Vale says China row over, able to dock at five ports

Vale says China row over, able to dock at five ports

Dalian: One of dry bulk’s longest running and most discussed disputes is over. Brazilian miner Vale’s slew of giant 400,000 dwt bulkers are able to call in China – their three-year ban has been annulled. The so called valemaxes have been able to call at five different Chinese ports so far in the wake of the ban being lifted.

Sainty Marine faces debt collection risk

Sainty Marine faces debt collection risk Shanghai: Sainty Marine has announced that it is facing the risk of being unable to collect RMB182m from debtor companies, which might have a big impact on the company’s 2014 annual results. Sainty Marine commissioned Nantong M...

China Shipping Development to scrap 23 vessels

China Shipping Development to scrap 23 vesselsShanghai: China Shipping Development has announced that the company has approved to dispose of 23 bulk carriers ahead of time in order to further optimize the company’s fleet structure. The average age of the 23 bulkers is 22.5...

Chinese finance floods container orderbook for foreign lines

Chinese finance floods container orderbook for foreign linesShanghai: Finance from Chinese institutions accounts for 61% (0.51m TEU) of capacity in the Chinese-owned containership orderbook, most of which are ultra-large container vessels (ULCVs), according to research from shipbroker Clarks...

China Power Construction teams up with Furgo on wind power development

China Power Construction teams up with Furgo on wind power developmentShanghai: China Power Construction Corporation has signed a strategic agreement with Dutch company Furgo, the world’s largest integrator of geotechnical, survey, subsea and geosciences services, to jointly develop wind power busin...

Xiazhiyuan Ship Management boss flees China

Xiazhiyuan Ship Management boss flees ChinaShanghai: The boss of Zhejiang Xiazhiyuan Ship Management, Xia Hanren, has fled China to escape from mounting debts at the firm, Zhoushan local media has reported. According to the report, Xiazhiyuan has outstanding debt of aroun...

Beijing wades into Piraeus port row

Beijing wades into Piraeus port row Beijing: The Ministry of Foreign Affairs in Beijing has responded to news that Greece's new government is halting the privatisation of Piraeus port, a key investment by Chinese state run shipping conglomerate, Cosco.

Evergreen charters 11 ultra-large containerships

Evergreen charters 11 ultra-large containershipsShanghai: Evergreen Group has agreed to charter eleven 18,000-teu containerships from Japan-based shipowner Shoei Kisen Kaisha. The charter agreement was signed between the two companies today, and includes the six 18,000-teu uni...

Cosco’s acquisition of stake in Piraeus Port Authority halted

Cosco’s acquisition of stake in Piraeus Port Authority haltedShanghai: Greece’s newly elected prime minister Alexis Tsipras has halted the privatisation of Piraeus Port. China’s Cosco Group was among four international companies bidding on a 67% stake in Piraeus Port Authority.

Sinotrans Shipping eyes more new vessels

Sinotrans Shipping eyes more new vesselsHong Kong: Hong Kong-listed Sinotrans Shipping is going to acquire more ship assets in 2015 to continue its fleet optimization plan, according to Li Zhen, president of the company. Li said the company will target newbuilds in the...

China-Myanmar crude oil pipeline launches

China-Myanmar crude oil pipeline launchesBeijing: The giant oil pipeline from Myanmar to China started trial operations on Wednesday. The 771 km pipeline will connect China with a deepwater port in western Myanmar and reduce China's dependence on oil transported through th...

DSIC completes Daeyang Shipyard takeover

Dalian: Dalian Shipbuilding Industry Corporation (DSIC), an affiliate yard of state run shipbuilding conglomerate CSIC, has completed the acquisition of 100% equity shares in bankrupt Dalian Daeyang Shipyard, the subsidiary of Korean shipping company...

New river vessel regulation released

Beijing: The Ministry of Transport has officially released a new regulation on the standardization of inland river vessels in order to tighten control of the inland shipping market and optimize the inland shipping fleet. The regulation will be eff...

Wisdom Marine closes in on 100 ships

Taipei: Taiwan’s bulker owner Wisdom Marine has announced that the company has added one more bulk carrier, and expects to have a fleet of 100 vessels by the first quarter of this year. The newest bulk carrier was delivered to the company’s su...

Jiujiang port adds new terminal

Shanghai: The port of Jiujiang is to add a bulk terminal.The new terminal, located at the Hukou port area of Jiujiang, has cost RMB117m to build. The bulk terminal consists of two 5,000 bulk berths with a designed annual handling capacity of 1.7m to...

TCC celebrates Japanese ties

Hong Kong: One of the grand names of Hong Kong shipping, Tai Chong Cheang Steamship (TCC Group) has recently held celebrations in Tokyo to mark 60 years of business with Japanese partners, a stream of business TCC chairman Kenneth Koo is determined t...

China-led investors subscribe to new JES International shares

Shanghai: JES International Holdings, parent company of five China-based shipyards and engineering companies, has placed out 183m new ordinary shares to two new subscribers, including one Chinese national. The new share subscription will add a tot...

Sino-Global moves into tanker ownership

Hong Kong: Nasdaq listed Sino-Global Shipping America has moved into tanker ownership through an acquisition of a second-hand tanker. The company announced that it has signed an MOU with Rong Yao International Shipping to acquire a 13,900dwt tanke...

Financial support fixed for white list yards

Beijing: The financial supporting guidance related to the shipbuilding companies on Beijing’s approved white list will be released by the State Council soon. The financial guidance has been drafted by the People’s Bank of China.

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In Focus

Cheaper oil puts brakes on OSVs

Kohe Hasan from law firm Oon & Bazul on the offshore outlook for 2015

Cheaper oil puts brakes on OSVs

The offshore supply vessel (OSV) industry has seen significant growth in recent years. However, the steep fall in oil prices of late could put a spanner in the works for the OSV industry.

At present, global oil prices are in the middle of one of its steepest selloffs since the financial crisis of 2008/2009.  World oil prices, which were hovering in the region of $110 per barrel from January 2010 until mid-2014, have taken a nose dive since June, more than halving in the past six months.

Whilst the decline in oil prices is likely to be a boon for consumers, the same cannot be said for the OSV industry. This is because oil majors are likely to cancel or delay their drilling operations and big-ticket production projects which are predicated on high oil prices. Evidence of this can already be seen in the recent announcement by ConocoPhillips that it would be cutting investment spending in 2015 by 20%.

The potential reduction in drilling operations and production projects would be of particular significance to OSV operators (both owners and charterers). This is so as drilling operations are a key driver in the demand for the use of OSVs such as platform supply and anchor handling tug vessels. OSV operators are therefore expected to experience a fall in the demand for OSVs.

One possible repercussion of the fall in the prices of oil and the expected fall in demand for OSVs is that charterers may seek to discharge themselves from charterparties which they had concluded prior to this decline. Such a trend was seen from the collapse of the freight market in 2008 which saw many charterers in the dry bulk industry attempt to discharge themselves from unprofitable charters. Similarly, this trend is likely to be seen in the context of the OSV industry as charterers would find that their charterparties have become significantly less profitable if the OSVs are unutilised as a result of the fall in demand. The need to discharge  ...   More>>