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Wednesday, 24 April 19
SHIPPING MARKET INSIGHT - IS THIS A BANKERS' MARKET? - INTERMODAL
 Over the last 10 years, many of the traditional and top lending banks have made the decision to either downsize their portfolios or even exit shipping. According to Petrofin, Top 40 shipping banks’ lending has fallen since 2008 by 25%, whilst at the same time the world fleet has grown by 28%. On top of this, out of the banks that have decided to stay in the game, not all of them have the strength, the budget and the competitive terms to do so. As a result, the availability of financing for small-medium size companies has become a scarce, hence a luxury good. In other words, even when there is available financing for these companies, its cost is really prohibitive.
Apart from the banks’ endogenous and structural issues, their shipping departments also need to decide where to allocate their budget. In an era of growing LNG demand, numerous large shipping firms invest in the very capital intensive LNG carriers. Most of the large banks are there to support their very good clients. However, this means that a big percentage of their budget (and resources in general) end up to the LNG carriers’ financing, i.e. not much budget left for the remaining sectors/shipping projects. So, when these banks are left with a limited budget to spend, they become very selective and of course their pricing goes up as the list of the waiting finance projects is significant.
But what about the alternative ways of financing for the small and medium size companies? Asian leasing has indeed filled part of the gap that was created with the traditional banks’ exit, however, again this is available for owners with larger fleets and bigger ticket sizes. Public markets have been quiet regarding shipping in general; bond markets again require significant size. Therefore, the small companies are left with the option of the so called alternative financing. Private equity and hedge funds do have the funds to invest, but this only happens when they get the return of capital that they require; given that this most of the times is a double digit figure, then the capital cost for the small/medium ship owners increases dramatically.
There are quite a few new European banks that have joined ship financing – whose pricing sits in between the one of the traditional banks and that of leasing – however, their current budget is nowhere near to filling the gap that was left after the departure of the big banks.
Therefore, small-medium size shipping companies struggle to find competitive finance terms. Someone may argue that this had always been the case, however, in today’s ship finance market it is evident that the financing of small-medium size shipping companies is not the banks’ first priority, which should not be the case given the performance of such companies during recent years. Indeed, many small-medium size companies have proved their top quality and professionalism by not only surviving the crisis but also by getting back into expansion mode. There are many ship-owning companies falling into this category. Indicatively, only in Greek shipping there are more than 150 companies that own 3-15 bulk carriers, of more than 28,000 dwt and younger than 17 years old. A big percentage of these companies are long standing and solid companies; however, face the above finance issues.
This is the clientele that will provide the bank with projects of good credit quality and at the right pricing and therefore should be the one attracting the attention of ship financiers if they wish to make their business efficient and dynamic again.
By George Laios
Deputy CEO, Intermodal Group
Compiled by:
Intermodal Research & Valuations
Analysts:
Ms Eva Tzima
George Panagopoulos
Disclaimer and legal disclosure: For any further queries please do not hesitate to contact our Research & Valuations Department. The information contained in this report has been obtained from various sources, as reported in the market. Intermodal Shipbrokers Co. believes such information to be factual and reliable without making guarantees regarding its accuracy or completeness. Whilst every care has been taken in the production of the above review, no liability can be accepted for any loss or damage incurred in any way whatsoever by any person who may seek to rely on the information and views contained in this material. This report is being produced for the internal use of the intended recipients only and no reproducing is allowed, without the prior written authorization of Intermodal Shipbrokers Co.
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Monday, 18 November 19
SUPRAMAX: IN THE INDONESIAN COAL BUSINESS, A 58KDWT VESSEL FIXED DELIVERY PHILIPPINES, REDELIVERY INDIA AT CLOSE TO $8,000 - BALTIC BRIEFING
Capesize
For most of the week the rates were nudging up under a flurry of activity in the Pacific as levels for the West Australia to China C5 ...
Saturday, 16 November 19
LIFE AFTER FOSSIL FUELS: THE DAYS OF OIL AND COAL TRANSPORTATION ARE NUMBERED - BALTIC EXCHANGE
With the world fiercely focused on a decarbonised future, fossil fuel movers and traders might rightly be reconsidering their future. But cast a wi ...
Saturday, 16 November 19
OIL MARKET REPORT: PAUSING TO REFLECT - IEA
Global oil demand in 3Q19 increased by 1.1 mb/d year-on-year (y-o-y), more than double the 435 kb/d seen in 2Q19. China’s demand increased by ...
Friday, 15 November 19
RISING ENERGY DEMAND IN SOUTHEAST ASIA TO BE MET AND SUPPORTED BY COAL - WORLD COAL
Last week the International Energy Agency (IEA) released its semi-annual Southeast Asia Energy Outlook report which outlines the latest insights in ...
Thursday, 14 November 19
EIA EXPECTS U.S. STEAM COAL EXPORTS TO FACE INCREASING COMPETITION FROM EASTERN EUROPEAN SOURCES
EIA expects total U.S. coal production in 2019 to total 698 million short tons (MMst), an 8% decrease from the 2018 level of 756 MMst. The decline ...
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- Global Coal Blending Company Limited - Australia
- Savvy Resources Ltd - HongKong
- Heidelberg Cement - Germany
- The University of Queensland
- Kideco Jaya Agung - Indonesia
- IHS Mccloskey Coal Group - USA
- Goldman Sachs - Singapore
- Central Java Power - Indonesia
- Coastal Gujarat Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Dalmia Cement Bharat India
- Australian Commodity Traders Exchange
- Malabar Cements Ltd - India
- Gujarat Electricity Regulatory Commission - India
- PNOC Exploration Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- SMC Global Power, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- AsiaOL BioFuels Corp., Philippines
- Georgia Ports Authority, United States
- Bukit Makmur.PT - Indonesia
- Formosa Plastics Group - Taiwan
- Semirara Mining Corp, Philippines
- Antam Resourcindo - Indonesia
- GMR Energy Limited - India
- Commonwealth Bank - Australia
- Bukit Baiduri Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Energy Link Ltd, New Zealand
- Indogreen Group - Indonesia
- CIMB Investment Bank - Malaysia
- Ambuja Cements Ltd - India
- Power Finance Corporation Ltd., India
- Petron Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Tata Chemicals Ltd - India
- The Treasury - Australian Government
- Interocean Group of Companies - India
- Wilmar Investment Holdings
- Merrill Lynch Commodities Europe
- Oldendorff Carriers - Singapore
- Ministry of Mines - Canada
- Pipit Mutiara Jaya. PT, Indonesia
- Energy Development Corp, Philippines
- Aditya Birla Group - India
- Tamil Nadu electricity Board
- Ceylon Electricity Board - Sri Lanka
- Larsen & Toubro Limited - India
- Coal and Oil Company - UAE
- Star Paper Mills Limited - India
- GVK Power & Infra Limited - India
- Madhucon Powers Ltd - India
- Salva Resources Pvt Ltd - India
- Bharathi Cement Corporation - India
- Uttam Galva Steels Limited - India
- Asmin Koalindo Tuhup - Indonesia
- ASAPP Information Group - India
- Sakthi Sugars Limited - India
- Vedanta Resources Plc - India
- Sinarmas Energy and Mining - Indonesia
- VISA Power Limited - India
- Altura Mining Limited, Indonesia
- Coalindo Energy - Indonesia
- Baramulti Group, Indonesia
- Romanian Commodities Exchange
- Rio Tinto Coal - Australia
- Chamber of Mines of South Africa
- Indonesian Coal Mining Association
- Jaiprakash Power Ventures ltd
- Eastern Coal Council - USA
- Sarangani Energy Corporation, Philippines
- New Zealand Coal & Carbon
- SN Aboitiz Power Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- India Bulls Power Limited - India
- London Commodity Brokers - England
- Maheswari Brothers Coal Limited - India
- Bulk Trading Sa - Switzerland
- Semirara Mining and Power Corporation, Philippines
- CNBM International Corporation - China
- Mercator Lines Limited - India
- Kapuas Tunggal Persada - Indonesia
- Cigading International Bulk Terminal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Medco Energi Mining Internasional
- Ministry of Finance - Indonesia
- Makarim & Taira - Indonesia
- Siam City Cement PLC, Thailand
- Orica Mining Services - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Directorate Of Revenue Intelligence - India
- Alfred C Toepfer International GmbH - Germany
- Banpu Public Company Limited - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Australian Coal Association
- Sojitz Corporation - Japan
- Toyota Tsusho Corporation, Japan
- PowerSource Philippines DevCo
- Xindia Steels Limited - India
- Electricity Generating Authority of Thailand
- Bhatia International Limited - India
- Lanco Infratech Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Thai Mozambique Logistica
- White Energy Company Limited
- Bahari Cakrawala Sebuku - Indonesia
- Samtan Co., Ltd - South Korea
- Carbofer General Trading SA - India
- Sree Jayajothi Cements Limited - India
- Standard Chartered Bank - UAE
- Karaikal Port Pvt Ltd - India
- Meralco Power Generation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Wood Mackenzie - Singapore
- PTC India Limited - India
- Orica Australia Pty. Ltd.
- Krishnapatnam Port Company Ltd. - India
- Price Waterhouse Coopers - Russia
- Borneo Indobara - Indonesia
- Electricity Authority, New Zealand
- Global Business Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Sindya Power Generating Company Private Ltd
- Kobexindo Tractors - Indoneisa
- Straits Asia Resources Limited - Singapore
- Indian Oil Corporation Limited
- GAC Shipping (India) Pvt Ltd
- Attock Cement Pakistan Limited
- Posco Energy - South Korea
- Anglo American - United Kingdom
- Jindal Steel & Power Ltd - India
- Agrawal Coal Company - India
- LBH Netherlands Bv - Netherlands
- Indika Energy - Indonesia
- Vizag Seaport Private Limited - India
- Videocon Industries ltd - India
- SMG Consultants - Indonesia
- Africa Commodities Group - South Africa
- Bhoruka Overseas - Indonesia
- Parry Sugars Refinery, India
- Mintek Dendrill Indonesia
- Parliament of New Zealand
- Mercuria Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Indo Tambangraya Megah - Indonesia
- ICICI Bank Limited - India
- Indian Energy Exchange, India
- Globalindo Alam Lestari - Indonesia
- Planning Commission, India
- TeaM Sual Corporation - Philippines
- Directorate General of MIneral and Coal - Indonesia
- Aboitiz Power Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Siam City Cement - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- McConnell Dowell - Australia
- Riau Bara Harum - Indonesia
- Sical Logistics Limited - India
- Independent Power Producers Association of India
- Bukit Asam (Persero) Tbk - Indonesia
- Port Waratah Coal Services - Australia
- Bayan Resources Tbk. - Indonesia
- Minerals Council of Australia
- Latin American Coal - Colombia
- Eastern Energy - Thailand
- Bhushan Steel Limited - India
- Grasim Industreis Ltd - India
- Binh Thuan Hamico - Vietnam
- Singapore Mercantile Exchange
- Therma Luzon, Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Mjunction Services Limited - India
- Renaissance Capital - South Africa
- Kartika Selabumi Mining - Indonesia
- The State Trading Corporation of India Ltd
- Petrochimia International Co. Ltd.- Taiwan
- San Jose City I Power Corp, Philippines
- South Luzon Thermal Energy Corporation
- Marubeni Corporation - India
- Essar Steel Hazira Ltd - India
- Trasteel International SA, Italy
- Kumho Petrochemical, South Korea
- European Bulk Services B.V. - Netherlands
- Barasentosa Lestari - Indonesia
- Kaltim Prima Coal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Manunggal Multi Energi - Indonesia
- Bangladesh Power Developement Board
- Gujarat Sidhee Cement - India
- Metalloyd Limited - United Kingdom
- Economic Council, Georgia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- IEA Clean Coal Centre - UK
- Edison Trading Spa - Italy
- Ministry of Transport, Egypt
- Cement Manufacturers Association - India
- Thiess Contractors Indonesia
- Kepco SPC Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Kalimantan Lumbung Energi - Indonesia
- International Coal Ventures Pvt Ltd - India
- MS Steel International - UAE
- Pendopo Energi Batubara - Indonesia
- Global Green Power PLC Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Central Electricity Authority - India
- Jorong Barutama Greston.PT - Indonesia
- Deloitte Consulting - India
- Holcim Trading Pte Ltd - Singapore
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