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Korea Report - August, 2017.
With childish laughter, Kim Jung-eun is firing mass
bloodshedding weapons like nuclear bombs and ICBMs, as if he is playing with
fire work in his garden, while his people are starving to death. Everyone is
raising voices concerning the grave situation with a feast of rhetoric, but
no-one is actually suggesting practical solution to stop him. UN Security Council is constantly issuing unworkable sanctions. President Trump is like an
inexperienced cowboy aimlessly shooting his shiny gun into the air, spitting
out incomprehensive words like ¡°with fire and fury¡±. China is showing
ambiguous attitude, somewhat encouraging NK to
continue while openly oppressing Kim¡¯s firework. They are concentrating on
accusing SKorea for its self-defensive THAAD system without even an ounce of
understanding in the situation. President Moon is saying that war would not break
out on the Korean Peninsula without the consent of SKorea, as if he is
controlling the global political issue. Local politicians are doing nothing but
political strife while blankly waiting for the missiles to fall over their
heads. While foreign countries formulate countermeasures against Kim¡¯s proclaim
on war, Koreans do not feel the danger, only seeing it as an argument between
the US and NK far beyond the Pacific. It is with regret that we can only
observe how this battle game will end. How will it end.
SKorea's shipping industry is still reeling from
the fallout from Hanjin Shipping Co.'s bankruptcy last year as the remaining
companies have yet to fill the vacuum left by Hanjin. Hanjin Shipping,
previously the world's seventh-largest shipper, was put under court
receivership in Sept last year, as its creditors rejected a self-rescue plan
and refused to save the failing business before it was declared bankrupt in early
Feb. One year after Hanjin sought court protection from creditors, however, HMM
and other domestic shipping companies are still struggling to make their
presence in the global market. Before the failure, Hanjin operated a fleet of
100 container vessels and 44 bulk carriers, ranking the container line among
the world's top seven players. As domestic financial authorities wished, HMM
and SM Line Corp acquired some of the Hanjin fleet, but its core assets (9
vessels with capacities of about 13,000 TEU) were sold to Maersk Line and MSC.
Domestic shipping companies have also failed to purchase all 71 global routes
operated by Hanjin. SM Line bought 50 US-Asian and inter-Asian routes, but the
remaining routes were closed. HMM and SM Line took over about 10 Hanjin
container terminals at home and abroad, but its core flagship terminal in New
York's Long Beach was sold to Maersk. Hanjin and HMM, stood at 1.05 mil TEUs as
of end Aug last year, but the number for HMM and SM Line plunged to 390,000
TEUs a year later. The tumble strikes a sharp contrast to global leaders'
fierce competition to increase capacity through M&A and placing new orders
for container ships in the wake of Hanjin's bankruptcy. HMM has an ambitious
plan to emerge as a global shipping line with a capacity of 1 mil TEUs by
placing new ship orders, but it can't attain the goal immediately since it
usually takes three to four years to take delivery of a ship after an order is
placed. On top of the decreased capacity, the local shippers' share of US-Asia
routes has also dropped over the past year. Hanjin and HMM had a combined share
of 10.9% on the routes as of the end of June last year, with HMM holding 5.8% a
year later. In Oct last year, the government unveiled a package aimed at
strengthening the shipping industry's competitiveness. The Moon government set
the establishment of a shipping powerhouse as one of its 100 policy goals. The
Moon administration will also provide support to a business alliance that HMM
and 13 other shippers launched early this month to work together to develop new
shipping routes and operate overseas terminals. It also plans to set up a
state-funded maritime promotion corporation by June next year.
TOPICS.
NK continues provoking with ICBM
and nuclear weapon (p.2)
President Moon marks his 100th day
in office on 16th, with both good and bad grades (p.2)
Moon and Xi held first face to
face talk to make no friendly agreement (p.3)
Korea and USA started the talk on
FTA (p.3)
President Trump plans to sign an
executive order to consider investigating China (p.4)
The UNSC unanimously adopted new
sanctions on NK on 5th (p.6)
NK
fired an ICBM over Japan into the sea on 29th (p.7)
Government released a state budget
plan for 2018 worth $381 bil (p.8)
SKorea¡¯s per capita GDP is
expected to exceed $30,000 in 2018 (p.9)
S&P reaffirmed its long-term
sovereign rating on SKorea at AA (p.9)
SKorea's trade surplus came to $7
bil in Aug, marking 67 straight months (p.10)
SKorea's top 30 conglomerates increased
their investment 28% on-year in 1H (p.11)
Seoul court sentenced SEC Vice
Chairman Lee Jae-yong to five years in jail (p.12)
SEC has
reclaimed the top spot in the North American smartphone market from Apple (p.12)
SKorea's
top 7 tech giants are expected to see operating profit rise 200% on-year in Q3 (p.13)
Posco E&C signed contract
($834 mil) to construct coal-fired power plants in Bangladesh (p.14)
Stock
holdings by foreign investors topped KW600 tril ($526 bil) for the first time
as of July (p.15)
SKorea's foreign exchange reserves
came to $384.84 bil in Aug (p.16)
BOK held its key interest rate at
record-low 1.25% for 14th straight month (p.16)
SKorea's shipping industry is
still reeling from Hanjin Shipping's bankruptcy last year (p.16)
HHI has won a newbuilding order
for LNG FSRU from Swan Energy of India (p.19)
HMD reported to suspend operation
of Dry Dock No 4 until the end of this year (p.19)
HMM is in discussions with
BlackRock to bring investment of $527-$879 mil (p.21)
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