Chinese ship owners have scaled back their ship purchasing activity as the year nears its end, with the total S&P activity recorded, deemed on a slower pace than the one noted in the first half of the year. According to a recent report from shipbroker Intermodal, most Chinese owners are of the notion that market prices will soften after the Chinese New Year, i.e. from February of 2014 moving forward. As such, they believe that they will be able to increase their chances of finding younger tonnage available for less money than today. Even so, the shipbroker stated that there are still active buyers in the market with firm interest for several ship sizes, mostly for tonnage between 10 and 20 years old, given that the dry bulk market has managed to hold its bullishness, ending this year's trading well above the 2,000-point mark.
According to Intermodal's SnP broker, Mr. Christos Trageas, "in the domestic economy and after about two months from the opening of Shanghai’s Pilot Free Trade Zone, which in some ways resembles the example of Shenzhen, there have already been several companies to have been given and many more which have applied for approval. Government expects that this step will help internal growth, allowing them to step back and have less intervention in the country’s economy so they can attract new investors to come in and more private companies start taking over several fields, which up to now have been affiliated with the government. It is worth mentioning that amongst the already registered companies, there are also a few of foreign Banks as well as a couple of local government related leasing/bank institutions", he noted.
According to Trageas, "this pilot model and its results, will be closely monitored by the government over the next couple of years, so as if it proves to be successful they can apply similar models to other major cities as well, such as Tianjin, Zhoushan, Zhuhai, with Tianjin already in the forefront and pushing to receive such a free trade zone. All the above comes to complete the expansion which has started in the Qianhai district of Shenzhen, where more national and international financial institutions are allowed to offer competitive loans with better interest rates and terms", he stated.
However, in order to attract further new investments and setting up of new private companies in most of these cities, China will also have to deal with one of its most pressing issues, which also happens to be a byproduct of its extraordinary growth during the past decade. "The problem of heavy air pollution has been a growing issue in major cities such as Shanghai, Beijing, Qingdao as well as many others. Many experts are suggesting that the government starts to take hard measures such as replacing energy production from cheap but dirty resources such as coal, with cleaner types of energy such as natural gas", said Mr. Trageas, in his analysis of the current market trends.
He added that "experts are evaluating that if there are no measures taken soon, then it will be near impossible to reverse the situation in the future. However, such big changes need time and come at a high cost and we don’t feel that we will see significant shifts in the proportions of imports of coal or gas in the near future. New urban developments such as free trade zones will at some point push for better quality of life within these major cities as they try to compete with other major cities around the world and as this starts to take effect we will then see a shift in the main resources imported into the country. Until then, dry bulk resources will continue to pay the most prominent role in the country’s development.
China is doing its best to find immediate solutions to provide another boost to its economy. Hopefully, both Europe and the U.S. will continue dealing with the byproducts of the financial crisis, so as to further promote a firm and healthy growth in global trade, which will allow the shipping industry to feel more confident regarding its long-term future prospects" Trageas concluded.
According to Intermodal's SnP broker, Mr. Christos Trageas, "in the domestic economy and after about two months from the opening of Shanghai’s Pilot Free Trade Zone, which in some ways resembles the example of Shenzhen, there have already been several companies to have been given and many more which have applied for approval. Government expects that this step will help internal growth, allowing them to step back and have less intervention in the country’s economy so they can attract new investors to come in and more private companies start taking over several fields, which up to now have been affiliated with the government. It is worth mentioning that amongst the already registered companies, there are also a few of foreign Banks as well as a couple of local government related leasing/bank institutions", he noted.
According to Trageas, "this pilot model and its results, will be closely monitored by the government over the next couple of years, so as if it proves to be successful they can apply similar models to other major cities as well, such as Tianjin, Zhoushan, Zhuhai, with Tianjin already in the forefront and pushing to receive such a free trade zone. All the above comes to complete the expansion which has started in the Qianhai district of Shenzhen, where more national and international financial institutions are allowed to offer competitive loans with better interest rates and terms", he stated.
However, in order to attract further new investments and setting up of new private companies in most of these cities, China will also have to deal with one of its most pressing issues, which also happens to be a byproduct of its extraordinary growth during the past decade. "The problem of heavy air pollution has been a growing issue in major cities such as Shanghai, Beijing, Qingdao as well as many others. Many experts are suggesting that the government starts to take hard measures such as replacing energy production from cheap but dirty resources such as coal, with cleaner types of energy such as natural gas", said Mr. Trageas, in his analysis of the current market trends.
He added that "experts are evaluating that if there are no measures taken soon, then it will be near impossible to reverse the situation in the future. However, such big changes need time and come at a high cost and we don’t feel that we will see significant shifts in the proportions of imports of coal or gas in the near future. New urban developments such as free trade zones will at some point push for better quality of life within these major cities as they try to compete with other major cities around the world and as this starts to take effect we will then see a shift in the main resources imported into the country. Until then, dry bulk resources will continue to pay the most prominent role in the country’s development.
China is doing its best to find immediate solutions to provide another boost to its economy. Hopefully, both Europe and the U.S. will continue dealing with the byproducts of the financial crisis, so as to further promote a firm and healthy growth in global trade, which will allow the shipping industry to feel more confident regarding its long-term future prospects" Trageas concluded.