South Korean liner Hanjin Shipping Co to file for bankruptcy

[CityFarmer]

Weaker players are getting out from the shipping sector...

South Korean liner Hanjin Shipping Co to file for bankruptcy

SINGAPORE (Aug 31): Hanjin Shipping Co, South Korea’s biggest container shipping line, is applying for court receivership after running out of cash to pay back its lenders.

The world’s seventh-biggest shipping line by capacity, it had debts totalling KRW6.1 trillion ($7.5 billion) as at June 30, 2016, versus cash and equivalents amounting to KRW180.4 billion, according to its 1H2016 financial report.

Hanjin Shipping was losing money in four out of the past five years and had been attempting to reschedule its debt repayments under a voluntary creditor-led programme since May.

However, restructuring proposals submitted by the liner were not enough to address the shortfall in cash, its main lender Korea Development Bank said Tuesday.

Hanjin may still need some KRW1.3 trillion in cash even after it agreed on charter-rate adjustments with ship owners and extended the maturities of some loans, according to Korea Development Bank.
...
http://www.theedgemarkets.com.sg/sg/arti...bankruptcy

[Behappyalways]

More Hanjin ships seized, as freight rates surge and cargo owners fret
http://www.cnbc.com/2016/08/31/hanjin-sh...onhap.html

[Behappyalways]

Hanjin ships, cargo and sailors stranded at sea
http://www.bbc.com/news/business-37241727

[Greenrookie]

Hanjin ships, cargo and sailors stranded at sea
http://www.bbc.com/news/business-37241727

http://www.hellenicshippingnews.com/more...ners-fret/


Another link, the freight rate of lines which  hanjin is operating surged. I looking at it more at cyclical cycles. Even if GG figurative 7 bear and 3 bull is any guide, the shipping market bottom has been long enough, the bugs boys are also taken out. Textbook tell us, collapse of Giants will lead to rebalancing .... Shipbuilders, charters O@G all bombed. Blood is on the street

[CityFarmer]

Hanjin collapse, is the turning point for freight rate recovery?

Freight rates jump as Hanjin collapse spurs supply shock
02 Sep 2016 19:33
[COPENHAGEN] The cost of transporting containers from ports in Asia to Northern Europe and the United States jumped this week after the collapse of South Korean Hanjin Shipping Co Ltd.

Container spot freight rates on the world's busiest routes from Asia to Northern Europe jump 36.6 per cent to US$949 per twenty-foot equivalent units (TEU) this week. Rates increased by 51 per cent to the US West Coast and 45 per cent to the US East Coast.

Following the Hanjin default there has been a considerable rise in freight rates, brokerage firm Fearnley Securities wrote in a note to clients on Friday.
...
REUTERS

Source: Business Times Breaking News

[brattzz]

just short-term scrambling to cover sea-freights, will normalised low again...

[BlackCat]

Another link, the freight rate of lines which  hanjin is operating surged. I looking at it more at cyclical cycles. Even if GG figurative 7 bear and 3 bull is any guide, the shipping market bottom has been long enough, the bugs boys are also taken out. Textbook tell us, collapse of Giants will lead to rebalancing .... Shipbuilders, charters O@G all bombed. Blood is on the street

Agree that container shippers and leasors are all bleeding now, but I think there is still 2-4 more years of rebalancing to go.

Hanjin has 609,536 teu capacity, about 2.9% of the global containership fleet.  60 chartered ships, and 37 owned.  (link)  Global container line overcapacity is estimated at 30%.  So even scrapping all of Hanjin's ships won't make a difference.

There is still more capacity being added, due to old shipbuilding orders from 2014-15: 
As of February 1, 2016, newbuilding containerships ... representing approximately 19.6% of the total worldwide containership fleet capacity ...were under construction. The size of the orderbook will result in the increase in the size of the world containership fleet over the next few years. (Seaspan 2015 annual report, p11)

We need to see a lot more blood in the water, before a recovery.  Its a long drawn out process, made longer by zero interest rates.

[CityFarmer]

Another link, the freight rate of lines which  hanjin is operating surged. I looking at it more at cyclical cycles. Even if GG figurative 7 bear and 3 bull is any guide, the shipping market bottom has been long enough, the bugs boys are also taken out. Textbook tell us, collapse of Giants will lead to rebalancing .... Shipbuilders, charters O@G all bombed. Blood is on the street

Agree that container shippers and leasors are all bleeding now, but I think there is still 2-4 more years of rebalancing to go.

Hanjin has 609,536 teu capacity, about 2.9% of the global containership fleet.  60 chartered ships, and 37 owned.  (link)  Global container line overcapacity is estimated at 30%.  So even scrapping all of Hanjin's ships won't make a difference.

There is still more capacity being added, due to old shipbuilding orders from 2014-15: 
As of February 1, 2016, newbuilding containerships ... representing approximately 19.6% of the total worldwide containership fleet capacity ...were under construction. The size of the orderbook will result in the increase in the size of the world containership fleet over the next few years. (Seaspan 2015 annual report, p11)

We need to see a lot more blood in the water, before a recovery.  Its a long drawn out process, made longer by zero interest rates.

Based on Fortune, "Hanjin accounts for 7.8% of trans-Pacific trade volume for the U.S. market". Trade volume, is a better gauge than tonnage on impact analysis, IMO.

http://fortune.com/2016/09/05/hanjin-shipping-ships/

IMO, we should consider both scrapped, and pending delivery tonnage, to determine the state of overcapacity. Do we have the scrapped statistic?

[TTTI]

Another link, the freight rate of lines which  hanjin is operating surged. I looking at it more at cyclical cycles. Even if GG figurative 7 bear and 3 bull is any guide, the shipping market bottom has been long enough, the bugs boys are also taken out. Textbook tell us, collapse of Giants will lead to rebalancing .... Shipbuilders, charters O@G all bombed. Blood is on the street

Agree that container shippers and leasors are all bleeding now, but I think there is still 2-4 more years of rebalancing to go.

Hanjin has 609,536 teu capacity, about 2.9% of the global containership fleet.  60 chartered ships, and 37 owned.  (link)  Global container line overcapacity is estimated at 30%.  So even scrapping all of Hanjin's ships won't make a difference.

There is still more capacity being added, due to old shipbuilding orders from 2014-15: 
As of February 1, 2016, newbuilding containerships ... representing approximately 19.6% of the total worldwide containership fleet capacity ...were under construction. The size of the orderbook will result in the increase in the size of the world containership fleet over the next few years. (Seaspan 2015 annual report, p11)

We need to see a lot more blood in the water, before a recovery.  Its a long drawn out process, made longer by zero interest rates.

Agreed
Imagine with current effectively zero rates, Hanjin couldn't survive
If and when rates rise, even by just a bit, it'd set off catastrophe in the sector.
It'd be much better if this catastrophe comes sooner.

[shadow_walker]

It is very unlikely that the ships will be scrapped. Unless they are 15-20 years old, they certainly fetch more in the 2nd hand market than the scrap price.

IMO, more likely that Korea govt will engineer a takeover of assets by Hyundai to drive the consolidation.