Archive for April, 2011


Thursday, April 28th, 2011

Aussie dollar keeps climbing

towards 110 US cents

April 28, 2011 – 3:25PM

The Australian dollar has continued its record-breaking march towards the 110 US cent mark, charging through 109 US cents on its way to another post-float peak.

At the local close, the dollar was buying 109.09-14, after earlier touching 109.48 US cents, the highest level since February 1982, or almost two years before the dollar was floated.

The Australian dollar was also buying 89 yen, 73.5 euro cents and 65.3 pence.

The local currency had rocketed more than 2 US cents since noon yesterday because of renewed worries about the US dollar – which has sunk to its lowest in three years against a basket of currencies. The US Federal Reserve gave no indication overnight that it would raise its interest rate anytime soon.

Following the five-day Easter and Anzac Day weekend, the local unit resumed its recent rally after headline inflation figures for the March quarter came in at their highest since the June quarter of 2006.

Travelex head of dealing Bernie Tuck said the Aussie dollar was due for a pause following the flood of economic news in Australia and the US in the past 24 hours.

“The fundamental fact is that the Aussie is incredibly strong at the moment. The US dollar is weak across the board and there is no indication that the US is going to raise rates any time soon,’’ he said.

‘‘We’re effectively in uncharted territory. The rally upwards in the course of the last few sessions has been extraordinary.”

Mr Tuck said the Aussie has also been aided by a huge amount of so-called carry trade, or borrowing in low interest rate-linked currencies, such as the US dollar or Japanese yen, for investment in the local dollar which benefits from higher interest rates.

The Reserve Bank’s 4.75 per cent interest rate is the highest in the developed world, said Mr Tuck.

Westpac senior market strategist Imre Speizer said market optimism continued to encourage traders to invest in risk assets such as the Australian dollar.

“Risk appetite remains intact globally (and) the trend for the Australian dollar continues to be upwards,” he said from Auckland.

The US central bank’s Federal Open Market Committee (FOMC) ended its two day meeting early today, after which Fed chairman Ben Bernanke said the bank would complete its $US600 billion ($556.2 billion) economic stimulus plan in June as planned.

“The FOMC gave the Australian dollar a bit of a burst by keeping the status quo intact. There were no surprises at all, so the weak US dollar story remains, Mr Speizer said.

The Reserve Bank of Australia’s trade weighted index (TWI) was at 79.1, the highest since 1985, up from 78.7 on yesterday.

AAP, with Chris Zappone, BusinessDay

Sourced & published by Henry Sapiecha


Thursday, April 28th, 2011


Fryer grease rustling rises

due to oil price hikes

By David Hendee

OMAHA, Neb | Wed Apr 27, 2011 11:16am EDT

(Reuters) – Rises in fuel prices have led to an increase in the number of used fryer grease rustlers roaming restaurant alleys in the United States.

Grease thefts have spiked whenever fuel prices climbed during the last four years and this spring is no different, according to Tom Cook, president of the National Renderers Association.

“It’s on the rise and it’s because of higher oil prices,” Cook told Reuters in a telephone interview. “I have one member who told me it’s costing his business $1 million a year.”

Recyclers typically contract with restaurants to pick up the waste product. The grease is cleaned and sold for use as biofuel, livestock feed and other products.

An Omaha recycler has filed theft reports with police in Omaha and Lincoln in Nebraska, and Sioux City, Iowa. Thieves recently stole about 4,200 pounds (1,909 kgs) of used grease from six Lincoln fast-food restaurants.

Processed fryer oil is not trash. It is called yellow grease and is traded. Its value is driven by higher prices of gas and ethanol.

Recyclers and collectors pay restaurants about 18 cents a pound for grease. After further processing, it can be sold for 42 to 45 cents a pound, said Cook, who is based in Alexandria, Virginia.

Yellow grease was trading for less than 8 cents a pound in 2000.
The Fruit Salad Company

Cook said he plans to conduct an industrywide survey to determine the extent of the losses. Many restaurant owners don’t realize what they are losing and local law enforcement agencies have other crime-fighting priorities, he said.

One way to curb demand for stolen grease is to alert potential buyers, especially in the feed industry, to only buy from known sources to ensure the product they receive is free of impurities and moisture, Cook said.

“The price (of yellow grease) is real good right now,” he said, “and those who steal it are really getting a good deal because they’re not paying for it.”

(Editing by Jerry Norton)

Sourced & published by Henry Sapiecha


Monday, April 25th, 2011

Wealth fund design up for grabs

Clancy Yeates

April 22, 2011


SOVEREIGN wealth funds have enjoyed a meteoric rise, shrugging off the global financial crisis thanks to soaring commodity prices. The value of assets held by these government-controlled monoliths leapt 11 per cent to $US4.2 trillion last year – almost double all private equity holdings. The sector’s value is tipped to hit $US5.5 trillion next year and $US10 trillion by 2015.

Among the countries that have gone down this path there is a recurring theme – commodity wealth. From the $US38.6 billion Kazakhstan National Fund to the

$US627 billion Abu Dhabi Investment Authority, the trend was led by oil-rich states from the 1950s.With oil as its single resource, Norway’s sovereign wealth fund invests all its money overseas. Photo: Bloomberg

Resource-poor countries such as Singapore and South Korea have also used sovereign funds to pool public pensions or save their foreign exchange reserves. However, it is commodity-rich states that are most relevant to Australia.

According to the International Monetary Fund, almost all the sovereign funds established by commodity-rich countries have one of two objectives: saving the windfall from a boom or smoothing the bumpy ride of commodity cycles.

Australia’s Future Fund is a public servants’ pension fund that neither smooths the boom-and-bust cycle nor saves for the nation – and many economists say this is a major gap in our policy settings.

Former Reserve Bank governor and superannuation chief Bernie Fraser says we should be storing away the valuable ”nuts” of the current boom.

”We’re just floating by on the commodity boom, giving most of the proceeds back to the mining companies, which are not going to provide the kind of social and economic infrastructure that will sustain this country over the next 30 to 40 years,” he says.

”I despair about what happened with the resource rent tax – that should have been the big nut that was put away and used down the track for when the mines are gone and we’re looking for some way of maintaining activity and infrastructure.”

When the boom inevitably ends, Fraser says a fund could offset some of the economic pain by having ”social and infrastructure projects developed, on the shelf ready to go”.

For others, stability during the cycle should be a key objective of an Australian fund. Mining investment as a share of GDP is already approaching 5 per cent – well above levels reached in the 1960s and 1970s – leaving us more exposed to a sudden slowdown in world demand.

For instance, Chile’s $US22 billion stabilisation fund automatically receives budget surpluses of more than 1 per cent of gross domestic product. When commodities tanked during the global financial crisis, a $US4 billion injection from the fund helped limit the worst of the recession.

Grattan Institute economist Saul Eslake says Australia should also adopt a fund to accumulate large budget surpluses, as the task can’t be left to politicians.

Both the Howard and Rudd governments struggled to justify surpluses of more than 1 per cent of GDP, he says, so they gave the wealth back as unnecessary tax cuts. The budget is forecast to reach a surplus of 1 per cent of GDP by about 2016, he says, and Labor would probably follow the same approach.

”That would be no more appropriate than it was when Howard and Costello and Rudd and Swan did it. It would put upward pressure on inflation and interest rates,” says Eslake, who has been arguing for a fund since 2005.

Besides economists, many non-resources businesses are also keen on a fund to shield them from the ”resources curse”, a hollowing out in other parts of the economy as mining expands its share.

The Australian Industry Group, for instance, is investigating whether a fund can help protect manufacturing exporters from the higher dollar, which erodes export earnings.

AI Group’s public policy director, Peter Burn, points to Norway’s fund, which has a mandate to buy overseas assets with oil revenue as a way of dampening the effect of a soaring exchange rate.

”A sovereign wealth fund financed from the boost in revenue at times of high commodity prices would assist in stabilising the macro economy and, if the fund purchased offshore assets, could also dampen the exchange-rate impacts of booming commodity prices,” Burn says.

Top executives have also weighed into the debate. Chief executives from Commonwealth Bank, ANZ Bank, Tabcorp, Foster’s, CSL and Coca-Cola Amatil and Orica and chairmen from Mirvac, Gloucester Coal and Pacific Brands have also backed a fund with the objective of saving or stabilisation.

The idea is also grabbing attention in Canberra, after the Liberals’ Malcolm Turnbull recently backed calls for a national fund. He thought the stabilisation goal of Chile’s fund was probably appropriate, but said the fund could also earmark funds for ”very long-term savings”.

”All of us know the value of savings targets, whether it is a child’s money box or a family’s super funds,” he said in a speech this month. ”A national savings fund of this kind would become a matter of real national pride, evidence that we have the discipline and vision to recognise that good times don’t last forever, that demographic changes will place greater demands on future budgets and that thrift is both virtuous and prudent.”

Support for a fund is not universal – former Treasury secretary Ken Henry said last year that greater saving and smoothing the boom-bust cycle could be achieved ”within the overall budget strategy”. Free-market think tanks such as the Institute for Public Affairs say the government should return commodity wealth to the people through lower taxes.

But supporters of a fund appear to outnumber the strident opponents.

Reserve Bank governor Glenn Stevens has raised the prospect of a ”stabilisation fund” without supporting the idea, and Treasurer Wayne Swan has not ruled it out.

”If we were in the position of not only coming back to surplus but coming back to a position where we had no debt, then maybe that would be an option,” Swan said in December.

Despite this growing support for a fund, public debate has largely steered clear of how one might be designed.

What type of assets would it hold? How and when would it spend the money? And how to make sure politicians did not raid it, leaving the cupboard bare.

Treasury documents released under freedom of information suggest the government is lukewarm on a Norway-style fund, which invests all of its $US560 billion overseas.

A previously secret Treasury briefing from last year highlighted Australia’s different circumstances, saying: ”Norway has a single finite resource in its interest in North Sea oil. Australia has more diversified and longer-lived resources. So it doesn’t necessarily follow that what is appropriate for Norway should necessarily be followed in Australia.”

Private-sector economists agree an Australian fund would have less need to invest all the assets overseas, as the potential damage from price swings is less here than in Norway. However, a fund could not avoid being a significant investor overseas.

”Australia is a very small part of the global financial market, so inevitably investing overseas is going to be a very important part of the strategy,” says Gordon Clark, an Oxford University professor who specialises in sovereign wealth funds.

”In designing these institutions you have to be very conscious that given the volume of assets, you don’t overwhelm domestic financial markets.”

Whether a fund should deliberately try to restrain the surging dollar to help certain industries, however, is more contentious.

A former deputy governor of the Reserve Bank, Stephen Grenville, has cited sovereign wealth funds as one way of tackling the hollowing out of manufacturing caused by the dollar. Dr Grenville has argued that if this is the goal the investments would indeed have to be in foreign assets.

The Australian Industry Group has also found that Norway’s manufacturers have fared better than others in Europe.

But HSBC’s chief economist, Paul Bloxham, says suggestions that we follow Norway by trying to ”ring fence” commodity earnings are ”radical”.

”We floated the exchange rate in 1983 and we have gradually gotten used to the idea that the Australian dollar is freely floating and quite volatile,” says Bloxham, who supports a fund. ”If you put it outside the rest of the economy, the exchange rate would start to operate in a very different way.”

Fraser also warns against trying to manipulate or manage currencies through a fund. ”The magnitude of any sovereign wealth fund are peanuts to the volumes of money that float around on the foreign exchanges,” he says.

Wherever its assets were held, an Australian fund would be under pressure to adopt a conservative investment strategy, given that key sovereign funds suffered heavily in the global financial crisis.

Singapore’s Temasek fund and Norway’s long-term savings fund – both of which invest heavily in shares – lost more than 20 per cent in 2008. Shorter-term stabilisation funds of Chile and East Timor, which hold mostly bonds, held up positive returns throughout the financial crisis.

How to spend the money is also up for debate, but an early favourite is infrastructure.

ANZ’s chief executive, Mike Smith, echoed the thoughts of many economists when he said funnelling a fund’s earnings into the nation’s creaking infrastructure would be a ”sensible idea”.

The Grattan Institute’s Eslake adds that a fund could support spending on social infrastructure that politicians tend to ignore, such as aged care or indigenous affairs. However, he says that strict rules would be needed to ensure the money was spent at the right time.”You structure it so that the government can access the income produced by this fund but not the capital until such time as when the mining boom is ‘over’,” he says.

Turnbull also concedes that politicians have a ”very strong temptation to splash money around” – often with tax cuts at the peak of the boom, when they are needed least.

Any fund would also need a healthy degree of separation between the fund and the elected government.

According to Oxford’s Professor Clark, the worst performers tend to be those governed by people too close to their political masters.

”You can’t have these entities subject to the flux and flow of federal elections. That’s going to be very, very damaging to any sovereign wealth fund’s capacity to invest for the long term.”

In a sector that is notorious for being opaque, most agree the Future Fund has set the bar high for independence under the outgoing chairman and frequent government critic, David Murray.

Shielding Australia from the commodity bust-and-boom cycle is a worthy goal – most agree on that. Saving more for future generations also has widespread support. Interest rates and budgets will probably remain the main policy ”levers” for these tasks, but there is also growing support for some sort of sovereign fund, as has occurred overseas.

After observing other countries’ experiences, however, a key lesson seems to be that Australia’s situation is distinct, given our wide range of natural resources and their long lifespans.

Eslake says this means we should be flexible in designing a fund that suits us, not simply copying resource-rich countries.

”Although our circumstances are in some ways similar to Chile and Norway, the fund itself is more like the Chinese one,” referring to the $US330 billion China Investment Corporation, which has a wide-ranging portfolio of bonds, shares, and strategic stakes.

For all the interest in a sovereign wealth fund from business leaders, however, they have artfully ignored an elephant in the room.

As Bernie Fraser points out, a government is unlikely to embark on this path until it is confident that it can extract more tax from a booming economy, and last year’s mining tax brawl showed just how hard this is.

”You can’t really talk about company tax reductions and sovereign wealth funds in the same breath, I don’t think,” Fraser says. ”It’s not going to happen if that’s the sort of philosophy or ideology that’s driving the debate.”

Sourced & published by Henry Sapiecha


Monday, April 25th, 2011

China to lead world economy

CHINA is about to overtake the United States as the world’s biggest economy, creating profound changes in the balance of global power.

In forecasts inserted quietly on its website in recent days, the International Monetary Fund has projected that, by 2016, China will overtake the US in real economic output – the first time in the modern era that any country has done so.

Economic historian Angus Maddison estimated that the Soviet Union at its peak produced only a third as many goods and services as the US; Japan’s economy at its peak was still less than half the size of the US economy.

China’s ascension has been startlingly different, in speed and size. If it grows at anything like the 10 per cent rate it has averaged since 1980, its economy will be far bigger than that of the US within a generation.

The China Inventory

Australian National University professor of strategic studies Hugh White said the looming end of US economic dominance marked a turning point for the world, and had serious implications for Australia.

”For us, it is the end of a very long cycle in which both our great allies, first Britain, then the United States, have been the strongest economy in the world and the greatest military power,” Professor White said.

”For the first time, the greatest economic power in the world will not be our close ally.

”One issue is whether we will have to accommodate an ambitious, growing China that behaves reasonably well, or face an aggressive China that operates without such constraints. Another is how the US responds to China’s growing military strength.”

Professor White said that while the US had confronted more-hostile enemies before – Nazi Germany and the Soviet Union – it had never had to contend with a rival that matched it in economic strength.

He said this would pose a ”very tough strategic choice” for Australia as to whether or not to back the US in a conflict.

China’s growth has been unprecedented. In 1980, when its economic reforms were just starting, the IMF estimates the US produced more than 10 times as many goods and services. Even 10 years ago, when China overtook Japan to become the world’s second-biggest economy, the US still produced three times as much.

But since then China’s share of global output has doubled, while that of the US has shrunk rapidly. From 25 per cent of global output in 1986, the US share has shrunk to less than 20 per cent and a projected 17.8 per cent by 2016.

China produced just 2.2 per cent of the world’s output in 1980, but this rose to 7 per cent by 2000, 14 per cent now, and is projected to top 18 per cent by 2016.

By 2016, the IMF estimates, China will be producing more in a fortnight than it did in a year when the reforms began. Over that period, its output would have risen to 30 times its starting level; US output would have risen to 2.7 times its 1980 level.

The US would still be the world’s biggest market. If China keeps its currency heavily undervalued, as it is now, the IMF projects that, in nominal terms, by 2016 the US economy will still be two-thirds larger than China’s.

But this gap would simply reflect currency values. Factor in relative prices, and China’s real output of goods and services would be the world’s biggest.

The IMF assumes that China will grow at 9.5 per cent a year over the coming decade, a tad slower than previously, while US

growth would accelerate from an average of 2.1 per cent over the noughties to 2.75 per cent in the new decade.

Australia is assumed to average growth of 3.25 per cent, and more or less maintain its place in the world economy, which has changed remarkably little over the past century.

On Professor Maddison’s estimates, Australia in 1913 produced 1.02 per cent of the world’s output. On the IMF’s figures, this edged up to 1.34 per cent in 1981, is 1.19 per cent now, and will shrink further to 1.11 per cent by 2016.

This reflects the rapid growth not only of China, but developing countries as a whole. In 1990 they produced just 31 per cent of the world’s output, but by 2010 this had risen to almost 48 per cent, and by 2013 most of the globe’s output would come from low- and middle-income countries.

India’s growth is projected to continue at more than 8 per cent a year. It is on track to overtake Japan next year to become the world’s third-biggest economy in real output.

The relative weight of Japan and the European Union is declining rapidly. On IMF projections, by 2016 Japan would account for just 5 per cent of global output, down from 10 per cent a generation earlier, while China and the US would have overtaken the EU’s output

Sourced & published by Henry Sapiecha


Monday, April 25th, 2011

Meridian Gold produces

80,300 oz of pure gold in quarter

TORONTO, July 6 (Reuters) – Meridian Gold Inc. MNG.TO said on Friday its second-quarter production was 80,300 ounces of gold, as production at the company’s El Penon mine in Chile topped internal projections by 13 percent.

The company, target of a takeover proposal led by Yamana Gold (YRI.TO), also produced 2.3 million ounces of silver and 870 tonnes of zinc, it said.

Meridian’s Rossi/Storm mine in Nevada, a joint venture with Barrick Gold Corp. (ABX.TO), produced its first gold during the quarter, and is on track to start full production in the third quarter, Meridian said.

Sourced & published by Henry Sapiecha


Saturday, April 23rd, 2011

Natures Brands Natural Health & Beauty Products

Workers use fake urine

to pass drug tests

13:00 AEST Thu Apr 21 2011

Fake urine that can pass as the real deal in a drug test is helping WA construction and mining industry workers hide recreational drug use from employers.

Workers at some of Australia’s biggest companies are buying synthetic urine online in a bid to pass random on-site drug tests, industry sources have told ninemsn.

The synthetic products, which include brands such as Quick Fix and UltraKlean, are able to pass drug screening because they contain creatine, or creatinine, a by-product of muscle breakdown found in real urine.

They often come with mini heating devices that enable the user to warm the liquid to body temperature before giving a fake sample.

A WA-based construction company employee told ninemsn he personally knew at least 15 to 20 colleagues in the mining and construction industries who had recently purchased the product online, and at least five who had used it to pass a drug test.
Natures Brands Natural Health & Beauty Products

“I learned about it three and a half years ago, but it has definitely become a lot more popular in the last year or two with the younger crowd,” he said.

He also knew of one former colleague who had used a rubber penis to deliver a fake sample.
“I don’t know anyone who goes to work under the influence of drugs,” the worker told ninemsn.
“The way I see it, what people do on a Saturday night when they’ve got the Sunday off shouldn’t affect their Monday.
“If they want to get on the amphetamines or ecstasy on Saturday night, they can use synthetic urine and if they get tested and they won’t lose their jobs.”
Medical scientist Tyren Edwards, who works in the drug testing unit at Perth lab Western Diagnostic Pathology, told ninemsn synthetic urine could successfully pass a drug test undetected but it was not foolproof.
“Synthetic urine is around but it needs to be within a certain range of pH to be passable,” he said.
Natures Brands Natural Health & Beauty Products

“The (testing) machines do look for creatinine. A fake sample may pass a drug test if the synthetic urine has the correct pH level and contains creatinine, or if a creatinine check is not completed and the sample was not supervised.”
Testing machines may also pick up a fake sample if bleaches or synthetic materials were detected or interfered with pH levels.
“But there may be some products out there which we don’t know about, and they could be right on the money.”
Mr Edwards said Western Diagnostic Pathology closely supervised all drug tests to ensure nobody tried to supply a fake sample.
“We always do our testing under supervision or with CCTV installed,” he said.
“We’re always in the room with them so unless they used a fake penis we would pick it up.”
Fake samples may be prevalent in remote areas where those being tested were allowed more privacy, he said.
Synthetic urine is sold online and in bong stores, such as national retailer Off Ya Tree, for around $70 – $85.
South Australian store Aussie Detox is one of the many companies that sell the product online, but manager Joe Jones insists it is mainly bought for “party pranks”.

Alternative Health Research/Flamasil™

Despite advertising Quick Fix on the Aussie Detox website as “premixed laboratory urine designed to protect your privacy during a urinary drug test (THC, marijuana, cocaine, ecstasy, pollutants)”, Mr Jones said the company did not encourage it to be used for drug testing.

“We wouldn’t want anyone to break the law,” he said.

Off Ya Tree’s WA coordinator did not wish to discuss the product with ninemsn.

The major industry players approached by ninemsn also remained tight-lipped on the details of their drug testing procedures.

A Rio Tinto iron ore spokesman told ninemsn the company did not wish to share details of drug testing procedures, but added “our testing methodologies and practices are consistent with Australian standards”.

Woodside oil and gas company and WA construction giant BGC refused to comment.
Natures Brands Natural Health & Beauty Products

Sourced & published by Henry Sapiecha



Thursday, April 14th, 2011

The World’s largest Container Ship launched

By Mike Hanlon

22:00 June 10, 2006

The World’s largest Container Ship launched

It’s normal for things in the digital realm to get much larger very quickly, but it seems the same thing is happening with container ships, which seem to be more efficient the bigger they get. Samsung Heavy Industries recently launched the World’s largest container ship, breaking its own world record of 9200 teu (a teu is a 20 ft container) which it set less than 12 months ago. The Xin Los Angeles is the new heavyweight champ and carries 9600 teu – equivalent to 1.3 million 29 inch color TVs, or 50 million mobile phones. Whatsmore, the record will almost certainly be broken again in the near future as SHI has developed a 12,000 teu container ship design in co-operation with Lloyd’s Register and is working on a container ship capable of carrying 14,000 teu. To put matters in perspective, SHI built what was then the world’s largest container ship in 1999 – it carried 6,200 teu. This ship is more than three times larger than the Titanic and has a crew of (you’ll never guess) …

How many crew does it take to comfortably man the world’s largest container ship? Thanks to incredibly sophisticated automation, the answer is a staggering 19 men.

The world’s largest container ship, Xin Los Angeles, has been delivered by Samsung Heavy Industries Co Ltd (SHI) to Lloyd’s Register class. The ship is owned by China Shipping Container Lines (CSCL) and is operated by China International Shipmanagement Company Ltd, a joint venture between CSCL and V.Ships.

The ship is 9,600 teu and is the first in a series of eight being built by SHI. The ship will trade from China to Europe initially and will eventually also trade to the US.

Xin Los Angeles can carry a maximum of 18 rows of containers by eight tiers on the weather deck and 16 rows by 10 tiers in the holds.

The principal dimensions of the ship are: • 336.7 metres length overall • 45.6 metres beam • 15.0 metres draught.

The ship is propelled by an MAN B&W 12K98MC-C Mk6, with a power of 68,520 kW. During sea trials the ship achieved a ballast service speed of 25.4 knots.

Xin Los Angeles is unique not only in terms of size, but also in its design aspects. The ship has been assigned Lloyd’s Register’s Environmental Protection Notation, which recognises vessels which exceed current statutory environmental requirements. The ship has a certified ballast water management system and has detailed procedures and systems in place for dealing with refrigerants, garbage and sewage and will also run on low-sulphur fuel. The ship is also enrolled in Lloyd’s Register’s Ship Emergency Response Service (SERS), a naval architectural consultancy service which provides technical support in the event of an incident such as a grounding or collision. As part of SERS, the operator will undergo a set number of ship emergency response exercises during the course of a given calendar year.

Xin Los Angeles has also been assigned Lloyd’s Register’s Crew Accommodation Comfort Notation. This means that the vessel has been designed to mitigate noise and vibration levels. A high specification of noise dampening material has been employed throughout the accommodation, and the vessel has been designed to minimise vibration aspects, by assessing main engine vibration characteristics, propeller design and equipment specification.

“We are very pleased that the close co-operation between the owner’s, the yard’s and our site teams resulted in the successful and timely completion of this highly notable vessel,” says Duncan Duffy, Surveyor in Charge, Lloyd’s Register Koje. “We congratulate both the owner and the yard on this record-breaking achievement.”

“We have an ambitious strategy for building the container ship fleet of the future. We are pushing the size envelope because we believe that future market demand, coupled with the increasing importance of Chinese trade to the world economy requires an innovative, forward-thinking response to ship design and construction. The excellent teamwork between ourselves, SHI and Lloyd’s Register has helped us to achieve our objectives in this respect,” says Xin Yan Lin, Site Manager, China Shipping Group.

Construction also aimed at minimizing the emission of nitrogen oxide by using environment friendly engine. It can also run at a 26&min;note speed by using the engine that is used in 7,000 TEU container ships.

SHI has so far built some 181 container ships, while receiving orders for 33 ships out of the 9,000 TEU plus container ship orders received in the global shipbuilding industry – an approximate 45% market share.

“They key technology in container ship construction is to carry more containers under the same conditions. We have already developed 12,000 TEU container ships, and are trying to get new orders for these ships. At the same time, we will continue to focus on research and development, so as to steadily maintain our number one position in the world shipbuilding industry,” CEO Kim Jing Wan said.

Sourced & published by Henry Sapiecha


Monday, April 4th, 2011



The recovery in markets from recent news driven events has been incredible – in terms of pace and scale. This has certainly lifted sentiment in equity markets and the spill on effect for commodities and currencies as been a benefit.

The US posted strong signs of economic recovery across a variety of indicators last week particularly from unemployment and non-farm payroll.

While the Aussie Dollar has continued to push ahead against the greenback, these ongoing indications plus the potential for a possible rise in US interest rates may well call a halt to that party. As such, some caution should be exercised in this area – although 1.05 remains our short to medium term target, this may not be smooth sailing.

Amongst commodities, the strength most notably in Live Cattle has reflected ongoing strength in demand from Asia – and world food demand in general, while Corn put on serious weight as a result of a major fall in inventory as well as pressure on Bio Fuel demand (Corn is refined into ethanol) stemming from higher oil prices.

In our session this week, we will look at the impact of fuel prices on commodities, and where the opportunity sits within that.


Gold falls as Fed is expected to tighten monetary policy

Is the Fed about to shift monetary policy? Speculation is rising that the Federal Reserve will tighten sooner than expected dampening demand the alternative investments as money flows into U.S. dollars. The improving economy, i.e. the strong jobs numbers last week, encouraged Fed members to signal they probably will not extend bond purchases beyond June this year. The immediate price action of gold on the jobs numbers saw gold fall showing how sensitive gold prices are the economic recovery. As the numbers improve, we hope, the “safe haven” premium will be discounted in the gold price. Unless we see further weak data gold may have put in a major top at current levels.


Crude Oil rallies on U.S. employment gains and Middle East Conflict
Oil rose to $108.00 a barrel after Labor Department figures showed that 216,000 jobs were created in the U.S. last month more than the 190,000 jobs expected. The increase forecasts possible higher demand as we approach the seasonal driving season. Prices were also supported by the continued fighting in Libya as Qaddafi’s forces regain the initiative after two weeks of allied air strikes.

The oil market is highly correlated to the equity markets right now and as equity markets are seen as a measure of economic growth and a barometer of petroleum demand.

Brent crude, the European benchmark, traded at a premium of $10.76 over U.S. futures last week. The spread extended to $19.74 on February 21st on middle eastern unrest. The average spread last year was 0.76 cents.

We remain positive on the near term price outlook for crude as key economies remain on track and tensions in Libya continue to pressure prices.

Corn futures push higher on lower than expected inventories
Inventories of corn slumped to a 4-year low in the U.S. according to the United States Department of Agriculture. Stockpiles of corn declined 15% year on year as demand for animal feed, fuel and food climbed. Corn rose limit up for 2 days as the market adjusted to the surprising lack of corn stocks and improving export demand. Farmers are expected to plant a record number of corn acres this year and still not improve ending stocks as demand grows.

Cotton farmers are also expected to plant a record number of acres this year as all-time high prices create a supply response.

All corn and cotton acres will be at the expense of soybeans and if the acreage numbers are confirmed during planting season we expect to see soybean prices respond to the upside

Received & published by Henry Sapiecha