Shipping Slowdown

Bloomberg: Oil Price Risks Force Maersk to Plan Deeper Cost Cuts, CEO Says
Maersk Oil, which has its main operations in the North Sea and Qatar, raised its full-year forecast and now sees the unit breaking even, compared with a forecast for a 2016 loss in February. The unit can now break even with oil at $40 to $45. It previously said oil needed to trade at about $45 to $55 in order to avoid a loss.

The division cut costs by 21 percent in the first quarter, a higher rate than the 20 percent it targets for end-2016 when comparing with 2014 levels. That means cuts will probably end up deeper than initially planned, the CEO said. Those measures helped Maersk deliver a bigger profit than analysts expected, driving its shares up as much as 6.7 percent on Wednesday.
“We’re happy we’ve reached the goal we set,” Andersen said. “We will definitely work on cutting costs even further.”
SA: AP Moeller - Maersk's (AMKAF) CEO Nils Andersen on Q1 2016 Results - Earnings Call Transcript
Going through the underlying profit by activity, it's the main impact on profit or the drop in profit comes from Maersk Line, dropping from $700 million to zero basically or breakeven; and Maersk Oil going down from $200 million to a slightly negative result. Actually, better than we expected for Maersk Oil. APM Terminals down on the -- and I'll come back to that, of course. But background is a continued deterioration in the oil exporting markets. They own most of them, have no money for imports, so you see massive trade impacts in those countries. APM Shipping Services, in line with last year when you take into account that Maersk Supply Service is impacted by the ordering situation.
South Korea's Hyundai Heavy Industries Co Ltd, the world's biggest shipbuilder by revenue, will slash more jobs and sell non-core assets as part of efforts to cope with shrinking orders, it said on Monday.

The South Korean government has urged ailing industries to speed up restructuring efforts to help revive Asia's fourth-biggest economy. Companies such as Daewoo Shipbuilding & Marine Engineering and the country's No. 1 shipping company Hanjin Shipping have already had to undergo debt restructuring with creditors due to a severe downturn in their respective industries.
Fast FT: China’s Cosco hit by slowdown in global trade
State-controlled Chinese shipping company Cosco slipped into the red in the first quarter, hit, like many shipping companies, by the slowdown in global trade.

...The company said it “expects these difficult and challenging business and operating conditions to persist and even worsen. As such, 2016 will be another very difficult and challenging year for the group”.
Hellenic Shipping News: Scanty Ordering Bodes Well for Tanker Shipping
“The tanker market is expected to be oversupplied in the next two years due to hefty deliveries and relatively slow growth in the crude oil trade. If the slowdown in ordering continues further it will keep fleet growth in check in the later years, which in turn will support tonnage utilisation in the tanker market”, added Verma.
Source: Drewry Maritime Research

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