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Thanks to gCaptain for his post of it.
Swifter, higher and stronger may be the Olympics motto. But the Beijing Games that start on Friday have had the opposite effect on ships carrying men and materials across the planet. After a year of dizzying traffic, global sea lanes have suddenly become quiet. And that’s great news. ET helps you join the dots between the world’s biggest sports fest and the cash you will save importing everything from coal and vegetable oil or exporting Christmas goodies to the US. China will effectively shut down while the Games are on. All factories, workshops, and industrial estates in and around Beijing province will be closed to ensure tourists and deadly serious sportspeople don’t get a whiff of smoke, see ugly machinery or the usual detritus of a country that has become the world’s factory yard.
Since Chinese factories will be shut, they would not need copious volumes of raw material, nor have giant ship-loads of finished goods to move out. Moreover, China had been stockpiling diesel and crude oil before the Games to ensure uninterrupted supplies. That record demand for tankers to carry crude is expected to drop 40% once the Games start. So basically, China needs very few ships right now. That has acted as a sledge hammer on ship freight rates.
As in all market shifts, what you see is usually tip of the iceberg. The Olympics shut-down is actually just one in a set of far more complicated factors. China is expected to reap a very large soyabean crop. This means the world’s top bean importer will need fewer ships to move cargo from South America.
For the last couple of years China appeared to have an insatiable appetite for metals and ores as it built state-of-the-art stadii, apartments, roads, bridges and other jaw-dropping infrastructure. Not any more. The big state-sponsored construction boom is over, at least for now.
China’s partial exit has played havoc with global demand for copper, tin, lead, and iron ore. In addition, production costs (iron ore, coking coal, credit issues) and coke shortages are making it harder for small Chinese steel mills to keep up production.
The trouble is that not only did China reduce shopping overseas, it also closed its own sales counters. From fertilisers, wheat, corn, to aluminium , steel and zinc, Chinese bulk commodity exports have become next to nil. Reports suggest that some importers, who booked copper shipments to arrive in July and August, have been trying to cancel and/or delay the shipments. China’s refined copper imports and semifinished products are down almost 13% against the first six months of 2007.
While the Chinese are booking fewer ships, bunker fuel has also become cheaper in the last few days. That has cooled down spot freight rates further. But the big question is how long can the good times last? For quite some months actually. Freight brokers say prices are getting lower, with rates quoted for the coming quarters much lower than near month prices.
Panamaxes that were ruling at $66,000/day at July-end are now at $58,000. The average August-September rates are $60,000. For the fourth quarter, the average rate is $66,000. But it is rapidly falling. For the first quarter of next year, rates are ruling at $62,000 and for second quarter at $60,000. Industry watchers say freight rates are tumbling also because of the general correction in global commodity prices. Since the heat has cooled down substantially, freight is following suit.
Moreover, shipbuilders from China to the Middle East have been in a frenzy of activity over the last 18 months to encash the boom in global trade. So a large number of new ships are expected to hit the maritime traffic lanes in 2009, helping supply catch up with demand.
Even so, in freight rates timing is everything. “Currently, supply still outweighs demand. Charterers are taking their time. But if cargoes all rush in at the same time, it could stop rates from declining further. And the longer the charterers wait, the chances of everyone rushing in at the same time increases,’’ says a broker in Mumbai. So while you are busy with the Olympics, don’t take eyes off the ball.
Filed under: Marin, Railroad, SMART, Sonoma | Tags: high speed rail, maglev
Some SMART opponents say don’t vote for SMART because it isn’t Maglev, and voting for SMART might preclude Maglev and I will include high speed rail.
The problem here is nothing else is studied, and high speed rail costs much more than SMART. It takes a long time to do the studies, get public input, revise, put on ballot, do construction, wait for rails cars that are in high demand, etc. Remember the old saying, tomorrow never comes. Keep waiting for the ideal whatever, all you will have done is gotten older, and materials have gotten more expensive.
SMART is a 70 mile commuter rail using existing railroad right of way. SMART owns this right of way, not the NCRA. SMART trains have the priority, not freight. $540 million is the upfront costs. This cost is something people complain about.
One person said they won’t support it because it isn’t Maglev. The Shangi Maglev is 19 miles long and cost 1.33 billion US dollars. That is 70 million a mile. At that per mile cost, SMART would have an upfront cost of 4.9 billion dollars. Yet it still would not connect to San Francisco, Oakland, BART, etc. Another thing is it would still be a train to nowhere, it can’t use the existing tracks, it’s trains can’t use the BART system, and would not be able to use California’s high speed train network. After all these years it is still in development. This is the highest speed possible on railroads. However at these high speeds, Maglev is 5db louder than conventional trains. One nice thing is there is no overhead electrical line needed to supply the train, and thus wear out.
High Speed Rail:
The reason it can’t connect to California’s high speed network, is because the California high speed rail network is using conventional high speed trains. Think Amtrak high speed trains on the East coast, Germany, South Korea which I’ve been on the last two. The nice thing besides being a part of the CA hish speed rail network, is you can use the same stations at commuter rail. Saving space in cities. However you have to go slower at these stations, and shared rail. Talking with Mehdi Morshed, Executive Director of the CA High Speed network this past Friday, several things came to point. One is figure 50 million a mile for high speed rail. Again to make SMART a high speed rail, 3.5 billion in upfront costs. Two, when pressed about putting in High Speed rail on Marin, Sonoma counties, he could only say he couldn’t predict the future, twenty or thirty years down the line. So no studies, and no plans within twenty or thirty years? Three, wanting to put in high speed rail, instead of commuter rail, is to paraphrase him, wanting to use a Ferrari when you need to use a bus. Four, he said, “They need commuter rail.”
The problem with both is while it is nice to have the right of way, unaffected by traffic, and vice versa is cost, materials, and energy to build such structures. The higher speed you want to go, the more perfect the track and right of way must be, plus the changes in elevation, and curvature must be smaller. Think bigger more imposing structures, or more overpasses for everything else. Typically concrete must be used a lot. This poses two problems, at least. Where does the material come from? Island Mountain would be a good place, but people don’t want to hear that. The other is concrete has a high embodied energy. If we are to reduce our energy usage, we must reduce our energy usage in all things. Then where do we put this super perfect right of way? Who would give up their land? It takes time to build up speed, for two reasons, one is the rate of speed change the motor(etc) can handle, the other is the rate of speed change people an handle. The average person can’t handle a great deal of speed change(g’s). This means the stops have to be infrequent, and a good distance between each other.
