China Magnet for Greek Shipping Magnates

China Magnet for Greek Shipping Magnates

EM-AX304_GREEKS_G_20130930082409According to the Wall Street Journal, Greek shipowners, are more and more moving their financing and ship orders to China, given the cheap credit and lower shipyard costs there.

As stated in the article, Greek shippers operate 16% of the world’s fleet of dry-bulk and container vessels, and about a quarter of all oil tankers. By cutting costs aggressively, they have overcome the global economic crisis better than many of their German, Scandinavian and Japanese competitors—holding on to market share despite a sharp slowdown in international trade since 2008.

Greek shipping magnates, being the biggest and most influential buyers of new ships- heavily courted by shipbuilders in places like Japan and South Korea – their growing Chinese orders could influence other global buyers, the paper noted.

As of the end of September this year, Greek shipowners had ordered 188 vessels from Chinese yards, compared with 217 from Korea, according to Athens-based XRTC Business Consultants.

The budding Sino-Greek shipping partnership dates back to 2010 when China’s then-Premier Wen Jiabao, while on a visit to Athens, offered $5 billion in soft loans to Greek shipowners if they opted for China’s yards to build new vessels.

“The Greeks are the world’s dominant buyers both in terms of new and used vessels so they are contributing to the glut,” said Jonathan Roach, senior analyst at London-based Braemar Securities Ltd.

  • thes8niki

    Dry bulk shippers lower as capesize rates slide

    Dry bulk shippers are smacked following a sharp decline in capesize shipping rates for a third consecutive day.

    Overnight, capesize rates fell 4.2% (or $1,598/day) to $36,425/day and have dropped 14% (or $5,786/day) in the last three days; panamax rates fell 0.3% (or $48) to $14,388/day, while supramax rates rose 0.9% (or $100) to $11,279/day.

    The Dry Bulk Index fell 2.1% (or 43 points) to 2,003 overnight, but has doubled since Aug. 12, led by capesize rates which have climbed 245%, largely driven by higher iron ore shipments to China out of Brazil and Australia (Briefing.com).

    Wells sounds cautious tone on dry bulk rally

    Wells Fargo becomes the latest firm to call a near-term top in the Capesize-fueled dry bulk rally. (See Deutsche)

    “After rising ~290% since 8/19 to $42,211/day, Capesize spot rates have declined ~10% to $38,023/day since Wednesday,” analyst Michael Webber notes, adding that “despite the modest pull back … rates remain ~235% above their Q2 average [and] 35% above Q4 forward agreements, which are off ~11% since Wednesday, while 2014/2015 FFAs are ~50-60% below spot rates.”

  • 68040

    Build a couple of car factories in Piraeus. China has dozens of auto companies. Pick out the best ones. Use the ships and shipping lanes to bring parts and then to export to world markets especially Europe which has stiff protectionist rules for cars built outside the EU. Win Win for both Greece and China.

  • Panagiotis

    this is a Byzintine argument, it is cheaper to buioldit in Germany/spain that Greece but I do agree with you but not only to Europe buut also to middle east and Northern Africa