China has become a very important shipping nation in many respects. Also in this issue: Conversions, COSCO, Baosteel, Bohai, Anglo Eastern, Wallem, Parakou, China Steel Express and Klaveness.
Text and photographs: Magne A. Røe, except where otherwise stated.
Date: 04 February 2008
Baosteel in Shanghai is the third largest steel producer in the world and number 372 on the Fortune list of the 500 biggest companies in the world.
These days it can generally be agreed that the bulk carrier market is rather hot and that the tanker market is a bit slower. Reflecting the market trend, many owners have consequently decided that being able to offer tonnage for transporting such things as iron ore to, for example, China is a good and secure trade for the years to come, and are converting their VLCCs into VLOCs.
DNV is heavily involved in the business of ship repair and conversions in China, and at the DNV regional headquarters in Shanghai we meet DNV’s Richard Simpson, head of the ships in operations department.
“The main vessels delivered from the Bohai shipyard, part of the CSIC Shipbuilding group, are bulk carriers of our own design,” says Li Tian Bao, Chairman of the Board and General Manager of the Bohai Shipbuilding Heavy Industry Co, Ltd. (BSHIC).
Tor E. Svensen, Chief Operating Officer for DNV Maritime is this year the chairman of IACS, the International Association of Classification Societies. In this capacity he recently addressed, among others, the shipowners associations in Singapore and Hong Kong.
“The pressure is on in the bulk carrier market. With today’s high rates, planning maintenance, ensuring spare parts, getting a slot for repairs at a yard when ’all the yards’ want to go into newbuilding, and then the logistics of running vessels are a challenge! Can you imagine for instance a day’s off-hire at $ 50,000?” Anglo Eastern’s Chief Executive Officer Peter Cremers talks to us about operating in a hot market at the company’s Hong Kong headquarters.
In 1887, Haakon J. Wallem arrived in Shanghai where he established Wallem and Company and later Wallem Shipbroking in 1903. The first ship managed by the company was the Oscar II in 1905. A Hong Kong office was opened in 1925.
The Parakou Group has a fleet of 28 bulk carriers and 13 tankers plus some additional tonnage, adding up to a total of 44 vessels. The bulk carriers are managed from Hong Kong; 16 of them are Panamax while twelve are Handymax.
China Steel Express Corporation (CSE) in Kaohsiung is fully owned by China Steel Corporation (CSC) in Taiwan. CSC is a leading steel producer and as such, has a subsidiary for marine bulk transportation has proved to be a good solution for the company.
So far this year we have regularly seen announcements or media coverage about owners either buying or using own VLCCs for conversion into Very Large Ore Carriers (VLOCs). Lately, we have also observed several smaller vessels (Aframax and Suezmax tankers) being committed for conversion as well. With a booming dry bulk freight market, the final cut-off date for single hull tankers nearing, and generally strong expectations for continued growth in ore imports to (especially) China, this might seem to be a good idea.
The total volume of ship newbuildings is at an all time high and still growing. This is also a challenge to DNV as it takes time to develop and educate our surveyor base and to ensure that the quality of our work is always up to our standards.
The major dry bulk operator Klaveness Maritime Logistics has decided to implement DNV’s Hull Integrity Management service line. Initially the system will be implemented for six Cabus, which operate as combination vessels, with dry bulk as well as caustic soda.
The Baltic Dry Bulk Index rose by as much as 43 per cent from the beginning of September to late October, when some minor corrections were seen. In early November, this index was over twice as high as in mid-June.
China Shipping Group and Dalian Shipbuilding Industry recently signed a contract to build four 300,000 dwt very large ore carriers (VLOCs). All will be dual classed by DNV and China Classification Society (CCS).
