Macroeconomic indicators remain depressed with the International Monetary Fund revising its China GDP growth downwards by 0.4% to 5.6% for 2020 as a result of the COVID-19 virus outbreak.
Braemar reports that Chinese firms have been caught in a “credit crunch” with mounting debts, meaning that many companies are unable to pay staff or suppliers as a result of the lockdown in many parts of China.
“The Chinese government has asked banks to offer more credit for an economy stunned as the virus spreads rapidly. The Chinese Association of Small and Medium Enterprises said around 60% could cover regular payments for only one to two months before running out of cash. Only 10% said they could hold out six months or longer,” reported Braemar.
Even in the face of this growing depression in China the eurozone economy managed to buck the trend, growing at its fastest rate for six months in February, according to some data-analysts.
With Europan markets showing an uptick Greek shipowners may want to hear the latest news from Piraeus Bank which on 21 February announced it is partnering with Japan’s Orix Corporation.
Piraeus Bank said it has “entered into an exclusive, strategic collaboration agreement with ORIX Corporation, a Japan and US-listed company, for the provision of financing solutions to the Greek maritime sector.”
Allied Shipbrokers in Athens pointed out that the announcement did not offer an insight into how much money will be lent other than to say that the cooperation “is expected to expand in both scope and sectors over time”.
Perhaps the Piraeus Bank deal will inspire further acquisitions such as those reported by Braemar, which saw Greek interests acquire SM Lines’ 8,240TEU SM Charleston, which was built in 2005 at Hyundai Samho to Greek buyers, “at a rumoured price of US$23 million which might seem low, especially when compared to last done,” said the broker.
In spite of the general economic gloom the sale and purchase market saw a little more activity this week, with SM Lines also selling their Hyundai 6,622TEU sisterships SM Seattle and SM Hong Kong (both built in 2008 at the Hyundai Heavy Industries shipyard) to KMTC for a reported US$40 million for the pair.
Korean feeder operators featured heavily in the sale and purchase market this week with Sinokor having purchased the Sinar Subang and Sinar Sangir 1,700TEU sisterships both gearless and delivered in 2008 by Imabari, for a reported price of US$14.5 million en bloc.
Braemar said of the Sinokor deal that it was some US$2.5 million below what was being discussed less than a year ago, though “this is still a firm price given the discussions recently taking place on a geared sister.”
Demolition and newbuilding levels remain remarkably slow for this time of year. Perhaps it will take the defeat of the COVID-19 virus to re-energise those sectors, maybe the Greeks flush with the financing from Piraeus Bank will get the sale and purchase bug again.