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By Paul Page 

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The expanded Panama Canal is already having an impact on U.S. trade. The first shipment of liquefied natural gas from the U.S. to China arrived at a Yantian shipping terminal this week, the WSJ's Jenny Hsu reports, effectively opening a new market for U.S.-produced LNG. The U.S. export opening comes even as the expanded canal's impact on imports remains under debate. For the energy business, however, the results are clear: U.S. LNG has not been able to compete in Asia because the large ships that haul the gas can't fit through the older Panama Canal locks. The new locks will cut travel time by about a third, to 20 days, and slash transportation costs, rewriting the financial equation for LNG exports to Asia. The opening comes at the right time for the LNG field. China wants to increase the role of natural gas, and LNG imports were up 21% in the first six months of the year, with most supplies coming from Australia and Qatar.

There appears to be no shortage on world textile markets of goods labeled "Egyptian cotton" even as production has waned. The contradiction is at the heart of a spreading controversy as Wal-Mart Stores Inc., Target Corp. and other big U.S. retailers question whether one of India's biggest textile companies has been supplying these stores with phony Egyptian cotton sheets. In fact, Egypt produced less than 1% of the global cotton supply last year, the WSJ's Sarah Nussauer and Preetika Nana report, and output has fallen by a third over the last 10 years as the country has faced political and economic upheaval. The questions over the cotton that have hit provider Welspun India Ltd. highlight the fault line between retail marketing and the deeper recesses of supply chains, where the premium prices behind some big brands run into the practical reality of supplies. The Cotton Egypt Association, which certifies suppliers, says it is cracking down on knockoffs, but the group concedes that 90% of products labeled "Egyptian cotton" are in fact fakes.

Some tech-equipment providers are trying to break Intel Corp.'s dominance as a semiconductor supplier . International Business Machines Corp. and Advanced Micro Devices Inc. are among several companies talking up new chip production, responding to what the WSJ's Don Clark reports is a call by some of the world's biggest technology companies for more market choices. Some big buyers of servers that use the powerful Intel chips to back their massive data-center operations -- including Facebook Inc. and Alphabet Inc.'s Google -- are among those pushing for alternatives. Rival chip providers face a steep challenge: of the 9.81 million servers shipped last year, 98% used x86-based chips -- Intel's flagship line. The semiconductors also carry a big 49% profit margin for Intel, which must figure into the call by Intel's customers for more competition in the chip business.

TRANSPORTATION

China's state-owned shipbuilding giant is looking for financial growth outside the troubled shipping business. China State Shipbuilding Corp. is close to pledging it will buy $2 billion worth of shares in the planned $7 billion-plus initial public offering of Postal Savings Bank of China Corp. in Hong Kong, the WSJ's Alec MacFarlane and Julie Steinberg report. The IPO is expected to be the world's biggest this year, and the China State Shipbuilding commitment is likely to be one of several "cornerstone" investments that are coming mostly from Chinese state-owned enterprises. It also highlights how China's sprawling state-owned conglomerates are casting around for new places to put their money. China State Shipbuilding has diversified into areas such as real estate, bridge construction, steel-manufacturing and financing. Rival state-owned China Shipbuilding Industry Corp. also has branched out, and now gets more than half its revenues outside shipbuilding operations.

QUOTABLE

IN OTHER NEWS

The eurozone's economic recovery gained a little speed in August, according to surveys of purchasing managers. (WSJ)

Germany's economic growth slowed in the second quarter as business investment tailed off. (WSJ)

Sales of previously owned homes slipped in July. (WSJ)

A top U.S. House Republican will release a plan aimed at set a new framework for taxing cross-border retail sales, a key e-commerce sticking point. (WSJ)

Express Inc. slashed its forecast for the year as the apparel chain reported sliding sales, including a 7% decline in e-commerce business. (WSJ)

Qantas Airways Ltd. reported an 85% gain in net profit for the year through June as a big cost-cutting effort paid off. (WSJ)

SAIC Motor Corp., China's biggest auto maker, reported a 6% increase in first-half net profit. (WSJ)

Airlines are investing heavily in radio-frequency identification tags and mobile apps to better track luggage and give passengers information on their baggage. (WSJ)

A bankruptcy judge is preparing to rule on a dispute between Aeropostale Inc. and its former financial backer that could send the apparel retailer into liquidation. (WSJ)

The U.S. Federal Maritime Commission will ask for more information on the Ocean Alliance shipping group, effectively pushing back a decision on regulatory approval. (MarineLink)

Federal investigators recovered 26 hours of information, including navigation bridge audio, from the data recorder of the sunken El Faro cargo ship. (Florida Times-Union)

FedEx Corp. and United Parcel Service Inc. have raised published ground-parcel prices at an identical rate over the last 10 years, according to a consultant's analysis. (DC Velocity)

FedEx signed a five-year agreement with Atlas Air Worldwide Holdings Inc. for peak-season air transport using 747 freighters. (Air Cargo News)

All Nippon Airways will reduce its freighter schedule in October amid declining demand from China and Southeast Asia auto production sites. (Nikkei Asian Review)

G6 container shipping alliance members will eliminate some Asia-North Europe services due to "the expected low demand in October." (The Loadstar)

Industrial parts distributor MRC Global Inc. will scale back its Australia operations, citing the downturn in energy and mining business. (Industrial Distribution)

Indian e-commerce marketplace Flipkart launched an "Assured" service to compete with Amazon Prime. (Business Standard)

ABOUT US

Paul Page is deputy editor of WSJ Logistics Report. Follow him at @PaulPage, and follow the entire WSJ Logistics Report team: @brianjbaskin, @lorettachao, @RWhelanWSJ and @EEPhillips_WSJ, and follow the WSJ Logistics Report on Twitter at @WSJLogistics.

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Write to Paul Page at paul.page@wsj.com

(END) Dow Jones Newswires

August 25, 2016 06:51 ET (10:51 GMT)

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