‘Shipshape 10’ News for Week Ending December 25, 2016

‘Shipshape 10 List’, a list of news and articles published in the current week that a senior executive in shipping, shipping finance, commodities, energy, supply chain and infrastructure should had noticed; news and articles that are shaping the agenda and the course of the maritime industry.

Sometimes seemingly tangential, sometimes humorous, occasionally sarcastic, but always insightful and topical.

And, this week’s ‘Shipshape 10’:                                                                                                         
Heading to the Holiday Season, market activity has been slowing down as would expect. Still several news stories to report reflecting the year’s tumultuous course for the shipping industry. This week’s top news:

Two Maersk-owned offshore assets (‘Maersk Shipper’ and ‘Maersk Searcher’) while under tow by yet another Maersk-owned anchor-handling tug support vessel, AHTS ‘Maersk Battler’, sank off the French coast while en route to Turkey to be demolished. The newsworthiness of the story is not in the shipwreck itself – towing vessels in the open sea is a very complicated exercise and is reflected to the insurance premiums to underwrite the tow, ask us – but in the fact that terrible accidents happen even under mighty Maersk’s watch, even when only Maersk vessels and personnel are involved:

1. Maersk Supply Services vessel pair sink en route to scrapyard (from Splash 24/7)

On the shipping finance front, rather surprising news that RBS has reportedly agreed to sell $600 mil in shipping loans to a syndicate of buyers; the shipping finance team of Reuters in London and Frankfurt once again ‘scooped’ the story; and once again, the shipping trade press was left behind and ‘copying and pasting’ the story:

2. RBS near to selling $600 million of shipping loans: sources (from Reuters)

The fact that shipping banks are leaving the industry, there seem to be an opportunity for alternative financing; two encouraging developments in this front this week:

3. Northern Shipping smashes third fund target (from Splash 24/7)

And after almost three years of efforts:

4. Maritime & Merchant Bank launches (from Splash 24/7)

Still on the same front of credit provided by alternative sources of capital, Bloomberg run a great story this week:

5. The $12 Trillion Credit Risk Juggle (from Bloomberg)

Taking a look on purely shipping companies and events, the Rickmers Trust moved another step closer to liquidation:

6. Rickmers Maritime bondholders vote against restructuring, liquidation looms (from Seatrade Maritime News)

While another 30-year ship-manager / shipowner closed the doors at the insistence of their main credit, the ING bank:

7. ‘That’s it, Flinter is no longer’: Dutch line dissolves (from Splash 24/7)

And Hanjin selling their stake in the Long Beach Terminal (TTI), following their recent bankruptcy:

8. Hanjin to Sell Stake in U.S. Terminal to Mediterranean Shipping (from the Wall Street Journal)

On more hopeful news, the Dow Jones Industrial Index (DJII) almost reached the major milestone of 20,000 points following the rocket-trajectory after the Trump election; some doubts still hover about the nature of the rally (‘faith-based rally), but again, if we learned anything from shipping in 2016 is that rallies, any type of rallies, are better than declines:

9. A Faith-Based Rally? Warning Lights Are Flashing – Before Anyone Gets Too Euphoric About Dow 20,000 (from Barron’s)

And, taking a quick look in 2017, commodities seem to provide a promising place to invest; which, by association, is positive news for shipping:

10. 2017: Time to Buy Commodities (from Barron’s)                                                                     
Merry Christmas, and a most joyous Happy Holiday Season!

lighthouse-point-judith-11-jul2014

A bright light! Image credit: Karatzas Images


© 2013 – present Basil M Karatzas & Karatzas Marine Advisors & Co.  All Rights Reserved.

IMPORTANT DISCLAIMER:  Access to this blog signifies the reader’s irrevocable acceptance of this disclaimer. No part of this blog can be reproduced by any means and under any circumstances, whatsoever, in whole or in part, without proper attribution or the consent of the copyright and trademark holders of this website.Whilst every effort has been made to ensure that information herewithin has been received from sources believed to be reliable and such information is believed to be accurate at the time of publishing, no warranties or assurances whatsoever are made in reference to accuracy or completeness of said information, and no liability whatsoever will be accepted for taking or failing to take any action upon any information contained in any part of this website.  Thank you for the consideration.

‘Shipshape 10’ News for Week Ending December 4, 2016

‘Shipshape 10 List’, a list of news and articles published in the current week that a senior executive in shipping, shipping finance, commodities, energy, supply chain and infrastructure should had noticed; news and articles that are shaping the agenda and the course of the maritime industry.

Sometimes seemingly tangential, sometimes humorous, occasionally sarcastic, but always insightful and topical.

And, this week’s ‘Shipshape 10’:

This week’s news predictably has been dominated by Maersk’s acquisition of Hamburg Süd at US$ 4 billion; a couple of years ago, Hamburg Süd had considered a merger of sorts with co-patriot Hapag Lloyd but concerns on pricing and also managerial control had the Oetker family shareholders walk away; some time later, in a new order of priorities, Hamburg Süd sold hook, line and sinker, hooker and exited shipping after 80 years in the business. The price seems a multiple of NAV and of hard assets rather than a multiple of EBITDA and cash flows (although Hamburg Süd being a private company, there is little info to draw upon):

1. Maersk Line to Buy German Shipping Line Hamburg Süd in $4 Billion Deal (from the Wall Street Journal Logistics Report)

Now, much speculation whose hands will be forced to make a move in the rapidly changing seascape of the containership liner business:

2. And then there were 11. Who will follow Hamburg Süd? (from Splash 24/7)

And, also worth reading from the Financial Times:

2A. Asian shipping lines navigate a war of attrition (from the Financial Times)

And, in rather surprising news that rather mud further the waters, the 2M alliance has given Hyundai Merchant Marine (HMM) the cold shoulder for joining the alliance:

3. Ship Alliance Backtracks on Hyundai Merchant Marine Membership (from the Wall Street Journal Logistics Report)

The dry bulk freight market keeps being reasonably strong; lots of sale & purchase (S&P) activity has been reported with many buyers coming out of the woods; some say that this is another sign of a recovering market; in a recent article in Seatrade, Basil M. Karatzas argues that the activity should not be considered a breakout pattern:

4. Is it really the right time to buy ships? (from Seatrade Maritime News)

In the energy world, surprising news with OPEC agreeing to a 10% cut of oil production; the agreement is contingent on several factors and OPEC members are not the best behaved bunch, thus the news has to be taken with a grain of salt; shipping analysts do not seem to agree whether this is a positive or negative net development for the overall shipping industry; such is the world of shipping… No doubt, this is big news if OPEC manages to abide by the agreement:

5. OPEC Confounds Skeptics, Agrees to First Oil Cuts in 8 Years (Bloomberg)

However, the following article can be only be positive for the shipping:

6. Saudi Arabia Becomes Net Fuel Oil Importer (from the Maritime Executive / Reuters)

Staying with macro-economics and the ‘big picture’, a lot has been written about Wilbur L Ross as the leading candidate for Secretary of Commerce under the incoming White House administration; via his firm WL Ross, Mr Ross has been an active distress investor in shipping for crude oil and product tankers, gas tankers and dry bulk vessels. It has been surmised that Mr Ross’ familiarity with the shipping industry, having now access to the highest levels of the government, will act as a catalyst for the industry’s crises; a recent article on Bloomberg reminded the audience that the shipping investments by WL Ross have not been stellar, to say the least, bringing into question whether hopes laden on his person may have to find a port:

7. Wilbur Ross’s Funds Have Posted Mediocre Returns in Last Decade (Bloomberg)

On related news, the nominee for Secretary of Transportation Ms Elaine Chao does have a long interest in the shipping industry via the family business, Foremost Maritime:

8. Trump Picks Elaine Chao for Transportation Secretary (from The New York Times)

In the world of finance, RBS failed their stress test last week; although RBS is not active in shipping anymore, more than US$ 6 billion of RBS shipping loans are up for sale; one has to wonder how, if at all, the latest stress test would affect the development of the shipping loan sale discussions:

9. RBS Must Add $2.5 Billion in Capital After Failing BOE Stress Test (from the Wall Street Journal)

And, also on HSH Nordbank AG:

9A. HSH Nordbank holds meetings with potential buyers: sources (from Reuters)

Princess Cruise Lines, a wholly owned subsidiary of the Carnival Corporation, was fined an eye-popping $40 million after pleading guilty to illegal oily waste discharges in the US:

10. Princess Cruise Lines to Pay Largest-Ever Criminal Penalty for Deliberate Vessel Pollution (United States, Department of Justice, Press Release)

mv-cap-san-marco-9

Hamburg Süd’s post-panamax containership MV ‘CAP SAN MARCO’ entering the Port of Hamburg. Image credit: Karatzas Images


© 2013 – present Basil M Karatzas & Karatzas Marine Advisors & Co.  All Rights Reserved.

IMPORTANT DISCLAIMER:  Access to this blog signifies the reader’s irrevocable acceptance of this disclaimer. No part of this blog can be reproduced by any means and under any circumstances, whatsoever, in whole or in part, without proper attribution or the consent of the copyright and trademark holders of this website.Whilst every effort has been made to ensure that information herewithin has been received from sources believed to be reliable and such information is believed to be accurate at the time of publishing, no warranties or assurances whatsoever are made in reference to accuracy or completeness of said information, and no liability whatsoever will be accepted for taking or failing to take any action upon any information contained in any part of this website.  Thank you for the consideration.