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Hyundai Seeks to Take Over DSME, Inks Conditional Deal with KDB | Brazil Modal

LNG Carrier construction at DSME; Image Courtesy: Wikimedia Commons/Towel401 under public domain license


The move, if completed, would create a shipbuilding giant, providing a major boost to Hyundai’s shipbuilding capacities at a time when the company expects demand for newbuilds to remain at a high level.

To that end, DSME’s largest shareholder Korea Development Bank revealed that it had signed a conditional agreement with Hyundai to sell its shares in Daewoo, Reuters reports citing the bank.

The state-backed bank holds a 55.7 percent stake in DSME, with an estimated worth of KRW 2.16 trillion (USD 1.94 billion).

The report further indicates that the deal also includes liquidity support for DSME worth KRW 2.5 trillion won (USD 2.25 billion).

KDB also plans to approach Samsung Heavy Industries to determine whether there is any interest in acquiring a stake in DSME, as part of its plans to consolidate the three domestic shipbuilders.

The three shipyards are known as Korea’s Big Three as they account for majority of global orderbook and have unrivaled know-how and expertise in shipbuilding.

In 2018, DSME won orders for 47 vessels worth USD 6.81 billion, hitting approximately 93% of the company’s orderbook target for the year of USD 7.3 billion.

These included 18 LNG carriers, 16 large-sized crude oil carriers, 16 ultra large containerships, and 6 special-purpose vessels.

This was the first time the company had met 90% of its orderbook target in the last four years, since 2014, as the yard was badly hit by the slump in the shipbuilding industry from 2016.

Over the past three years the trio was investing strenuous efforts in reorganization and cost cutting, which included shedding of non-core businesses, job and wage cuts.

As part of its restructuring, earlier this week, Hyundai said it intends to sell part of its stake in refiner Hyundai Oilbank to Saudi Aramco for KRW 1.8 trillion.


Source: World Maritime News



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‘China’s economy reached new heights’: How the slowdown is being reported by Chinese state media

China’s economic slowdown is headline news around the world, with readers intrigued by the ongoing trade war with the United States.

But how is it being reported in China’s state media?

Gross domestic product (GDP)

Why it is important: This is the headline figure generally viewed as a barometer for the overall health of an economy. It is commonly described as “economic growth”.

The fact: China’s economy grew at 6.6 per cent in 2018, the slowest growth rate since 1990. It slowed from 6.9 per cent in 2017.

How was it reported in China?

People’s Daily

Headline: Exceeded 90 trillion yuan! China’s economy reached new heights

Excerpt: “The estimated size of China’s GDP in 2018 was 90.0309 trillion yuan, exceeding the historic mark of 90 trillion yuan for the first time, and remaining the second largest in the world. The annual growth rate of China’s GDP was 6.6 per cent in 2018, achieving the growth goal of 6.5 per cent. The Chinese economy contributed nearly 30 per cent of global economic growth, and continued to be the largest contributor to global growth.”

What did the foreign press say?

Australian Financial Review

Headline: China’s economy faces its toughest year in more than a decade

Excerpt: “China’s economy faces its toughest year in more than a decade with some economists warning true growth will fall as low as 4 per cent as deteriorating consumer confidence, a slowing manufacturing sector, and Donald Trump’s tariffs take their toll on Australia’s biggest trading partner.”

Birth rate

Why it is important: Fears over a falling birth rate feed into long-term anxieties about China’s shifting demographics. An ageing population with fewer people in the workforce is viewed as having negative implications for the economy.

The fact: New births in China fell to 15.23 million last year, the lowest since China relaxed its one-child policy in 2014. This is down from 17.86 million in 2016 and 17.23 million in 2017, according to official data.

How was it reported in China?

Xinhua News Agency

Headline: China’s population is still in a relatively stable period of growth

Excerpt: “Li [Xiru, head of the population and employment statistics department at the National Bureau of Statistics, or NBS] said the ‘comprehensive two-child policy’ has played a positive role in raising the fertility level, the number of second babies has largely offset the impact from declining numbers of first born children.

“He added that China still has a demographic dividend, with sufficient labour resources, even though the working age population has declined and the population is ageing.”

What did the foreign press say?

The Irish Times

Headline: China’s birth rate falls to lowest level in 60 years

Excerpt: “The number of babies born in China dropped to the lowest level in almost 60 years in 2018, a sign the birth rate is slowing in the world’s most populous nation despite efforts to encourage more children. “

“The population data adds to growing concerns about the world’s second largest economy. The Chinese economy grew by its slowest rate since the 2009 financial crisis during the last quarter, as the government deals with an ongoing trade war with the US and high levels of debt.”


Why it is important: Keeping the jobless rate in China low is a key priority for the government in Beijing, given that mass job losses could lead to social unrest.

The fact: China’s surveyed unemployment rate in urban areas stood at 4.9 per cent in December 2018, 0.1 per cent lower than in December of the previous year, according to data from the NBS.

Another metric of unemployment, the registered jobless rate, was measured at 3.8 per cent at the end of 2018.

How was it reported in China?


Headline: New changes in China’s employment – read about China’s annual economic achievements

Excerpt: “China’s job market maintained its stable development over the last year. The number of new jobs in urban areas hit a record high, boosting economic growth and underpinning social stability. The employment situation was improved thanks to better economic fundamentals. Over the past year, the structure of the Chinese economy continued to improve while the quality and efficiency kept rising, generating more jobs, stabilising employment, and driving the optimisation of job quality.”

What did the foreign press say?

The Diplomat (US)

Headline: China’s slowdown is starting to hit where it hurts: Employment

Excerpt: “The growing downward pressure on China’s domestic economy has made the employment situation particularly grim.”

“The reality confirms the grim employment situation in China. The internet industry is experiencing a downturn at the moment. Baidu, Alibaba, and Tencent, China’s internet giants, are a desirable place for jobseekers. But since September, the news of Alibaba scaling back its campus recruitment programme has caused an uproar on the internet. At the same time, news spread that Baidu and have stopped social recruitment and that Tencent will lay off about 6,000 of its staff.”


Why it is important: China has, since July 2018, been engaged in a tit-for-tat tariff war with the United States. Trade data, which measures the country’s exports and imports, is therefore keenly watched.

The fact: In December, total exports fell to US$221.25 billion, down 1.4 per cent from November and 4.4 per cent from the same month in 2017, according to data from China’s General Administration of Customs.

However, overall Chinese exports for 2018 were the largest in seven years and the trade surplus with the US reached a record high, boosted by strong gains in the first half of the year and the effects of order front-loading in the second half.

Both of these data were released at the same time.

How was it reported in China?

Xinhua News Agency:

Headline: Exceeded 30 trillion yuan! China’s foreign trade volume hit a record high in 2018

Excerpt: “China’s foreign trade volume reached a record high in 2018, increasing 9.7 per cent from the previous peak posted in 2017.”

“The country is expected to keep its position as the world’s largest trader of goods, said Li Kuiwen, spokesman for China’s customs administration. Li said the Chinese government had taken effective measures in last year to support the stable development of foreign trade and is coping with deep changes in the external situation. ‘Foreign trade remains stable and has seen advances,’ he said.

What did the foreign press say?

The Japan Times

Headline: Chinese exports in December contracted the most in two years, raising risks for global economy

Excerpt: “China’s exports unexpectedly fell the most in two years in December, while imports also contracted, pointing to further weakness in the world’s second-largest economy in 2019 and deteriorating global demand. Adding to policymakers’ worries, data on Monday also showed China posted its biggest trade surplus with the United States on record in 2018, which could prompt US President Donald Trump to turn up the heat on Beijing in their bitter trade dispute.”

Retail sales

Why it is important: As China attempts to shift its growth model from one that is powered by trade, investment and infrastructure, to one built on domestic consumption, these figures are a barometer of how that policy move is progressing.

The fact: The annual retail sales of consumer goods grew 9.0 per cent in 2018, slower than the growth rate for 2017, which was 10.2 per cent.

How was it reported in China?

Xinhua News Agency

Headline: Building a powerful home market, how consumer spending spurs economic growth.

Excerpt: “China’s annual retail sales moved above the 38 trillion yuan mark in 2018, reaffirming the position of consumer spending as the primary engine for the economic growth. Final consumption expenditure contributed 76.2 per cent of GDP growth last year, up 18.6 percentage points on 2017.”

“Consumer spending has been the number one driving force of economic growth for five consecutive years, exceeding investment and exports. Consumers are spending more on services, which will make the size of the consumer market larger and upgrade the market structure.”

What did the foreign press say?

The Guardian (UK)

Headline: Cautious consumers feel the pinch as Chinese economy slows

Excerpt: “For the many businesses that depend on the spending power of China’s middle class, winter has already arrived. After decades of breakneck growth, the world’s second largest economy is slowing down, and Chinese consumers are feeling the pinch.”


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MOL announces restructuring measures | Brazil Modal


1. Establishment of Chief Safety Officer
MOL will newly establish the position of Chief Safety Officer to supervise the planning of strategies and conduct measures to ensure the safety and quality of operations of MOL and the entire MOL Group fleet vessels, and give necessary advice to executive officers responsible for business divisions.

2. Establishment of Executive Officer Responsible for Promotion of Sustainability
MOL will newly establish a position of executive officer responsible for promotion of sustainability to supervise the planning of strategies and conduct and aggressively promote measures aimed at contributing to Sustainable Development Goals (SDGs) through MOL Group’s sustainable growth and business activities.

3. Establishment of Executive Officer Responsible for Europe/Africa and Executive Officer Responsible for the Americas
MOL will allocate an executive officer responsible for Europe/Africa and the Americas respectively, which up to the present have been supervised by one executive officer, to ensure faster decision-making and maximize the MOL Group’s overall profits in each region.

4. Restructuring of Ship Management Organization and Establishment of Marine Technical Management Division
With the aim of speeding up the establishment of countermeasures and preventative measures for onboard problems and enhance ship maintenance while ensuring the long-term safety and profitability of MOL’s vessel assets, MOL will integrate supervising functions of tankers, dry bulkers, car carriers, and containerships to establish the new Marine Technical Management Division to manage the fleet, with the goal of establishing MOL as the world leader in safe operation.

5. Dividing/Renaming Dry Bulk Carrier Division (B) and Renaming Dry Bulk Carrier Division (A)                                                                              MOL will divide the businesses of Dry Bulk Carrier Division (B) by cargo into the Wood Chip Carrier Division and the Bulk Carrier Division, to offer stressfree services to meet customer needs in both fields. And it will rename the Dry Bulk Carrier Division (A) the Iron Ore and Coal Carrier Division.

6. Renaming Steaming Coal Carrier Division
The Steaming Coal Carrier Division will be renamed the Steaming Coal & Energy Project Division, reflecting the role of the organization in providing coal transport services to meet changing customer needs, and engaging in related fields and energy projects such as coal ash and biomass, to offer stress-free transport services.


Source: MOL


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Currency refers to money that is used as a medium of exchange for goods and services in an economy. Before the concept of currency was introduced …


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Hundreds of containers carried weekly (EADT) | Brazil Modal

It is the latest initiative in removing shipping containers from the road and on to rail services and will carry goods to and from the Suffolk port.

Hundreds of shipping containers (boxes) can be moved every week on the new direct service.

The first locomotive on the service left Birch Coppice at 14:14 on January 23, 2019 and arrived at Felixstowe at 20:14, having passed through Hams Hall, Leicester, Peterborough and Ipswich along the way.

Made up of 33 platforms, the service transports a mixture of intermodal containers, and will initially run five days a week.



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India among countries to benefit from US-China trade war: UN

Geneva: India is among the several countries that stand to benefit from the ongoing trade tensions between the world’s top two economies – the US and China, the UN has said in its latest report. The US and China are locked in a trade war since President Donald Trump imposed heavy tariffs on imported steel and aluminium items in March last year, a move that sparked fears of a global trade war.

In response, China imposed tit-for-tat tariffs on billions of dollars worth of American imports.

The United Nations experts said Monday that the tit-for-tat trade dispute between China and the United States may do little to protect domestic producers in either country and could have “massive” implications on the global economy unless it is resolved.

Of the USD 250 billion in Chinese exports that are subject to US tariffs, only about six per cent will be picked up by firms in the US, according to a report by the UN Conference on Trade and Development (UNCTAD).

And of the approximately USD 85 billion in US exports that are subject to China’s tariffs, only about five per cent of this will be taken up by Chinese firms, according to the UN research.

In a bid to meet the US’ demand of bringing down the USD 375 billion bilateral trade deficit, China has pledged to take measures to step-up American imports and investments. March 1, 2019 is the deadline for implementing the measures.

Unless the US and China agree to drop their tariff dispute by March 1, duty on each country’s products will rise to 25 per cent, up from the current 10 per cent level, the UN said.

Countries that are expected to benefit the most from the trade war are the EU members as exports in the bloc are likely to grow by USD 70 billion. Japan and Canada will see exports increase by more than USD 20 billion each, it said.

Other countries set to benefit from the trade tensions include Australia, with 4.6 per cent export gains, Brazil (3.8) India (3.5), Philippines (3.2) and Vietnam (5), the study said.

Quoting former US Secretary of State Cordell Hull, UNCTAD’s Pamela Coke-Hamilton repeated his description of protective tariffs as “a gun that recoils on ourselves”, which had also contributed to the Great Depression of the 1930s and the rise of extremism.

“I think that is a single lesson from what we have had here today. If – barring an agreement between the US, China on March 1 – tariffs will escalate to 25 per cent, which is a significant difference from the 10 per cent as it currently exists,” Coke-Hamilton said.

The implications of such a development would be “massive”, the UNCTAD Director, Division on International Trade in Goods and Services, and Commodities, continued, adding that its effects would first of all involve “an economic downturn… due to instability in commodities and financial markets”.

“One major concern is the risk that trade tensions could spiral into currency wars, making dollar-denominated debt more difficult to service,” the report added.

Imposing tariffs make US-made products cheaper than imported ones, and encourage consumers to buy American.


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Happy Chinese New Year

WhatsApp Image 2019-01-28 at 16.37.39

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Higher volumes at Port of Durban | Brazil Modal


That’s an increase of 276000 TEU for the year or just over 10%, which will prove very encouraging to Transnet Port Terminals (TPT). Nationally the increase on containers was 5.3% with the total for all ports reaching 4.833million TEU.

Total cargo throughput involving all products for Durban was 83.161million tons, up from the 78.106million tons of 2017 (6.47%). Nationally the figures were 294.29million tons, an increase of 1.33%. on the 290.428million tons in 2017.

The number of ships arriving in our ports continues to decline, although this is not reflective of declining cargo volumes but of the use of much larger ships, in particular container vessels.


Source: Independent Online


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Donald Trump is Looking For a “Mission Accomplished” Moment in The Trade War – China Merely Seeks a Win-Win Conclusion

In normal circumstances, countries relax tariffs against one another during low key bilateral meetings which typically take place on the soil of one of the two nations whose tariffs are going to be mutually lowered. But for Donald Trump whose infamous trade war on China is more of an ideological act than anything to do with modern economic realities, it appears requisite that he declare “victory” with an over-the-top ‘made for television’ ceremony.

While it is still not confirmed that China and the US have reached a final agreement to end the trade war and advance into a new era of mutual economic openness in respect of bilateral trade, both sides have subtly indicated that things are in fact progressing in a positive way in the aftermath of talks between White House officials and a Chinese team led by Chinese Vice Premier Liu He. One such indication came from Trump himself who Tweeted the following during Liu’s visit to America:

“China’s top trade negotiators are in the U.S. meeting with our representatives. Meetings are going well with good intent and spirit on both sides. China does not want an increase in Tariffs and feels they will do much better if they make a deal. They are correct. I will be meeting with their top leaders and representatives today in the Oval Office. No final deal will be made until my friend President Xi, and I, meet in the near future to discuss and agree on some of the long standing and more difficult points. Very comprehensive transaction…China’s representatives and I are trying to do a complete deal, leaving NOTHING unresolved on the table. All of the many problems are being discussed and will be hopefully resolved. Tariffs on China increase to 25% on March 1st, so all working hard to complete by that date!”

Reading between the lines of classic Trump rhetoric, the US President indicated on the 31st of January that as he intends to finalise the a trade deal with China before the artificially established (unilaterally by the US) deadline of the 1st of March, whilst also insisting that the final deal is signed directly between himself and President Xi Jinping – clearly a bilateral summit between the Chinese and American leadership will need to occur sometime in February.

The matter became all the more intriguing when reports surfaced which indicate that Xi and Trump may meet at the end of February in Da Nang. This is significant for two reasons. First of all, holding such a meeting in a third nation (as opposed to in China or the US) is indicative of the fact that from Donald Trump’s position, he sees the meeting as an historic act of detente with China. In this sense, Trump clearly wants his next meeting with Xi to have the optics of Ronald Reagan’s infamous meeting with Mikhail Gorbachev in Reykjavík or indeed Trump’s own 2018 bilateral meeting with Vladimir Putin in Helsinki.

When extrapolated further, this likewise means that Trump wants the meeting to be surrounded by the kind of pomp and circumstance usually reserved for bilateral meetings between adversaries in a Cold War or neo-Cold War environment, rather than that of two powerful trading partners working through an isolated dispute. This clearly sends a mixed signal to both Americans and to Chinese.

From the American perspective, Trump self-evidently hopes to achieve a “mission accomplished” moment in respect of the trade war by shaking hands with his “friend” Xi Jinping in front of the cameras in Vietnam. On the other hand, by holding the summit in a third nation’s territory, Trump is re-emphasising that the trade war is symptomatic of a broader multi-front neo-Cold War against China that is supposed to conjure images of often tense and mutually suspicious meetings between Soviet and American officials during the original Cold War.

From the Chinese perspective, such a posture is clearly unhelpful as it runs antithetical to the win-win formulation behind China’s goals when reaching agreements with foreign partners.  Furthermore, in spite of recent improvements in China-Vietnam neighbourly relations, Vietnam remains strategically close to the US while Sinophobia continues to be present in certain political and social circles in Vietnam. Thus, while China would welcome a Trump meeting in Vietnam as an opportunity to deepen harmonious relations with the Vietnamese government, for the Americans, there is clearly an attempt to send a thinly veiled but ultimately arrogant message to China regarding America’s influence in its erstwhile foe of Vietnam.

Finally, as rumours have been rife that a soon to be announced summit between Donald Trump and DPRK Chairman Kim Jong-un will take place in Vietnam, it cannot be excluded that a Trump-Xi summit and a Trump-Kim summit could take place during the same visit to Vietnam by the American President. Such a meeting would hypothetically send another mixed message to the wider world. Such a message would indicate that Donald Trump views China and the DPRK in a similar light – as adversaries who are engaged in a difficult peace process. Such optics would clearly be insulting to China as China’s relations with the US since 1979 have been vastly more productive than the continually strained (non)relations between Washington and Pyongyang. On the other hand, if logically such a meeting could turn into a trilateral meeting between Xi, Kim and Trump, it would be representative of a new age of cooperation between two of the three superpowers and a DPRK government that has embraced peace and a road to international openness. It remains to be seen how such mutually exclusive circumstances might ultimately unfold.

As China’s trade surplus with the US grew during the trade war, the idea that the trade war could be “easily won” as Trump once said it could be, has been exposed as an objective falsehood. That being said, individual sectors in both the US and China have been hit by the trade war and as such, it appears that in the run-up to next year’s elections in the US, Donald Trump needs to declare all of the victories he can in order to appear like a winner before the US voters. This for example is why he has effectively declared victory against Daesh in Syria and Iraq whilst he appears to be on the verge of declaring “victory” in Afghanistan as well.

While China has no need to celebrate the likely end of the trade war with the pomp and circumstance apparently sought by Trump. China is happy to allow Trump to declare a zero-sum victory whilst Chinese officials themselves continue to look for new win-win solutions to a variety of issues regarding China’s trading relations with multiple nations.


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Navios Containers Reports 72 Pct Increase in Fleet Capacity | Brazil Modal

Image courtesy: Unsplash/Cameron Venti


As informed, the company’s fleet increased from 21 to 30 vessels since the end of 2017, representing a 43% rise in the number of vessels and totaling 152,821 TEU.

The above number includes one containership to be delivered in Q1 2019 and the exercise of the option to acquire one additional 10,000 TEU containership.

In January 2019, Navios Containers exercised an option to acquire a 2011-built 10,000 TEU containership from an unrelated third party for a purchase price of USD 52.5 million. The 10,000 TEU unit is expected to be delivered into the company’s fleet during Q1 2019. What is more, the company has the option to buy one more 2011-built 10,000 TEU ship which would be delivered in Q2 2019.

A month earlier, the company took delivery of two 2010-built 4,360 TEU boxships, the Bahamas and Bermuda. This is in addition to several containerships acquired by Navios Containers since the beginning of 2018.

“NMCI has grown its fleet to 30 containerships. Our investment in our fleet is split roughly equally into Baby Panamax and Neo Panamax vessels, offering an attractive mix of potential in cash yield and capital appreciation, as the Neo Panamaxes provide cash flow while our initial investment thesis in the Baby Panamax comes to fruition,” Angeliki Frangou, Chairman and Chief Executive Officer of the company, said.

The developments related to the company’s fleet growth were announced in the company’s financial results for 2018 which show that Navios Containers delivered a net income of USD 12.7 million, against USD 2.6 million seen in the period from April 28, 2017 (date of inception) to December 31, 2017.

For the three months ended December 31, 2018, the company saw a net loss of USD 0.2 million compared to income of USD 1.7 million posted in the same period of 2017, due to expenses related to the company’s listing on a US exchange.

“I am pleased with the results for the full year and fourth quarter of 2018. For the full year, Navios Containers reported USD 69.3 million of adjusted EBITDA and USD 17.7 million of adjusted net income. For the fourth quarter, we reported USD 15.3 million of adjusted EBITDA and USD 2.4 million of adjusted net income,” Frangou added.


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