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To: russwinter who wrote (5177)	1/15/2004 8:28:50 PM
From: mishedlo	Respond to of 110194

From Harmy on Shipping Rates Mish/Eric Here's an excerpt from an article I found on Google. Don't expect increased shipping capacity to lower trans-Pacific rates. Four carriers are adding capacity on May 1, but demand is so strong that carriers are not backing off major rate increases scheduled for May 1 by the Transpacific Stabilization Agreement (TSA), which includes most lines in the eastbound Pacific. Rate hikes of $900 per 40-foot container--a 30%-40% increase--are proposed on shipments to West Coast; rates for shipments to eastern half of U.S. are scheduled to rise $1,000. TSA members also plan to add $300 surcharge for shipments during peak shipping season, June 1-Nov. 30 It tends to support my view that shipping rates will increase globally because of the pressure imports into China are causing to shipping generally. One interesting little snippet is the reference to the Transpacific Stabilization Agreement. Years ago I worked for a UK group called the "Outward Conference" which was a group of UK shippers who worked the Oz/NZ routes. What this was by any other name was a cartel of price fixers. I must admit to being surprised that such organisations still exist today but I guess if you've got a good thing going why change it. Something else to give you a handle on the size of the problem is that (assuming a 150k ton load per cape carrier) it will take more than 30 trips per carrier to move five millions tons of bulk commodity (coal etc). The tonnages pouring into the Asian are simply growing exponentially dwarfing anything seen in the past. Look at these predictions from Global Sources - and remember the clown who predicted a fall-off of Asian exports of 70% ?? - and also remember that this is just one shipper. SURGING oil and coal imports have led China Shipping Development to unveil ambitious plans to expand its tanker and dry cargo fleet by "200% by the end of 2010". The move will require total capital expenditure of more than Yuan20bn ($2.42bn) over the next seven years, said China Shipping Development company secretary Yao Qiaohong. <snip> The firm, the second largest shipping company in China, has a fleet that comprises 161 ships totalling 4.5m dwt. These include 79 tankers totalling 2.12m dwt and 68 cargo ships with a combined tonnage of 2.21m dwt. The growth plans are considerably more ambitious than those outlined last August by China Shipping Development president Li Kelin who said Yuan3.8bn would be spent buying 19 ships by 2005. The vessels comprised 11 oil tankers and eight bulk carriers to boost its total capacity by 37%, or 1.6m dwt. <snip> The new expansion plans follows an assessment of the company and its markets by SSY Consultancy and Research and Chinese analyst. SSY forecast the import of crude oil would double by 2010 to 167m tonnes, while the importation of oil products would surge to 70m tonnes in the same period. <snip> SSY predicted there would be a similar surge in dry bulk imports. The consultants said cargoes such as coal and iron ore would climb by between 75% and 80% in the seven years to 2010. This would be partly fuelled by the addition of 45m kw of installed power generating capacity along China's coastal strip by 2010 that would increase coal imports by 74m tonnes. There are some interesting figures here. Note the increase in imports of oil and oil products. Big figures for oil and a big increase in shipping required to move it. Look also at the increase in coal imports - 74m tons !! Clearly this is no flash in the pan increase in imports - these guys are planning for the long term. Regards Harmy

To: russwinter who wrote (5177)	1/15/2004 8:33:55 PM
From: mishedlo	Read Replies (1) \| Respond to of 110194

Russ this whole FN mess is gonna blow up sky high over trade wars or currency wars. ======================================================= The United States said on Thursday it would fight efforts by the European Union and other major U.S. trading partners to slap sanctions on U.S. exports potentially worth hundreds of millions of dollars. The new move to seek sanctions by the EU, Canada, Japan, India, Brazil, Mexico, Chile and South Korea was aimed at a controversial U.S. trade law -- known as the Byrd amendment -- which the World Trade Organization declared illegal one year ago. The United States missed a Dec. 27 deadline to repeal the law or face possible retaliation. U.S. trade officials said they would continue urging Congress to take the measure off the books, while fighting the sanctions threat at the WTO. The spat is the latest in a series of disputes involving the government of U.S. President George W. Bush, an avowed free trader who critics accuse of being reluctant to bow to WTO rules when they go against the United States. In the case of the Byrd amendment, Bush proposed repealing the provision last year, saying revenues it generated could be put to better use. But he ran into strong opposition from both Republican and Democrats in Congress, who said the WTO overstepped its authority in striking down the measure. The provision was signed into law by former President Bill Clinton as part of a 2000 budget year spending bill. It changed how funds raised by anti-dumping duties on allegedly unfair imports are distributed. Previously those duties went into the general U.S. Treasury. But since 2001, the funds have been distributed to companies that brought anti-dumping cases. Over the past three years, the United States has paid $710 million to U.S. ball bearing, steel, candle, pasta, seafood and other companies under the measure, named for Sen. Robert Byrd, a West Virginia Democrat who helped it become law. In future years, American lumber companies could receive billions of dollars annually under the program if disputed U.S. anti-dumping duties on Canadian wood are included. BYRD AMENDMENT "The Byrd amendment has raised widespread concerns ... as evidenced by the large number of complainants in this case," European Trade Commissioner Pascal Lamy said in statement announcing the EU's plan to seek retaliation. "I hope the U.S. will now take action to remove this measure, thus avoiding the risk of sanctions, he added. But even critics of the Byrd amendment said the EU and other trading partners might have a tough time persuading the WTO to approve substantial sanctions in the dispute. "I don't think they're going to get a big enough number from the arbitrator to make the administration and the Congress jump," said Daniel Ikenson, a Cato Institute trade policy analyst who has urged the provision be repealed. The retaliation request will be heard by the WTO's disputes settlement body at a special session called for Jan. 26. EU and other officials have stressed that having the go-ahead does not mean sanctions will be immediately enforced. As yet, the EU and its allies have put no figure on the sanctions sought. But they said it should be in line with sums handed out by Washington to local firms. Congressional supporters said the WTO should approve only a very low level of retaliation, if any at all. They argued the EU and other trading partners would be hard pressed to show they have lost any trade because of the Byrd amendment. And unless they can prove that, they are not entitled to retaliation under WTO rules -- even if the Byrd amendment is illegal, congressional aides said. John Veroneau, general counsel for the U.S. Trade Representative's office, echoed that sentiment in a statement announcing the United States would fight the sanctions move. "The retaliation being sought by the other complaining parties does not appear to be based on actual harm to their exports," Veroneau said.

To: russwinter who wrote (5177)	1/15/2004 10:49:45 PM
From: ild	Read Replies (1) \| Respond to of 110194

Guest Commentary, by Jim Bradley Supply Siders -- You've got it twisted around! January 15, 2004 prudentbear.com

To: russwinter who wrote (5177)	1/15/2004 11:09:54 PM
From: ild	Respond to of 110194

China's Car Sales Rose 75% in 2003 By JANE LANHEE LEE DOW JONES NEWSWIRES SHANGHAI -- Aggressive price cuts and new-model launches helped China's car sales zoom ahead by more than 75% last year, and many in the industry expect another strong year ahead. The China Association of Automobile Manufacturers Thursday said a record 1.97 million locally made passenger cars were sold last year. The steep rise followed a more than 50% jump during 2002, a growth rate that some car makers early last year had said would be hard to surpass. Counting the sales of imported cars, analysts said China exceeded the two million mark for passenger-car sales during 2003. Sales of all types of locally made vehicles climbed 34% last year to 4.39 million, an association official said. While few expect a repeat of 2003's performance, consultants and auto-industry officials are forecasting growth this year ranging from 25% to 50%. Sales could get an added boost from auto financing, which auto makers are expected to start offering during the second half. "Given the culture of Chinese people who like to use their vehicles to show their wealth ... those who don't own a car yet are under peer pressure to buy," said Jian Sun, a principal at A.T. Kearney in Shanghai. "A lot of people who weren't originally even thinking of owning a car now are getting drivers licenses and seriously considering buying a car. That kind of momentum is still building up, and we don't see the peak yet." Mr. Sun expects three million passenger cars to be sold this year, compared with the 2.5 million to 2.62 million forecast by the auto association this week. According to the auto association, China set a record during December for monthly passenger-car sales, selling 227,348 locally made cars, more than double sales a year earlier. Total vehicle sales last month rose 58% from a year earlier to 456,451 units, it said. But China's auto industry will face increasing competition as local and global car makers continue pouring billions of dollars into expanding production in China. Signs of oversupply are starting to appear in this booming market, with the inventory of older models building up and a reliance on price cuts to unload them eroding margins. With car sales at record levels, the demand for much of the material used to make them has been climbing, pushing up prices for commodities such as steel and aluminum in the international market. Important to survival, said Mr. Sun at A.T. Kearney, is to launch new models to avoid getting caught in price wars. "The artificially high margin paradise is going to be over," he said. Mr. Sun is forecasting an average 8%-to-10% price cut this year, similar to last year's price reductions. The biggest price cuts are likely to come on midrange to high-end cars, said Geoff Liu, a Beijing-based analyst at Automotive Resources Asia, an auto-industry-consulting firm. "The low-end cars are already cheaper than the international market prices, so I don't expect to see any drastic cuts there," he said. The most aggressive cuts last year came on midrange vehicles, according to Automotive Resources Asia. DaimlerChrysler AG's Beijing Jeep venture slashed the price on one version of its Cherokee model by 29%. Honda Motor Co. reduced the price of its Accord 2.4L by 13%, while Volkswagen AG came down 8% on the price of a standard Santana. Mr. Sun said that as the auto market grows, the demand for low-end cars also will increase, boosting the sales of local companies able to produce the cheaper models and giving them a base to compete with foreign auto makers. "Local companies will continue to be formidable players, and multinational auto companies shouldn't underestimate them and repeat the same mistake global manufacturers of home appliances or mobile phones made," he said. online.wsj.com