radical measures in extreme situations. Firstly, we saw a 625bp increase at Central Bank Rates during the last Lira crisis. Moreover, the Central Bank tightening liquidity before the elections caused the overnight swap rates to jump to 1000%, as investors wanted to short Lira just before the Municipal elections, betting on political instability.

Turkish Eurobonds may be a more interesting alternative than FX trades for investors seeking a medium risk fixed income issue. On the other hand, investing in Turkish companies and real estate should be avoided, even though Turkish stocks are appealing with very low book ratios and real estate is on discount with the weak lira.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.


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Port of Virginia enjoys record-April volumes | Brazil Modal

The strong cargo performance was driven by an increase of more than 22 percent in loaded import containers, which lead to increase in truck, rail and barge volumes. The port’s March volumes were disrupted by the Chinese New Year, which led to the late arrival of vessels and blank sailings: April’s import volume reflected a return of the cargo.

“We knew April was going to be a productive month and as we move toward peak season, this and higher volume levels will become normal, but we are more prepared for these increases than ever before,” says John F. Reinhart, the CEO and executive director of the Virginia Port Authority. “We are just weeks from completion at Virginia International Gateway (VIG) and debuting this world-class facility in its entirety. The productivity and efficiency we are seeing there is going to be instrumental in managing and effectively processing peak season volumes.”

As volume grows, the amount cargo moving over the port’s inland operations, Virginia Inland Port (VIP) and Richmond Marine Terminal (RMT), is increasing in parallel. At VIP volume was up nearly 13 percent, or 367 containers, and at RMT volume was up more than 30 percent, or 2,957 containers. Rail volume was up 18 percent, or more than 52,000 containers, and total barge volume was up nearly 24 percent, or 936 containers.

To date at VIG, 13 new container stacks serviced by 26 new rail-mounted gantry cranes (RMGs) have been delivered, four new truck gates have been opened, a new terminal operating system has been implemented, the berth has been lengthened by nearly 800 linear feet and four new ship-to-shore cranes have been placed into service. The last step is completing the second phase of the on-dock rail yard.

“We are going to be fully-operational at VIG in very short order,” Reinhart says. “The project is on-budget, on-time and we are out aggressively marketing the benefits of doing business at The Port of Virginia.”

The expansion at Norfolk International Terminals is progressing according to schedule. There are 12 new stacks served by 24 new RMGs already in service. Work on phase II of the stack yard expansion (six stacks) began in December 2018 and is nearing completion; work on phase III (12 stacks) begins this month.

April Cargo Snapshot

  • Total TEUs – 245,933, up 12.2%
  • Loaded Export TEUs – 85,378, down 1%
  • Loaded Import TEUs – 119,266, up 22.2%
  • Total Containers – 139,004, up 11.3%
  • Breakbulk (tons) – 13,018, up 4.1%
  • Virginia Inland Port Containers – 3,272, up 12.6%
  • Total Rail Containers – 52,052, up 18%
  • Total Truck Containers – 82,047, up 6.8%
  • Total Barge Containers – 4,905, up 23.6%
  • Richmond Barge Containers – 2,957, up 30.2%
  • Vehicle Units – 1,797, up 132.2%


Source: Port of Virginia


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Commentary of the Ministry of Industry and Trade of the Czech Republic on foreign trade results in March 2019


EU and Foreign Trade Section 51000 in cooperation with department 71200

Exports grew by 5.4% year-on-year to CZK 330 billion and imports by 4.3% to CZK 308.2 billion.

“Foreign trade in goods showed good results in March. The volume of exported goods as well as the trade surplus was highest since the beginning of this year. Exports grew faster than imports, which was reflected by a higher year-on-year increase in the trade balance surplus. Exports of manufacturing products, especially motor vehicles, have been successful. However, the question remains whether surprisingly strong March data will be repeated or return to a long-term decelerating trend in the coming months. In our opinion, the balance of goods will continue to decline this year” said Vladimír Bärtl, Deputy Minister of Industry and Trade for the European Union and Foreign Trade.

For more information see:



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Odfjell Shrinks Loss as Chemical Tanker Market Improves | Brazil Modal

Image Courtesy: Odfjell

The company reported a net loss of USD 15.4 million in the first quarter of 2019, compared to a net loss of USD 47.6 million posted in the fourth quarter of 2018.

EBITDA was USD 47.2 million in Q1 2019, compared to USD 32.7 million recorded in the previous quarter.

Odfjell Tankers’ EBITDA rose to USD 39.7 million in the three-month period ended March 31, 2019, from USD 27 million in the fourth quarter last year.

As informed, the stronger result was driven by stronger spot rates on main tradelanes and lower bunker costs. This countered lower volumes and fewer revenue days compared to the previous quarter.

“The chemical tanker markets improved in the first quarter. We expect this trend to continue as a result of the strong fundamentals in our markets and a firming tanker market in general,” Kristian Mørch, CEO of Odfjell SE, commented.

“We decided not to aggressively pursue or extend contracts at the historically low markets at the end of 2018. This reduces our COA portfolio, but also increases our exposure in the firming market. We expect to continue improving our performance in the coming quarter,” he added.

During the quarter, Odfjell sold and redelivered four vessels. The company took delivery of one super-segregator on long-term time charter. It also renegotiated several time charter agreements at more favorable terms.

What is more, Odfjell Terminals’ EBITDA increased to USD 6.7 million in Q1 2019 from USD 4.8 million seen in Q4 2018.

As explained, the main changes in results compared to Q4 2018 were due to USD 2 mill of legal and tax restructuring expenses as well as IT unwinding expenses in the previous quarter.

Following the sale of Odfjell Terminals Rotterdam (OTR), Odfjell Terminals will close its headquarters in Rotterdam in June 2019, the company informed. Odfjell Terminals will be controlled from Odfjell’s headquarters in Bergen, and this is expected to result in reduced costs for the company.

As a consequence, Frank Erkelens will step down as CEO for Odfjell Terminals during 2019 and a new global head of terminals will be relocated to Odfjell’s headquarter in Bergen, Odfjell revealed.


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EU, Mercosur to Close Deal Defying Global Trade War, Brazil Says

The European Union and the South American trade bloc Mercosur will likely close a trade agreement in coming weeks or months, Brazil's Foreign …


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Port of Frederikshavn Contracts Bladt Industries for New Oil Terminal | Brazil Modal

Image Courtesy: Bladt Industries

Developed as part of a turnkey project under which Bladt Industries will be responsible for the design, construction and commissioning, the oil terminal will be built on the new part of the port in Frederikshavn.

The facility will consist of 11 storage tanks and with a total capacity of 74,400 m3 for maritime products and wastewater, the plant will be Scandinavia’s largest.

In addition, loading facilities, pumping station, and pipeline system will be established for import and export of both marine diesel and heavy fuel, central heating systems, and staff facilities.

“We have, in cooperation with Stena Oil, been in close negotiation with Bladt Industries and we are pleased to have reached an agreement with Bladt for the construction of the new terminal,” Mikkel Seedorff Sørensen, Port of Frederiskhavn CEO, commented.

“We are looking forward to start the construction stage and not least the commissioning of the terminal by the end of 2020.”

The planning work has already commenced, and during the summer of 2019 Bladt will be visible at the harbor in Frederikshavn.

The terminal will be finished and ready for operation by the end of 2020, where it will be rented and operated by Stena Oil.

“This new … bunker terminal is a key component in our preparation for the post IMO 2020 market,”Jonas Persson, Managing Director of Stena Oil, said.


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India-US trade tussle: Wilbur Ross meets Prabhu, discusses outstanding issues

Ross is visiting India to attend the 11th Trade Winds Business Forum and Mission hosted by the US Department of … Other Foreign Trade Videos.


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Pavilion Energy Conducts Singapore’s First STS LNG Bunkering | Brazil Modal

Image Courtesy: SLNG Corporation

The operation comprised a reload of 2,000 m3 of LNG onto a small-scale tanker at the newly-modified Secondary Jetty of the Singapore LNG (SLNG) Terminal, followed by a ship-to-ship transfer to the receiving heavy-lift commercial vessel.

“Pavilion Energy’s first commercial ship-to-ship LNG bunkering operations in Singapore demonstrates our strong commitment and capability to deliver a comprehensive suite of LNG bunker supply solutions to Singapore and the region,” Frédéric H. Barnaud, Group CEO of Pavilion Energy, said.

“As the world’s largest bunkering port, Singapore is committed to provide a range of bunkering solutions to meet the future energy needs of the global shipping industry,” Quah Ley Hoon, Chief Executive of MPA, said.

Pavilion Energy demonstrated its truck-to-ship bunkering capabilities in 2017, and further expanded its bunker logistics with the charter of its first LNG bunker vessel newbuild in February 2019.

The 12,000 m3 GTT Mark III Flex membrane LNG bunker vessel is set for delivery by 2021, and is the largest of its kind set for use in the Port of Singapore to date, the company concluded.


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Directorate general of domestic trade

The Office of the Additional DGFT (CLA), is the Northern Zone Head Quarters of Directorate General of Foreign Trade (DGFT), an attached office of the …


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