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Seoul non-committal on privatisation of HMM

The long-discussed privatisation of South Korea’s flagship line, HMM, has been making plenty of headlines out of Seoul in recent weeks. Today, the country’s ocean minister laid out the conditions under which he would be happy to sell off the carrier, the world’s eighth largest containerline.

HMM has been under a creditor-led debt restructuring scheme since 2016, managing to survive a container downturn, which famously saw rival Hanjin Shipping go bankrupt.

The Korean line – along with all global liners – has been enjoying record profits this year, but is now having to adjust to a slowing global economy.

“The privatisation would be difficult with a 74% stake, so we will review shipping industry circumstances with long-term perspectives to carry out the stake sale,” oceans minister Cho Seung-hwan said during a parliamentary audit into his ministry today.

The government will also “comprehensively” consider the industry and the overall stock market, and continue consultations with related parties concerned, he added.

Shares in HMM have dropped 40% over the past year with many investors certain that container shipping’s record earnings have peaked.

Drewry’s World Container Index (WCI), a global spot rate reference, plunged below $4,000 per feu today for the first time since December 2020, with most container indices – whether spot, long-term, or charter, on the slide in recent months. The WCI dropped another 8% this week to close on $3,688.75, still more than twice as high as the historical average, but a far cry from the $9,408.81 per feu registered at the start of this year.

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.
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