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China to follow Korea, Japan to haul own cargo: Graham Porter
THE chairman of Tiger Group Investments and a founder of Seaspan Shipping, Graham Porter, says shipping must prepare for a return to the 1970s and 1980s in terms of mentality.
Speaking at the Marine Money Ship Finance Forum in Singapore, Mr Porter said he sees a "full rotation" to the 1970s and 1980s with nation states carrying their own cargoes, adding that Japan, South Korea and latterly China are all pursuing this policy, Singapore's Splash 24/7 reported.
With the growth of Chinese financiers, Mr Porter said, ship finance going forward would not be a problem.
But he said that with the world likely to be in a deflationary state for as long as 10 years there would be moderate vessel acquisition.
Moreover, for bulk carriers in particular, returns have changed forever. He told delegates to forget 15 per cent returns on bulk carriers and to accept as low as two per cent going forward. "The days of 15 per cent are gone," Mr Porter said.
He also touched upon the hugely altered banking scene claiming that there were just five banks globally that will lend to non-corporate clients for second-hand ship acquisitions.
On container shipping, Mr Porter compared 20,000-TEU vessels to Airbus A380 aircraft, for use on limited dedicated trade lanes. He described 20,000-TEU ships as illiquid assets, favouring instead vessels of 9,000 to 10,000 TEU in capacity. Moreover, the drop in bunker prices from US$850 a ton to $250 a ton has changed the size debate in the sector, he said.
Mr Porter also warned that asset prices for offshore vessels could plummet much further.
Speaking at the Marine Money Ship Finance Forum in Singapore, Mr Porter said he sees a "full rotation" to the 1970s and 1980s with nation states carrying their own cargoes, adding that Japan, South Korea and latterly China are all pursuing this policy, Singapore's Splash 24/7 reported.
With the growth of Chinese financiers, Mr Porter said, ship finance going forward would not be a problem.
But he said that with the world likely to be in a deflationary state for as long as 10 years there would be moderate vessel acquisition.
Moreover, for bulk carriers in particular, returns have changed forever. He told delegates to forget 15 per cent returns on bulk carriers and to accept as low as two per cent going forward. "The days of 15 per cent are gone," Mr Porter said.
He also touched upon the hugely altered banking scene claiming that there were just five banks globally that will lend to non-corporate clients for second-hand ship acquisitions.
On container shipping, Mr Porter compared 20,000-TEU vessels to Airbus A380 aircraft, for use on limited dedicated trade lanes. He described 20,000-TEU ships as illiquid assets, favouring instead vessels of 9,000 to 10,000 TEU in capacity. Moreover, the drop in bunker prices from US$850 a ton to $250 a ton has changed the size debate in the sector, he said.
Mr Porter also warned that asset prices for offshore vessels could plummet much further.
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