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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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Thursday, 24 October 19
AUSTRALIA'S HOPES TO EXPAND COAL EXPORTS IN SOUTH-EAST ASIA 'DELUSIONAL', EXPERTS SAY - THE GUARDIAN
The number of new coal-fired power plants starting construction across south-east Asia has fallen markedly over the past two years as Australia has ...
Thursday, 24 October 19
PANAMAX: NEGATIVE SENTIMENT IN THE MARKET AS IT CONTINUES TO WEAKEN - FEARNLEYS
Capesize
The market has continued to slide the last week, as lack of fresh requirements and a slight oversupply of tonnage heading towards Sout ...
Wednesday, 23 October 19
CHINA'S 2019 COAL IMPORTS SET TO RISE MORE THAN 10%: ANALYSTS - REUTERS
China, the world’s top coal buyer, is on track to boost imports of the fuel by more than 10% this year, traders and analysts said on Tuesday, ...
Wednesday, 23 October 19
SHIPPING MARKET INSIGHT - INTERMODAL
Moving closer to the end of the year, we are facing what the market was expecting for quite a while, the ship repair sector booming with the shipya ...
Tuesday, 22 October 19
DRY BULK: DESPITE THE DOWNWARD CORRECTION NOTED OVER THE PAST MONTH, RATES ARE STILL HOLDING OFF AT FAVORABLE LEVELS - ALLIED SHIPPING
Despite the downward correction that has been noted in the dry bulk market over the past month, rates are still holding off at favorable levels. Ev ...
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- Timah Investasi Mineral - Indoneisa
- Australian Coal Association
- Sical Logistics Limited - India
- Goldman Sachs - Singapore
- Karaikal Port Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Vizag Seaport Private Limited - India
- Price Waterhouse Coopers - Russia
- Parry Sugars Refinery, India
- MS Steel International - UAE
- Rashtriya Ispat Nigam Limited - India
- Thai Mozambique Logistica
- Global Green Power PLC Corporation, Philippines
- India Bulls Power Limited - India
- Star Paper Mills Limited - India
- Semirara Mining Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Riau Bara Harum - Indonesia
- Sindya Power Generating Company Private Ltd
- Cigading International Bulk Terminal - Indonesia
- Bukit Makmur.PT - Indonesia
- Altura Mining Limited, Indonesia
- Petron Corporation, Philippines
- Vedanta Resources Plc - India
- Therma Luzon, Inc, Philippines
- Maheswari Brothers Coal Limited - India
- SN Aboitiz Power Inc, Philippines
- Mercuria Energy - Indonesia
- The Treasury - Australian Government
- Eastern Energy - Thailand
- Thiess Contractors Indonesia
- Jindal Steel & Power Ltd - India
- Indonesian Coal Mining Association
- Ambuja Cements Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Eastern Coal Council - USA
- Singapore Mercantile Exchange
- Jorong Barutama Greston.PT - Indonesia
- White Energy Company Limited
- Oldendorff Carriers - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Trasteel International SA, Italy
- IHS Mccloskey Coal Group - USA
- Siam City Cement - Thailand
- Carbofer General Trading SA - India
- Kohat Cement Company Ltd. - Pakistan
- Banpu Public Company Limited - Thailand
- CIMB Investment Bank - Malaysia
- Gujarat Sidhee Cement - India
- Ceylon Electricity Board - Sri Lanka
- Alfred C Toepfer International GmbH - Germany
- Central Java Power - Indonesia
- European Bulk Services B.V. - Netherlands
- Uttam Galva Steels Limited - India
- IEA Clean Coal Centre - UK
- Pipit Mutiara Jaya. PT, Indonesia
- Bhatia International Limited - India
- OPG Power Generation Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Edison Trading Spa - Italy
- Power Finance Corporation Ltd., India
- Bhoruka Overseas - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Siam City Cement PLC, Thailand
- Standard Chartered Bank - UAE
- Intertek Mineral Services - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Kobexindo Tractors - Indoneisa
- Grasim Industreis Ltd - India
- Independent Power Producers Association of India
- Neyveli Lignite Corporation Ltd, - India
- Commonwealth Bank - Australia
- GAC Shipping (India) Pvt Ltd
- Indika Energy - Indonesia
- Meralco Power Generation, Philippines
- Australian Commodity Traders Exchange
- Ministry of Finance - Indonesia
- ASAPP Information Group - India
- SMG Consultants - Indonesia
- Formosa Plastics Group - Taiwan
- Merrill Lynch Commodities Europe
- Vijayanagar Sugar Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Africa Commodities Group - South Africa
- AsiaOL BioFuels Corp., Philippines
- Electricity Generating Authority of Thailand
- Binh Thuan Hamico - Vietnam
- Sarangani Energy Corporation, Philippines
- ICICI Bank Limited - India
- GMR Energy Limited - India
- Kaltim Prima Coal - Indonesia
- Parliament of New Zealand
- Cement Manufacturers Association - India
- Malabar Cements Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Toyota Tsusho Corporation, Japan
- Metalloyd Limited - United Kingdom
- Manunggal Multi Energi - Indonesia
- Indian Oil Corporation Limited
- Bahari Cakrawala Sebuku - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Attock Cement Pakistan Limited
- Agrawal Coal Company - India
- Energy Development Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Electricity Authority, New Zealand
- GVK Power & Infra Limited - India
- TeaM Sual Corporation - Philippines
- Central Electricity Authority - India
- Simpson Spence & Young - Indonesia
- Straits Asia Resources Limited - Singapore
- Kartika Selabumi Mining - Indonesia
- Port Waratah Coal Services - Australia
- Sojitz Corporation - Japan
- Bangladesh Power Developement Board
- Indian Energy Exchange, India
- Madhucon Powers Ltd - India
- Sakthi Sugars Limited - India
- Ministry of Mines - Canada
- Deloitte Consulting - India
- Planning Commission, India
- Renaissance Capital - South Africa
- The University of Queensland
- Borneo Indobara - Indonesia
- London Commodity Brokers - England
- Dalmia Cement Bharat India
- TNB Fuel Sdn Bhd - Malaysia
- Makarim & Taira - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Krishnapatnam Port Company Ltd. - India
- Tamil Nadu electricity Board
- Kepco SPC Power Corporation, Philippines
- Global Business Power Corporation, Philippines
- PowerSource Philippines DevCo
- Marubeni Corporation - India
- New Zealand Coal & Carbon
- Mintek Dendrill Indonesia
- Interocean Group of Companies - India
- Wood Mackenzie - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Jaiprakash Power Ventures ltd
- Semirara Mining and Power Corporation, Philippines
- Bharathi Cement Corporation - India
- SMC Global Power, Philippines
- Romanian Commodities Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Electricity Regulatory Commission - India
- McConnell Dowell - Australia
- Heidelberg Cement - Germany
- Wilmar Investment Holdings
- Barasentosa Lestari - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Orica Mining Services - Indonesia
- CNBM International Corporation - China
- Karbindo Abesyapradhi - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bulk Trading Sa - Switzerland
- Salva Resources Pvt Ltd - India
- Bhushan Steel Limited - India
- PTC India Limited - India
- Lanco Infratech Ltd - India
- Coalindo Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Chettinad Cement Corporation Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mercator Lines Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- San Jose City I Power Corp, Philippines
- Orica Australia Pty. Ltd.
- South Luzon Thermal Energy Corporation
- Bukit Baiduri Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Larsen & Toubro Limited - India
- Aboitiz Power Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Rio Tinto Coal - Australia
- Aditya Birla Group - India
- Indogreen Group - Indonesia
- LBH Netherlands Bv - Netherlands
- Kumho Petrochemical, South Korea
- Videocon Industries ltd - India
- Savvy Resources Ltd - HongKong
- Indo Tambangraya Megah - Indonesia
- Baramulti Group, Indonesia
- Coal and Oil Company - UAE
- Samtan Co., Ltd - South Korea
- Sree Jayajothi Cements Limited - India
- Anglo American - United Kingdom
- Sinarmas Energy and Mining - Indonesia
- Tata Chemicals Ltd - India
- Pendopo Energi Batubara - Indonesia
- Latin American Coal - Colombia
- Medco Energi Mining Internasional
- Mjunction Services Limited - India
- Energy Link Ltd, New Zealand
- Posco Energy - South Korea
- Billiton Holdings Pty Ltd - Australia
- VISA Power Limited - India
- The State Trading Corporation of India Ltd
- Minerals Council of Australia
- Ministry of Transport, Egypt
- Kideco Jaya Agung - Indonesia
- Ind-Barath Power Infra Limited - India
- Economic Council, Georgia
- Meenaskhi Energy Private Limited - India
- Globalindo Alam Lestari - Indonesia
- Chamber of Mines of South Africa
- Xindia Steels Limited - India
- Global Coal Blending Company Limited - Australia
- Asmin Koalindo Tuhup - Indonesia
- Georgia Ports Authority, United States
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