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Steel mills and utility firms move to own ships amid record charter rates

Steel mills and utility firms move to own ships amid record charter rates

Beijing: Chinese steel makers and electricity firms are paying high prices for ageing bulk carriers ready for immediate use, in desperate attempts to control soaring transport costs, industry executives told Reuters.
"In the past one or two months, Chinese steel mills and the Koreans have begun buying ships," said an official from a ship broker. "I'm surprised. They are desperate."
Another official said Rizhou Iron and Steel Co Ltd, based in the northern province of Shandong, home to China's biggest iron ore port, bought a 12-year-old Panamax-sized ship for a staggering $68 million -- an amount that could almost finance two new ships if ordered in China, although they would not arrive before 2010.
Asked about the purchase, a Rizhou Steel vice president said: "Yes, do you have any ships to sell?"
A new capesize vessel, to be completed in May, fetched a record price of $148 million last month, up from below $100 million at the start of the year.
"It's not only steel mills. Power stations are also buying ships. They've got to get lots of coal from the north to the south," said a senior official from a major Chinese shipowner, adding one company in the south had bought four ships in October. [2/11/07]

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