Samsung Heavy leads drop in Korean yards on ship price concerns

(Bloomberg) — Samsung Heavy Industries Co., the world's second-largest shipbuilder, led declines among South Korean shipyards in Seoul trading after prices of vessels fell for the second straight week.

Samsung Heavy dropped as much as 11 percent to 18,500 won, the lowest price in 30 months.

Hyundai Heavy Industries Co., the world's largest shipbuilder, fell as much as 11 percent to 148,000 won, the lowest in 20 months.

The weekly Clarkson Index, a measure of prices for all types of vessels, dropped for a second week on October 17, led by waning demand for bulk carriers and container vessels.

Shipowners are ordering fewer vessels this year as the global financial crisis dries up funds and reduces trade worldwide.

"Investors are getting worried the boom times for shipbuilding is over, more so with the financial crisis," said Lee Jae Kyu, an analyst at Mirae Asset Securities Co. in Seoul.

Daewoo Shipbuilding & Marine Engineering Co., the world's third-largest shipyard, fell as much as 7.9 percent to 14,000 won. Hyundai Mipo Dockyard Co., a unit of Hyundai Heavy, dropped as much as 9.6 percent to 98,500 won.

Seven arrested in UK cruise ship bust

LONDON (AP) — British customs and border agents say they arrested seven people and seized 66 pounds of cocaine in a raid on a cruise ship.

Enforcement agents swooped on the P&O ship Arcadia in Southampton on Sunday. The agency said Monday that four of those arrested had the cocaine strapped to their bodies, and added that none of those arrested was a crew member.

The suspects were being questioned but none were charged immediately. The Revenue and Customs agency estimates the cocaine had a street value of £ 1.2 million (US$2.1 million).

Shipping rates may rebound after plunging to cost, Noble says

(Bloomberg) — Commodity shipping may rebound from record declines because rates are too low to pay crew and other running costs, Noble Energy Inc. said.

An unidentified ship operator offered to lease a so-called capesize vessel to Noble for $5,000 a day yesterday, Andrew Bingham, a senior vice president with Noble Europe, told a Coaltrans conference in Prague. That's a shortfall of about $1,000 a day compared with costs for crews, maintenance, insurance and lubricants.

"When you have vessels offered at cost one would argue there's very limited downside" for shipping rates, Bingham said.

The Baltic Dry Index, a measure of shipping costs for commodities, has declined 89 percent from a record on May 20 on weakening Chinese demand for iron ore and a money-market freeze that curtailed traders' ability to purchase cargoes on credit.

The index had its biggest daily, weekly, monthly and quarterly drops during the three months to Sept. 30 and rose only one day this month.

Daily operating expenses are about $6,000 for a capesize, according to Henrik With, a shipping analyst at DnB NOR Markets ASA in Oslo. Anders Karlsen, an analyst at Nordea Securities in the same city, said operating expenses usually range from $5,500 a day to $7,000 a day.

The daily cost of hiring a capesize has plunged 96 percent to $9,359 since it reached a record $233,988 on June 5.

Suriname frees seized Guyanese sugar cargo boat

GEORGETOWN (Reuters) — Suriname's military released a Guyanese sugar boat it seized last week, the boat's owner said, lowering tension between the South American neighbours in a border dispute that includes an oil basin.

Boat owner Kampta Persaud told Reuters the craft, which was seized in the Corentyne river between the two countries, was set to leave Suriname's Nickerie port later on Thursday to pick up a load of bulk sugar for export.

Guyana's President Bharrat Jagdeo said his country sent a strong diplomatic memorandum to Suriname saying "how concerned we are about this latest aggressive act," and adding: "We will take all steps necessary to protect Guyanese interests."

The United Nations ruled in favour of Guyana last year to set a border in a century-old dispute that includes the river and an oil basin off the northeast coast of South America.

The incident is reminiscent of how Surinamese gunboats in 2000 expelled a Canadian company from an offshore oil concession in disputed waters, prompting a freeze on exploration. Oil activity has resumed in recent weeks in Guyana due to last year's ruling.