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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, 21 October 19
SHIPPERS CHANGE COURSE AS FUEL RULES TARGET SULPHUR EMISSIONS - WOOD MACKENZIE
The International Maritime Organization (IMO), the industry’s regulator, will require all ships to reduce the level of sulphur in their engin ...
Monday, 21 October 19
COAL TO PLAY SIGNIFICANT ROLE IN SOUTH AFRICA POWER MIX - MINISTER, REUTERS REPORTED
South Africa’s plans for additional power generation over the next decade will involve a variety of energy sources, with coal still playing a ...
Monday, 21 October 19
ULTRAMAX: IN ASIA, TRIPS FROM THE SINGAPORE AREA WERE PAYING BETWEEN $14,000 AND $16,000, DEPENDING ON THE VESSEL SIZE AND DURATION - BALTIC BRIEFING
Capesize
The market traded in a relatively stable supported manner in the Pacific this week while the Atlantic experienced weakening turbulence ...
Friday, 18 October 19
WHY CRUDE TANKER RATES JUST FELL (HALFWAY) BACK TO EARTH - FREIGHT WAVES
Panic drove crude-tanker rates up, very briefly, to mind-bogglingly high assessed levels of around $300,000 per day. Now, the fear factor has been ...
Friday, 18 October 19
SHORT TERM STRENGTH FOR OZ COMMODITIES - BALTIC BRIEFING
Volatility in the global commodity markets is not expected to unduly rattle Australia’s commodity outlook through 2020, but the 2021 picture ...
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- San Jose City I Power Corp, Philippines
- Mercator Lines Limited - India
- Indonesian Coal Mining Association
- Larsen & Toubro Limited - India
- LBH Netherlands Bv - Netherlands
- Cement Manufacturers Association - India
- Lanco Infratech Ltd - India
- Formosa Plastics Group - Taiwan
- Chettinad Cement Corporation Ltd - India
- Wood Mackenzie - Singapore
- Minerals Council of Australia
- Interocean Group of Companies - India
- Krishnapatnam Port Company Ltd. - India
- Malabar Cements Ltd - India
- Leighton Contractors Pty Ltd - Australia
- European Bulk Services B.V. - Netherlands
- Borneo Indobara - Indonesia
- PTC India Limited - India
- Vedanta Resources Plc - India
- SN Aboitiz Power Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Globalindo Alam Lestari - Indonesia
- Romanian Commodities Exchange
- Trasteel International SA, Italy
- Offshore Bulk Terminal Pte Ltd, Singapore
- Orica Mining Services - Indonesia
- Baramulti Group, Indonesia
- Renaissance Capital - South Africa
- Agrawal Coal Company - India
- Pendopo Energi Batubara - Indonesia
- Kideco Jaya Agung - Indonesia
- McConnell Dowell - Australia
- Therma Luzon, Inc, Philippines
- Port Waratah Coal Services - Australia
- Siam City Cement - Thailand
- Global Business Power Corporation, Philippines
- GMR Energy Limited - India
- Savvy Resources Ltd - HongKong
- Coal and Oil Company - UAE
- IHS Mccloskey Coal Group - USA
- Kaltim Prima Coal - Indonesia
- Attock Cement Pakistan Limited
- Rio Tinto Coal - Australia
- Medco Energi Mining Internasional
- Karbindo Abesyapradhi - Indoneisa
- Binh Thuan Hamico - Vietnam
- Kartika Selabumi Mining - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- London Commodity Brokers - England
- Bhushan Steel Limited - India
- Global Coal Blending Company Limited - Australia
- GVK Power & Infra Limited - India
- Karaikal Port Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- South Luzon Thermal Energy Corporation
- Economic Council, Georgia
- Thai Mozambique Logistica
- Sindya Power Generating Company Private Ltd
- Antam Resourcindo - Indonesia
- Banpu Public Company Limited - Thailand
- Mjunction Services Limited - India
- Mintek Dendrill Indonesia
- Energy Link Ltd, New Zealand
- Meralco Power Generation, Philippines
- Posco Energy - South Korea
- Kepco SPC Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Grasim Industreis Ltd - India
- Bharathi Cement Corporation - India
- Sinarmas Energy and Mining - Indonesia
- CNBM International Corporation - China
- Uttam Galva Steels Limited - India
- Ministry of Transport, Egypt
- White Energy Company Limited
- Kapuas Tunggal Persada - Indonesia
- Ministry of Mines - Canada
- Videocon Industries ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Madhucon Powers Ltd - India
- Singapore Mercantile Exchange
- Miang Besar Coal Terminal - Indonesia
- Aditya Birla Group - India
- Sical Logistics Limited - India
- ASAPP Information Group - India
- GN Power Mariveles Coal Plant, Philippines
- Coalindo Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sarangani Energy Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Altura Mining Limited, Indonesia
- SMG Consultants - Indonesia
- Jindal Steel & Power Ltd - India
- Coastal Gujarat Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Carbofer General Trading SA - India
- Semirara Mining and Power Corporation, Philippines
- Bangladesh Power Developement Board
- Thiess Contractors Indonesia
- TeaM Sual Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Essar Steel Hazira Ltd - India
- Orica Australia Pty. Ltd.
- Price Waterhouse Coopers - Russia
- Kalimantan Lumbung Energi - Indonesia
- Indogreen Group - Indonesia
- Commonwealth Bank - Australia
- Rashtriya Ispat Nigam Limited - India
- Barasentosa Lestari - Indonesia
- Star Paper Mills Limited - India
- Kobexindo Tractors - Indoneisa
- Simpson Spence & Young - Indonesia
- Iligan Light & Power Inc, Philippines
- Independent Power Producers Association of India
- Mercuria Energy - Indonesia
- India Bulls Power Limited - India
- Ambuja Cements Ltd - India
- SMC Global Power, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Indian Oil Corporation Limited
- Power Finance Corporation Ltd., India
- Siam City Cement PLC, Thailand
- Bukit Makmur.PT - Indonesia
- Manunggal Multi Energi - Indonesia
- Straits Asia Resources Limited - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Tamil Nadu electricity Board
- Ministry of Finance - Indonesia
- Samtan Co., Ltd - South Korea
- Sojitz Corporation - Japan
- Jaiprakash Power Ventures ltd
- Dalmia Cement Bharat India
- Xindia Steels Limited - India
- Merrill Lynch Commodities Europe
- Indika Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Toyota Tsusho Corporation, Japan
- Ind-Barath Power Infra Limited - India
- Edison Trading Spa - Italy
- VISA Power Limited - India
- Electricity Generating Authority of Thailand
- Bayan Resources Tbk. - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Indian Energy Exchange, India
- Africa Commodities Group - South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Electricity Authority, New Zealand
- Standard Chartered Bank - UAE
- Tata Chemicals Ltd - India
- Kumho Petrochemical, South Korea
- Indo Tambangraya Megah - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Parliament of New Zealand
- Metalloyd Limited - United Kingdom
- Bhatia International Limited - India
- The Treasury - Australian Government
- Aboitiz Power Corporation - Philippines
- Deloitte Consulting - India
- Asmin Koalindo Tuhup - Indonesia
- PowerSource Philippines DevCo
- PNOC Exploration Corporation - Philippines
- Australian Coal Association
- ICICI Bank Limited - India
- Sakthi Sugars Limited - India
- Directorate Of Revenue Intelligence - India
- Anglo American - United Kingdom
- Chamber of Mines of South Africa
- Planning Commission, India
- Petron Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- The State Trading Corporation of India Ltd
- Central Java Power - Indonesia
- Energy Development Corp, Philippines
- Australian Commodity Traders Exchange
- MS Steel International - UAE
- Gujarat Sidhee Cement - India
- Wilmar Investment Holdings
- Meenaskhi Energy Private Limited - India
- CIMB Investment Bank - Malaysia
- Jorong Barutama Greston.PT - Indonesia
- Central Electricity Authority - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Parry Sugars Refinery, India
- Bukit Baiduri Energy - Indonesia
- The University of Queensland
- Eastern Energy - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Georgia Ports Authority, United States
- Salva Resources Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Semirara Mining Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Global Green Power PLC Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Eastern Coal Council - USA
- Riau Bara Harum - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Billiton Holdings Pty Ltd - Australia
- International Coal Ventures Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Maheswari Brothers Coal Limited - India
- Goldman Sachs - Singapore
- Vizag Seaport Private Limited - India
- New Zealand Coal & Carbon
- IEA Clean Coal Centre - UK
- Heidelberg Cement - Germany
- AsiaOL BioFuels Corp., Philippines
- Makarim & Taira - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Marubeni Corporation - India
- Latin American Coal - Colombia
- Holcim Trading Pte Ltd - Singapore
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