2013-10-13 13:12:17 - Recently published research from Business Monitor International, "Greece Shipping Report Q4 2013", is now available at Fast Market Research
Greece's outward-looking shipping sector remains partly protected from the full force of the domestic crash. The country's largest container port, Piraeus, is projected to record a double-digit box throughput increase of 13.5% in 2013, while total tonnage throughput is also expected to rise (by 10.3%). This reflects new investment, the port's role as a gateway into Europe, and growth in Greek foreign trade in 2013 (forecast at 2.6% in real terms, the first positive number after four years of steady falls).
Throughput at the country's second largest port in terms of total tonnage, the port of Thessaloniki, is in contrast forecast to fall by 23.0% y-o-y while box traffic there will contract by 3.5%.
Full Report Details at
BMI continues to forecast that the Greek economy will contract again this year, for the sixth year in succession. While the country's economic fate remains grim, there are some signs of stabilisation. GDP fell by 5.6% year-on-year (y-o-y) in Q113, without a doubt a depressing number, but still not as bad as the 5.7% drop in Q412 or the 6.7% drop in Q312. Steep falls in household consumption continue to drive the economy down, while gross fixed capital formation and net exports are showing signs of recovery.
Glimmers of light include a small recovery in consumer confidence, a rally on the stock exchange, and signs that the worst of the collapse in industrial production is now over. International trade is improving, with the trade deficit shrinking by about two-thirds since 2007. Admittedly the improvement is due more to a collapse in imports than to any surge in exports. While the coalition government has so far coped with the thankless and ongoing task of debt rescheduling and economic restructuring, we believe the country's politics will remain fragmented and exposed to the rise of extremist movements. So political risk will remain an important factor. Taking all this into account, BMI believes a long-awaited recovery will make a relatively timid appearance in 2014, when we have pencilled in growth of 1.7%. Looking further ahead we expect the rate of economic growth over the long term to remain around, or slightly below, the 2% mark.
Headline Industry Data
* 2013 port of Piraeus tonnage throughput forecast to grow 10.3% to 15.48mn tonnes; over the medium term we project average annual growth of 7.0%.
* 2013 port of Piraeus container throughput forecast to grow 13.5% to 2.69mn twenty-foot equivalent units (TEUs); over the medium term we project annual average growth of 12.3%.
* 2013 total trade growth forecast at 2.6% in real terms, after an 8.9% contraction in 2012.
Key Industry Trends
Government May Accelerate Port Privatisation Plans: The Greek government is considering a proposal to fast-track the sale of the country's two major ports. Piraeus and Thessaloniki are both up for sale, along with the state railway network, as the government works to plug a hole in its privatisation budget. The sale of the government's interest in the ports was expected to begin in 2014, but the privatisation agency is reportedly considering whether to bring the sale forward to 2013. A firm decision on the sale's timeframe was expected in a matter of months.
Excel Maritime Bankruptcy Sounds A Gloomy Note: The Greek shipping community is mulling over the future of the country's shipping industry following the collapse of Greece-based Excel Maritime Carriers, according to media reports. The company sought Chapter XI bankruptcy to keep the bulk ship firm afloat. A fleet write-down of nearly US$1.5bn was taken by Excel in relation to the Chapter XI filing, according to Erik Nikolai Stavseth, an analyst at Arctic Securities. Meanwhile, six Greek companies have been reported to be either selling or scrapping their last ships, reported Newsfront Greek Shipping Intelligence.
Diana Borrowing Chinese Money: Greece-based dry bulk operator Diana Shipping has entered into a term loan facility for as much as US$30mn with the Export-Import Bank of China holding a majority interest and DNB Bank ASA as agent. The loan agreement has been signed by the company through two separate wholly owned subsidiaries. The company will use the proceeds to partly finance the purchase of two newbuilding Ice Class Panamax dry bulk carriers of nearly 76,000 deadweight tonnage (dwt) each. The two vessels are scheduled to be delivered during Q413 and Q114 respectively. Meanwhile, Diana Shipping has also signed a memorandum of agreement to buy, the m/v Shoyo, from an unaffiliated third party. The 2006 built Panamax dry bulk carrier with 76,942DWT is valued at US$20.3mn. The vessel, to be renamed to Artemis, was scheduled to be handed over to the buyer in September 2013.
Risks To Outlook
The Greek economy has taken so much punishment in recent years that we now believe the balance of risks, on the short term at least, is on the upside. The economy has already shrunk by nearly 20% since 2007, and unemployment is edging up towards 30%. This means that the whole economy is operating from a much lower base, and can respond in a proportionately greater way to a small stimulus. A slightly faster recovery in demand than we currently anticipate, particularly should household expenditure experience a turnaround, would force an upward revision to our forecasts. Also potentially positive is an upturn in investment by core eurozone economies (such as Germany) in the peripheral member states. In this context Greece could become increasingly attractive as a result of the large stock of unemployed labout and gradual imprivement in relative wage costs.
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