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Mitsubishi Heavy's operating profit grows 10% this year due to robust defence demand
After its earnings for fiscal 2024-25 fell short of analyst expectations, Japan's Mitsubishi Heavy Industries projected on Friday a 9.6% increase in operating profit in this year due to robust demand in the defence sector. This projection does not include any impact from U.S. Tariffs. The company is expecting an operating profit of 420 bn yen (2.9 billion dollars) for the current fiscal year up to March 2026. This follows a profit of 383.2 bn yen in the business year just ended, which was a growth by 35.6%. It said that the operating profit for the current year would be 40% higher in the aerospace and defense segment, while the one in energy systems (including power generation equipment such as turbines) would be 17% higher. MHI stated in a presentation that the forecast does not include any upside or downside risks from U.S. Tariff Policy Impact. The total revenue for 2024-25 was 5.02 trillion yen. This is slightly higher than the average analyst estimate based on the data compiled and analyzed by LSEG. However, the pretax profit came in at 374.5 billion yen. This is below the consensus estimate of 401.6 billion yen.
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Sources say that the US Virgin Islands is considering a new registry for ships.
Four sources with knowledge of the matter say that President Donald Trump’s administration is evaluating a proposal for the creation of an international shipping registry on the U.S. Virgin Islands, as part efforts to expand the small commercial shipping fleet flying under the American flag. The Trump administration believes that increasing the number of U.S. flagged vessels will help the U.S. Commercial Shipping Fleet to better support the military during wartime and reduce Washington's dependency on foreign ships for transporting supplies and equipment along sea routes. The U.S. flag fleet is currently around 187 ships, and only 80 of them are involved in international commerce. According to estimates from the industry and U.S. legislators, China controls at least 5,500 vessels. Since decades, the U.S. Flag Registry has had difficulty attracting ship owners due to higher costs and a heavier tax burden. There are also multiple requirements like having an American crew. A congressional report last year showed that China had 230 times the shipbuilding capacity of the U.S. According to Eric Dawicki of the Center for Ocean Policy and Economics, which made the proposal, using the U.S. Virgin Islands could be the best way to "strengthen American naval posture", because the island territory would provide a U.S. controlled flag without the expensive restrictions that come with a U.S. straight flag registration. To comply with safety and environment rules, all commercial ships are required to be registered or flagged with a specific country or jurisdiction. Uncertainty about the status of the proposal was expressed by a U.S. official who said that the proposal has been sent to the National Security Council. A second U.S. official confirmed the proposal was known to the National Security Council. Officials from the White House and USVI did not respond when asked for comments. In past conflicts, like the 1991 Gulf War the U.S. relied on foreign-flagged ships to boost shipping access. "The continued reliance on voluntary chartered arrangements with foreign flagged vessels to supplement America’s sealift capability poses a vulnerability for U.S. Maritime interests," said COPE’s Dawicki. A U.S. marine industry veteran, Dawicki co-founded Dominica flag registry. Some lawmakers are in favor of the idea, but unions and those who want to see a resurgence in shipbuilding at home will likely oppose the proposal. Salvatore Mercogliano is adjunct professor and associate professor of history, at North Carolina Campbell University, at the U.S. Merchant Marine Academy. FLAG OF THE NATIONAL A century-old law called the Jones Act governs most U.S. flagged ships. This law stipulates that U.S. flagged vessels must be constructed in the U.S.A., have a U.S. crew and be owned or controlled by an American. These requirements were intended to assist U.S. shipowners, but ultimately they limited the growth of the U.S. Fleet, said Basil Karatzas. He is a consultant with Karatzas Marine Advisors & Co., a shipping specialist based in America. As a national flag it cannot compete with the labor of foreign nationals on price. According to COPE, unlike the U.S. flag, which is vetted and regulated by the U.S. Coast Guard. The USVI authority will administer and regulate a registry international that imposes fewer restrictions. It said that the vessels could, for instance, be built abroad and crewed with non-U.S. citizens. Requests for comment from the U.S. Coast Guard or union officials were not answered. During World War II the U.S. Merchant Marine, a civilian organisation of the commercial fleet, played a crucial role in the defeat of the Axis power, with more than 10,000 ocean-going ships involved in operations. Separate U.S. statistics showed that the U.S. fleet currently represents less than 1% of shipping value in the world. COPE stated that the idea of creating an international flag for the USVI first came up in 2022, but was never presented to the former administration under Joe Biden. Trump's administration wants to revive the U.S. shipbuilding industry and attract more ships under the U.S. Flag Registry. According to U.S. legislators, there are only 20 shipyards left in the United States. Many of them are old and need major investments. There were over 80 shipyards at the end World War II. The SHIPS for America Bill was introduced by members of the U.S. Congress from both parties on April 30. This bill aims to bolster the maritime industry in the United States and ensure consistent funding. Dawicki stated that a USVI Registry would complement the SHIPS Act "without affecting the cabotage (coast-to-coast shipping) or the Jones Act". Senator Todd Young, who is one of the legislators involved in this bill, has not responded to a comment request. Reporting by Jonathan Saul, Jarrett Renshaw and Simon Webb; Editing by Richard Valdmanis, David Gregorio and Simon Webb
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US Commerce Secretary: UK to announce $10 Billion Boeing Purchase
Howard Lutnick, U.S. Secretary of Commerce, said that the United Kingdom would purchase Boeing planes worth $10 billion at the White House, but the details of the deal were not disclosed. Lutnick said the deal would be a private sector purchase and that he'd let the airline make it publicize the details. The White House's graphic describing the deal in broad terms referred to "aircraft parts", but did not provide any further details. The deal is not clear as to what type of aircraft will be involved and if it involves firm orders or options. Boeing did not respond to a request for comment. Virgin, a Boeing-operating company, confirmed that they were not part of a deal. British Airways, which has several Boeing widebody aircraft in its fleet, did not have any immediate comment. Boeing shares were up 3.1% at midday on this news.
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After US-Houthi truce deal, seafarers stuck in Yemen ports are looking for a way out
Sources from maritime unions and maritime sources confirmed on Thursday that 200 seafarers stuck aboard 15 ships for weeks near the port of Ras-Isa in Yemen are now preparing to unload their cargoes and depart thanks to a truce agreement between Houthi militias and the U.S. Officials from the maritime sector said that the threat level for shipping was still high, given the Houthis' declaration that Israeli assets were open to attack, and the associated risks to shipping in general. In the past, ships with no connection to Israel were targeted and there was no guarantee of safe passage. On Tuesday, President Donald Trump said that the U.S. will stop bombing Iran-aligned Houthis (in Yemen) because they have agreed to stop attacking U.S. vessels in Red Sea waters near the Arabian Peninsula. The deal, however, does not cover Israel, a close U.S. allie, as the Houthis said on Wednesday. This suggests that the Houthis' attacks on ships in solidarity with Palestinian militants who are fighting Israel in Gaza may not be completely halted. The U.S. has been bombing Yemen for nearly two months. This campaign caused heavy damage to Houthis and had a spillover effect on shipping in Ras Isa, which is a vital artery of world trade. According to the International Transport Workers' Federation, the largest seafarers' union, several crew members were injured on ships near the U.S. airstrikes, and Houthis prevented two vessels from leaving. According to a Houthi official, following the agreement reached with Washington, ships will now be able enter Ras Isa without any issues, unload their cargoes, and leave. According to data from the MarineTraffic platform, at least one vessel - mostly tankers transporting fuel supplies and liquefied gas - began discharging cargo Thursday. A SAFE Passage is not guaranteed Seafarers remain concerned by Israeli attacks against Houthi targets, despite the fact that the risk of colliding damage has decreased. Shipping sources reported that in response to Houthi-launched drones at Israel during the past week Israeli warplanes struck the major Yemeni Red Sea Port of Hodeidah and caused some damage. Captain of one vessel, who refused to be named due to the sensitive nature of the situation, said that some of the vessels stranded in Ras Isa have been waiting weeks to discharge and are urgently trying to leave the area. Stephen Cotton, ITF General Secratary, said: "The ITF works urgently to help these crews. But they need more than just words. They need safe passage back home." Since November 2023 the Houthis has launched more than 100 attacks against ships plying in the Red Sea, claiming to be acting in support for Palestinians in Israel-besieged Gaza. The Houthis have sunk or seized two ships, killed four seafarers and seized another. Since January of this year, there have been no attacks. Many shipping companies have stopped voyages through Red Sea due to uncertainty about whether the ceasefire agreement will hold. Lasse Kristoffersen is the CEO of Wallenius Wilhelmsen. He said on Thursday that they do not send in ships until they are certain that everyone on board is safe. We have no evidence to support that at the moment. Reporting by Jonathan Saul, Mohammad Ghobari and Marie Mannes from Stockholm. Editing by Mark Heinrich.
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Sources say that RPT-US and Russia are exploring ways to restore Russian gas to Europe.
Eight sources have confirmed that officials from Washington, Moscow and the European Union have discussed the possibility of the U.S. assisting in the revival of Russian gas sales on the continent. Europe cut its imports after Moscow invaded Ukraine in 2022. Russian exporter Gazprom suffered a $7 billion dollar loss the year following. U.S. president Donald Trump has been pushing for peace in Ukraine. This could lead to a thaw of gas relations. Sources familiar with the bilateral talks said that a new role for Moscow on the gas market of the European Union could help cement the peace agreement between President Vladimir Putin and the Russian government. Even though many Europeans have sought alternatives, there are still some who remain. Industry officials believe that more buyers could return after a peace agreement is reached. The loss of Europe's largest gas market, three years ago, has been the biggest blow to Russia's economy. The TurkStream pipeline supplies some of the LNG and some of the LNG that is piped through Turkey to meet 19% of Europe’s demand. Washington's involvement with the restoration of gas sales could assist Moscow in navigating political opposition throughout Europe. Two diplomatic sources, as well as a White House insider, said that Washington would benefit from U.S. participation, which would give it visibility and perhaps some control over the amount of Russian gas returning to Europe. Since 2022, Europe has been turning to other gas suppliers, including U.S. LNG exports. Two of eight sources claim that Steve Witkoff, the U.S. envoy to Ukraine, and Kirill Dmitriev's investment representative, Putin's envoy Kirill, had a conversation about gas in connection with Ukraine peace talks. Witkoff’s spokesperson refused to comment on the question of Russian gas exported to Europe. Dmitriev's Direct Investment Fund in Russia, which is headed by Dmitriev said that there were no such discussions at the moment. Gazprom might consider selling gas to Europe in the event that a new owner takes control of gas networks between Russia and Europe. Kremlin spokesperson Dmitry Peskov said this to French magazine Le Point back in April. Gazprom is in control of the twin Nord Stream pipelines 1 and 2 on the route that crosses the Baltic Sea. European companies who hold stakes are also involved. Peskov told Le Point that Moscow is willing to sell its gas, and it knows some European countries are still interested in buying it. Peskov said to reporters in April that there is a gas supplier and potential buyers. Hungary and Slovakia, which receive gas via the TurkStream pipeline, are still buyers. Long-term contracts are in place with Novatek, Russia, for Belgium, France and the Netherlands to purchase LNG. Five sources have said that discussions to date have been about U.S. investors taking shares in the Nord Stream Pipeline connecting Russia and Germany or the pipeline crossing Ukraine or Gazprom. Sources said that U.S. companies could also act as buyers by purchasing gas from Gazprom, and shipping it into Europe, including Germany. Two sources confirmed that diplomatic discussions involving potential U.S. buyers have also considered the idea of an American buyer taking Russian gas, and then exporting to Europe to alleviate European political opposition towards resuming supply. BlackRock, Vanguard, and Capital Group all hold Gazprom stakes between 1-2%. BlackRock, Vanguard, and Gazprom have not responded to requests for comments. Capital Group declined comment. The European Commission refused to comment. The European Commission's President Ursula von der Leyen expressed her opposition to a return to Russian energy sources. Some still say that we should reopen the tap to Russian oil and gas. It would be a historic mistake and we wouldn't let it happen", she said at a European Parliament meeting on May 7. "Russia has repeatedly shown that it is not an dependable supplier." Brussels wants to stop new Russian gas agreements by 2025, and imports of existing agreements by 2027. The plan will be discussed next month and would need to have the approval of both the European Parliament as well as a majority among member states. Hungary and Slovakia are opposed to the plan. Trump said that he hopes to see a peace agreement in Ukraine soon, and he expects it to pave way for Russia and Ukraine do large business with the U.S. Putin said that Russia was ready to resume gas exports immediately to Europe if the political will existed. On April 30, Kyiv signed a U.S.Ukraine mineral deal that included all natural resources and infrastructure owned by the Ukrainian government, but didn't mention explicitly the pipeline. A person familiar with the talks said that if the level of engagement between Russia, the U.S. and Canada continues to be maintained, there is a high probability of a restart of Russian gas flow... using U.S. based intermediaries. Two sources claim that Gazprom is looking to revive its European sales by offering German customers short-term contracts of 24 months and steep discounts. Two sources said that the company has traditionally asked buyers to sign long-term contracts. HUDLES Despite this, the EU is still firmly opposed. There are also other obstacles to overcome. Numerous legal cases are pending over breach of legacy contracts. In September 2022, a sabotage attempt damaged the Nord Stream pipelines. Three of the pipes ruptured and only one pipe was still able pump gas. The war in Ukraine also has changed the situation. Russian attacks have damaged pipelines that cross Ukraine, but the main transit route is still in good working order. The fact that Nord Stream 2 never received approval from the German government to start sending gas to Germany is a more technical issue, a spokesperson for Germany's Economy and Energy Ministry noted. He declined to elaborate.
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Sources say that the US and Russia are exploring ways to restore Russian gas to Europe.
Eight sources have confirmed that officials from Washington, Moscow and the European Union have discussed the possibility of the U.S. assisting in the revival of Russian gas sales on the continent. Europe cut its imports after Moscow invaded Ukraine in 2022. Russian exporter Gazprom suffered a $7 billion dollar loss the year following. U.S. president Donald Trump has been pushing for peace in Ukraine. This could lead to a thawing of gas relations. Sources familiar with the bilateral talks said that a new role for Moscow on the gas market of the European Union could help cement the peace agreement between President Vladimir Putin and the Russian government. Despite the fact that many Europeans have sought alternatives, some buyers remain, and officials in the industry say they could be more once a peace agreement is reached. The loss of Europe's largest gas market, three years ago, has been the biggest blow to Russia's economy. The TurkStream pipeline supplies some of the LNG and some of the natural gas that Europe needs. Washington's involvement with the restoration of gas sales could assist Moscow in navigating political opposition throughout Europe. Two diplomatic sources, as well as a White House insider, said that Washington would benefit from U.S. participation, which would give it visibility and perhaps some control over the amount of Russian gas returning to Europe. Since 2022, Europe has been turning to other gas suppliers, including U.S. LNG exports. Two of eight sources claim that Steve Witkoff, the U.S. envoy to Ukraine, and Kirill Dmitriev's investment representative, Putin's envoy Kirill, had a conversation about gas in connection with Ukraine peace talks. Witkoff’s spokesperson refused to comment on the question of Russian gas exported to Europe. Dmitriev's Direct Investment Fund in Russia, which is headed by Dmitriev said that there were no such discussions at the moment. Gazprom might consider selling gas to Europe in the event that a new owner takes control of gas networks between Russia and Europe. Kremlin spokesperson Dmitry Peskov said this in an April interview with French magazine Le Point. Gazprom is in control of the twin Nord Stream pipelines 1 and 2 on the route that crosses the Baltic Sea. European companies who hold stakes are also involved. Peskov told Le Point that Moscow is willing to sell its gas, and it knows some European countries are still interested in buying it. Peskov said to reporters in April that there is a gas supplier and potential buyers. Hungary and Slovakia, which receive gas via the TurkStream pipeline, are still buyers. Long-term contracts are in place with Novatek, Russia, for Belgium, France and the Netherlands to purchase LNG. Five sources have said that discussions to date have been about U.S. investors getting stakes in the Nord Stream Pipeline connecting Russia and Germany or the pipeline crossing Ukraine or Gazprom. Sources said that U.S. companies could also act as buyers by purchasing gas from Gazprom, and shipping it into Europe, including Germany. Two sources confirmed that diplomatic discussions involving potential U.S. buyers have also considered the idea of an American buyer taking Russian gas, and then exporting to Europe to alleviate European political opposition towards a resumption of supplies. BlackRock, Vanguard, and Capital Group all hold Gazprom stakes between 1-2%. BlackRock, Vanguard, and Gazprom have not responded to requests for comments. Capital Group declined comment. The European Commission refused to comment. The European Commission's President Ursula von der Leyen expressed her opposition to a return to Russian energy sources. Some still say that we should reopen the tap to Russian oil and gas. It would be a historic mistake and we wouldn't let it happen," said she at a European Parliament meeting on May 7. "Russia has repeatedly shown that it is not an dependable supplier." Brussels wants to stop new Russian gas agreements by 2025, and imports of existing deals will be banned by 2027. The plan will be discussed next month and would need to have the approval of both the European Parliament as well as a majority among member states. Hungary and Slovakia are opposed to the plan. Trump said that he hopes to see a peace agreement in Ukraine soon, and he expects it to pave way for Russia and Ukraine do large business with the U.S. Putin said that Russia was ready to resume gas exports immediately to Europe if the political will existed. On April 30, Kyiv signed a U.S.Ukraine mineral deal that included all natural resources and infrastructure owned by the Ukrainian government, but didn't mention explicitly the pipeline. A person familiar with the talks said that if the level of engagement between Russia, the U.S. and Canada continues to be maintained, there is a high probability of a restart of Russian gas flow... using U.S. intermediaries. Two sources claim that Gazprom is looking to revive its European sales by offering German customers short-term contracts of 24 months and steep discounts. Two sources said that the company has traditionally asked buyers to sign long-term contracts. HUDLES Despite this, the EU is still firmly opposed. There are also other obstacles to overcome. Numerous legal cases are pending over breach of legacy contracts. In September 2022, a sabotage attempt damaged the Nord Stream pipelines. Three of the pipes ruptured and only one pipe was still able pump gas. Despite the fact that the main transit route is still in good working order, the war in Ukraine has caused damage to the pipelines. The fact that Nord Stream 2 never received approval from the German government to start sending gas to Germany is a more technical issue, a spokesperson for Germany's Economy and Energy Ministry noted. He declined to elaborate.
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Source: China resumes Brazilian soybean imports from five suspended firms before Lula's visit.
China, the largest soybean buyer in the world, has resumed Brazilian soya bean shipments that were previously suspended due to phytosanitary concerns. This is according to both Chinese customs data and a source who was familiar with the issue. Brazil is the largest soybean exporter and producer in the world, and China's top supplier, as Beijing diversifies away from the United States - its second largest supplier. Source confirmed that the supply resumed on April 25. This was weeks before a state visit by Brazilian President Luiz inacio Lula to China, and as China was trying to rally a global alliance against the U.S. Trade War. In January, it was reported that China had suspended imports of related entities from Terra Roxa Comercio de Cereais (Terra Roxa), Olam Brasil (C.Vale Cooperativa Agroindustrial), Cargill Agricola S.A. and ADM do Brasil. Cargill has many subsidiaries that are licensed to export goods to China. Brazil announced at the time that it would raise the issue with Beijing, and its Agriculture Ministry last month gave officials in Beijing information about the suspended companies. According to the Chinese Customs Database, all entities that have the exact name of the five companies currently have "normal" registration status. The database did not indicate the date of resumption, and it was impossible to verify previous status. ADM do Brasil parent Archer-Daniels-Midland Co, Cargill Inc - the privately-held U.S. grain trading giant and parent of Cargill Agricola SA - Terra Roxa Comercio de Cereais and the parent firms of the other two affected companies did not immediately respond to requests for comment. The Brazilian Embassy and China's GACC did not reply to any requests for comment. China purchases over 60% of the global soybean trade and sources 70% of its imports directly from Brazil, further eroding U.S. share. China will import a record-breaking 105.03 millions metric tons (tonnage) of soybeans in 2024. More than 74,000,000 tons came from Brazil. Brazil's bumper crop is expected to boost China's soybean exports to record levels in the second quarter.
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EU passes final hurdle to soften CO2 car emission targets
The European Parliament backed a softerening of rules on Thursday, which will allow European automakers to have more time to meet EU C02 emission targets for cars and vans. This could also reduce the potential fines. European manufacturers warned that enforcement of the targets could have resulted up to 17 billion euros in fines, given the goals depend on selling more electric cars. This is a segment where Europeans lag behind their Chinese and U.S. competitors. After heavy lobbying by automakers, the European Commission has proposed that they meet their targets using the average emissions for the period of 2025-2027 rather than this year. The change was approved by 458 votes against 101. There were 14 absentee votes. Ursula von der Leyen, President of the European Commission, said that this change will give European automakers a "breathing room". Volkswagen stated last week that the longer compliance period will still be a burden for 2025. Critics claim that the auto industry had seven years to get ready for the 2025 deadline and the estimated fine of 15 billion euros is wildly inflated.
Shippers around the world are waiting to hear if the US will be imposing port fees on vessels linked to China
The U.S. Trade Representative will announce on Thursday its plan to levy port fees on China linked ships, as part of President Donald Trump’s efforts to revitalize domestic shipbuilding and combat China's dominance in the high seas. The USTR has a statutory deadline of April 17 to complete its remedies. After concluding that China is using unfair policies and practices in order to dominate global shipping, the agency concluded its investigation one year ago. U.S. trade representative Jamieson Greer said last week that the agency will not implement all aspects of its initial fee proposal. The original proposal outlined a variety of options for penalizing China, including million dollar port fees for vessels with ties to China.
USTR did not comment immediately on its plans. This apparent revision was a result of a wave of public and privately expressed opposition by the global maritime sector, including domestic ports and vessel operators and U.S. importers and exporters of all kinds of commodities from bananas to coal.
Greer stated that the fees could not be cumulative, and were designed to prevent economic harm. Separately, it was reported that the administration had been considering different options to soften its proposed port fee after receiving feedback in private meetings with industry representatives or through hundreds of online comments.
Three sources who are tracking the issue and declined to identify themselves said that implementation could come as late November.
The industry executives warned that the U.S. taxpayers and workers, as well as the U.S. shipbuilders, owners and operators the government wants to support, could be hurt if the plan is adopted without any adjustments. This is because the vast majority of the global shipping fleet will be subject to these huge fees.
Ports of all sizes, including small-to-medium-sized ports, have expressed concern that ships would stop calling at their port if the USTR assessed a fee for each U.S. visit. Port executives warn that concentrating calls on larger ports will overwhelm these facilities and starve secondary ports, which have invested billions in infrastructure improvements.
In a press release, Scott Chadwick said that the rule, as it is currently written, could have a significant impact on supply chains, which may cause unintended effects that hurt U.S. port and those who depend on global supply chains.
The Southern California port houses General Dynamics' National Steel and Shipbuilding Co., which builds and repairs vessels. It also hosts cargo carrier Pasha with its U.S. built and flagged Jones Act vessel named Jean Anne, which makes two-weekly trips to Hawaii.
Chadwick didn't elaborate on the impact of fees, but fewer ports calls in San Diego could translate into less ship repair activities for NASSCO as well as financial stress for terminal operators who serve Pasha and others customers.
General Dynamics, as well as other U.S. military shipbuilders including Huntington Ingalls Industries, have standalone or in-port facilities. They didn't immediately respond.
The Shipbuilders Council of America (which represents the industry) said that it supported Trump's efforts to restore and strengthen shipbuilding and ship repairs in the United States.
In a letter addressed to USTR, Cary Davis, CEO of the American Association of Port Authorities, said that the proposed fees would undermine federal investments made in ports over many years, including dredging, new cargo handling equipment and expanded cargo terminals. He stated that some of these investments were made in Trump's first year.
Davis wrote: "This proposal could turn many of these valuable investment that have created thousands of jobs, into assets that are stranded." AAPA declined to comment further.
The Northwest Seaport Alliance, the Ports of Los Angeles Long Beach and Seattle and representatives from USTR met with officials in advance of the public hearings on cargo diversion that took place late March.
The International Longshore and Warehouse Union, which represents the longshore workers of Union Pacific and Berkshire Hathaway's BNSF on the West Coast, joined them.
Matt Leech is the CEO of Ports America in New Jersey, one of the biggest U.S. ports operators.
You can't increase capacity by building new railroad lines or relocating an entire trucking fleet overnight. Reporting by Lisa Baertlein, Andrea Shalal and Jonathan Saul from Los Angeles; editing by Matthew Lewis
(source: Reuters)