Marine Money Athens 2012 – A twist in the tale

Shipfinance — By on November 1, 2012 at 11:42 PM

The Marine Money Greek conference was held in Athens on 17th October. With over 300 people in the audience, chatter and laughter at the coffee breaks and a wonderful closing party for 400 at a football stadium in the port of Piraeus, it was as if there was no crisis in shipping, let alone in Greece.

Several main themes engulfed the conference discussions. Firstly there is a belief that we are at or near the bottom. Different shipping sectors have different profiles but in general the feeling is that if we get through 2013 we should see light in 2014. This of course may come too late for some and the second main theme focused on restructuring, owners with high debt obligations and banks looking to exit or reduce exposure to shipping. There are likely to be casualties in 2013 and the whole industry of “restricting” will step up a gear. For many it will indeed be a race against time.

Another main theme also impacted the timing of the hoped for recovery. The whole issue of eco-ships and whether we will see a new flurry of ordering ships which will add to the supply burden. An interesting twist on this came early in the day when a panel of shipowners said “do not order” and “we do not need any more ships.” When the point was made from the floor, however, that ordering ships today is cheap, that new engine technologies, tested or not, will likely be fuel efficient and in demand from charterers in the years to come, and that attractive terms can be negotiated with desperate shipyards seeking new orders, those same shipowners admitted rather shyly that they were of course looking into the prospect of new investment in new ships. An interesting twist in the tale – others shouldn’t order any new vessels but it is OK for us to do so.

Interestingly, during a discussion about when we may see a balanced market and what might be the catalyst for that to happen, politics became a major issue. The election in the US in two weeks may determine the future of the US energy policy and effectively kill what was once one of the major routes for crude.

The quagmire in Europe has to be sorted out once and for all so that the continent regains direction and sends a message of growth going forward. And the forthcoming elections in China, where growth has now dropped below the sought after 8% p.a. level, are crucial in that there is a prospect of new stimulus programmes to boost the domestic economy. Of course politics has always been a factor in growth, therefore GDP and therefore shipping, but for it to be identified as the single greatest factor that can get shipping out of the hole that it is in over the next 12 – 18 months is indeed a new scenario.

The conference discussed other issues also – finance is available for projects with the following four factors – core clients, corporate structures, projects with an energy / offshore connotation and good employment. If you are a new comer or fall short on any of the listed four, there is not much finance around.

Overall the mood was one of relief that we have made it so far and optimism that we are not too far from better days. Notwithstanding this there was the acceptance that 2013 will be an extremely difficult year for most sectors.

A word of warning was sounded also however. Yes, of course we want the market to rebound and high freight rates to return. But we do not necessarily want a rapid V shaped recovery which will encourage another round of heavy investment in new ships. Discipline is the key word, for individual owners who must cut costs, show caution and maintain relationships, and for the industry as a whole, if we are to see recovery in 2014 and beyond.

The Marine Money Greek Ship Finance conference 2012 was attended by many of Greece’s leading shipowners, the domestic and international banks lending to Greek shipping, and the shipping service providers who are still very active with what is still the biggest commercial fleet in the world.

The day after a general strike was on… and Athens virtually closed down. You can’t win them all!

 

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