Fairplay’s Friday wrap

by admin June 15, 2018

June 15, 2018 237 views

Yannick Guerry, News Editor at Fairplay

Muslims around the world today celebrate the feast of Eid-al-Fitr, the end of the holy fasting month of Ramadan. During Ramadan, Muslims are encouraged to shun material excess and reflect on what really matters, and afterwards comes the feast.

Shipping has been undergoing a prolonged period of fasting when it comes to accessing finance, and now, could it be ready to feast?

Today, having recovered from the pain of previous bad shipping debt, German bank HSH Nordbank announced a multi-billion-dollar war-chest for fresh shiping lending.

There was also bullish sentiment this week after news emerged on Thursday thatGerman shipowning and management group Schulte has set up its own asset management division for third-party investors in shipping. The scheme is likely to raise some eyebrows in the German market where former KG issuing houses such as Ernst Russ, Lloyd Fonds, and Dr Peters also set up ‘alternative investment fund’ management operations over the years as stepping stones to new equity-placing business among retail and institutional investors – so far with limited success.

The ship finance feast extends to shipbuilding as well, as was seen with the newson Monday from South Korea that shipbuilder DSME is back to full capacity, with orders to keep it busy until at least 2023. While this was good news for DSME yard workers, it was not the kind of news that owners would necessarily want to hear, as container freight rates hit a 13-month low in April as fleet growth continued unabated. The news for European shortsea sector was also gloomy this week. On Monday, brokers reported that spot demand for tonnage has been on a steady decline for a few months, with another notable slowdown since mid-May. The market will be hoping for an upturn when the European grain import season kicks in late summer and in the autumn.

On a brighter note, interest in wind propulsion as a means of cutting shipping emissions seems to be gathering momentum as the industry seeks to figure out how best to meet its climate change obligations. Gavin Allwright, who runs the International Windship Association, an organisation that promotes wind propulsion for commercial shipping, told Fairplay that we are starting to see a transition from “is wind propulsion credible?” to “an understanding that it will be part of the future propulsion mix”.

It also emerged this week that Greece and Cyprus are taking the issue of cleaner shipping seriously. Greece’s shipping minister Panagiotis Kouroumblis told Fairplay that his administration was seeking to tighten regulations for domestic shipping in response to a pollution incident last year in the Saronic Gulf. His counterpart in Cyprus, Natasa Pilides, said the two have had talks and would be working closely to determine potential measures that could be taken in the short, medium, and long term to ensure that carbon emission objectives and other crucial regulatory matters could be met.

IHS Fairplay

Fairplay’s Friday wrap

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