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The Effect Analysis of Greece's Debt Crisis to the Shipbuilding & Shipping Industries
2010-06-14LEE, Eun-Chang
목차
요약
Impacts of Greece’s Credit Rating Cut are Limited
Considering the characteristics of the shipping industry and most shipping finances
in Europe, problems caused by Greece’s credit rating cut are limited
Greece’s controlled fleets rank the second in the world. However, since many ships are registered in a flag of convenience nation and mostly focus on export, Greece’s credit rating cut has no significant impact
Greece’s shipping companies account for 11% of the global shipbuilding order book and 26% of the shipbuilding order book in the Republic of Korea
Greek financial institutions account for 24% of Greece’s shipping finance portfolio and
European, United States and Asian financial institutions account for most of it. Therefore, risks caused by Greece’s credit rating cut are limited
Greece’s Debt Crisis Suggests Continuous Downturn in Shipping
Financing, Causing Financial Instability in Europe
Greece’s debt crisis has caused financial instability in Europe and is likely to have impact on the shipping industry recovery
Europe’s financial instability is likely to decrease traffic volume toward Europe, lower freight due to a downturn in the freight future market and reduce used ship sales
Major shipping financial institutions are in Europe or United States and their shipping
finances have suffered from the global financial crisis
The size of shipping finance related syndicate loans decreased by 61% in 2009, reaching only US$ 32.9 billion. Most of them are assumed re-financing
Although major shipping financial institutions are in Europe or United States, Asian financial institutions have made rapid progress since 2009 with a downturn in shipping financing caused by the global financial crisis
The potential reasons are as follows: 1) Greek shipping companies have shown relatively sound cash flows. Since ship prices sharply dropped after the global financial crisis, they have seen a growth in new orders based on such cash flows for which Japanese and Chinese banks have actively provided shipping finances; and 2) As the value of the previously orders ships drops, Asian financial institutions including KEXIM, China EXIM have provided support for shipping finances with LTV problems
The shipping finance market that showed possibility of recovery will continue to be
in trouble due to Greece’s debt crisis
Since the global financial crisis in 2008, a downturn in shipping finance has caused delivery delay, contract changes, a ship price drop and contract cancellation, putting the shipbuilding industry in big trouble
I delivery delay or contract cancellation arises between 2010 and 2012, it is viewed that such risks have been already exposed. However, since Greece’s debt crisis causes a continuos downturn in shipping finance and the shipbuilding industry will continue to suffer accordingly, there is a possibility that the shipbuilding industry recovery is delayed
Considering the characteristics of the shipping industry and most shipping finances
in Europe, problems caused by Greece’s credit rating cut are limited
Greece’s controlled fleets rank the second in the world. However, since many ships are registered in a flag of convenience nation and mostly focus on export, Greece’s credit rating cut has no significant impact
Greece’s shipping companies account for 11% of the global shipbuilding order book and 26% of the shipbuilding order book in the Republic of Korea
Greek financial institutions account for 24% of Greece’s shipping finance portfolio and
European, United States and Asian financial institutions account for most of it. Therefore, risks caused by Greece’s credit rating cut are limited
Greece’s Debt Crisis Suggests Continuous Downturn in Shipping
Financing, Causing Financial Instability in Europe
Greece’s debt crisis has caused financial instability in Europe and is likely to have impact on the shipping industry recovery
Europe’s financial instability is likely to decrease traffic volume toward Europe, lower freight due to a downturn in the freight future market and reduce used ship sales
Major shipping financial institutions are in Europe or United States and their shipping
finances have suffered from the global financial crisis
The size of shipping finance related syndicate loans decreased by 61% in 2009, reaching only US$ 32.9 billion. Most of them are assumed re-financing
Although major shipping financial institutions are in Europe or United States, Asian financial institutions have made rapid progress since 2009 with a downturn in shipping financing caused by the global financial crisis
The potential reasons are as follows: 1) Greek shipping companies have shown relatively sound cash flows. Since ship prices sharply dropped after the global financial crisis, they have seen a growth in new orders based on such cash flows for which Japanese and Chinese banks have actively provided shipping finances; and 2) As the value of the previously orders ships drops, Asian financial institutions including KEXIM, China EXIM have provided support for shipping finances with LTV problems
The shipping finance market that showed possibility of recovery will continue to be
in trouble due to Greece’s debt crisis
Since the global financial crisis in 2008, a downturn in shipping finance has caused delivery delay, contract changes, a ship price drop and contract cancellation, putting the shipbuilding industry in big trouble
I delivery delay or contract cancellation arises between 2010 and 2012, it is viewed that such risks have been already exposed. However, since Greece’s debt crisis causes a continuos downturn in shipping finance and the shipbuilding industry will continue to suffer accordingly, there is a possibility that the shipbuilding industry recovery is delayed
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