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Slater warns on "China syndrome"

Slater warns on "China syndrome"

New York: China's role as a driving force in shipping has been highlighted once again by ship financier Paul Slater. Addressing the Hellenic American / Norwegian American Chambers of Commerce in New York, the First International chairman declared that the "China syndrome" is now the most worrying aspect of the container market because, with the aid of new shipbuilding facilities, the country's exporters may opt to control their own tonnage "in order to maintain price competitiveness for the country's vast manufactured goods market".

Meanwhile, the dry bulk sector "has benefited hugely from the China syndrome as the country has become the largest single consumer of many raw materials and has to import most of them". Describing the tanker market as "the largest casino in the world", Slater says it definitely helps to have a large wallet and a matching ego to play in a market where "freight rates are a small fraction of the delivered cost of oil".

But, in a stark warning for tanker owners, Slater warned that the US Government's declared aim of cutting gasoline consumption by 20% over the next ten years and 50% by 2025 could hve serious repercussions for tanker owners. "If the Government is successful ... we will see a dramatic reduction in the seaborne imports of crude oil to the US", he said. Transport demand for crude oil could be slashed by 50% and the movement of products reduced by more than a third.  [12/02/07]