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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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Tuesday, 17 September 19
THE DRY BULK FREIGHT MARKET IS ALREADY ON A DOWNWARD CORRECTION - ALLIED
Here we are again, just a breath before the final quarter of the year. Under typical circumstances and on the basis of what we have seen during the ...
Monday, 16 September 19
COLOMBIAN COAL PRODUCTION TO FALL 5% THIS YEAR, MINING GROUP SAYS - REUTERS
Colombia’s coal production will decline to around 80 million tonnes in 2019, nearly 5% below last year’s, because of low prices and dro ...
Monday, 16 September 19
THE COAL-D SHOULDER? - BALTIC EXCHANGE
Good fortune and the number 13 don’t usually go hand in hand, but when it comes to coal, 2013 actually seems to have been the commodity&rsquo ...
Monday, 16 September 19
SCRUBBERS AND FUEL PROFIT SHARE CLAUSES - CLYDE&CO
From 1 January 2020, Regulation 14 of MARPOL Annex VI provides that the sulphur content in fuel oil used on board ships shall be reduced from a max ...
Monday, 16 September 19
KOREA SOUTH-EAST POWER INVITES BIDS FOR MAX 1,290,000 METRIC TONS OF STEAMING COAL
COALspot.com: South Korea’s Korea East-West Power Co. Ltd has issued an international tender for total 1,290,000 Metric Tons steam coal.
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- Simpson Spence & Young - Indonesia
- Ministry of Finance - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Eastern Coal Council - USA
- SMC Global Power, Philippines
- McConnell Dowell - Australia
- Miang Besar Coal Terminal - Indonesia
- White Energy Company Limited
- GAC Shipping (India) Pvt Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sinarmas Energy and Mining - Indonesia
- Bukit Makmur.PT - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Coastal Gujarat Power Limited - India
- Merrill Lynch Commodities Europe
- Gujarat Electricity Regulatory Commission - India
- CIMB Investment Bank - Malaysia
- Directorate General of MIneral and Coal - Indonesia
- Uttam Galva Steels Limited - India
- Rio Tinto Coal - Australia
- Renaissance Capital - South Africa
- Goldman Sachs - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Orica Australia Pty. Ltd.
- Edison Trading Spa - Italy
- Agrawal Coal Company - India
- Krishnapatnam Port Company Ltd. - India
- Xindia Steels Limited - India
- GMR Energy Limited - India
- Karaikal Port Pvt Ltd - India
- Deloitte Consulting - India
- The Treasury - Australian Government
- Mjunction Services Limited - India
- Central Electricity Authority - India
- Bhoruka Overseas - Indonesia
- CNBM International Corporation - China
- Bhatia International Limited - India
- Tata Chemicals Ltd - India
- Medco Energi Mining Internasional
- Indian Energy Exchange, India
- PTC India Limited - India
- Singapore Mercantile Exchange
- Sakthi Sugars Limited - India
- Global Coal Blending Company Limited - Australia
- Timah Investasi Mineral - Indoneisa
- PNOC Exploration Corporation - Philippines
- Vedanta Resources Plc - India
- Sindya Power Generating Company Private Ltd
- Borneo Indobara - Indonesia
- Globalindo Alam Lestari - Indonesia
- Indonesian Coal Mining Association
- SN Aboitiz Power Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Global Green Power PLC Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Latin American Coal - Colombia
- Tamil Nadu electricity Board
- Port Waratah Coal Services - Australia
- Vizag Seaport Private Limited - India
- OPG Power Generation Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Kideco Jaya Agung - Indonesia
- Planning Commission, India
- Sical Logistics Limited - India
- Africa Commodities Group - South Africa
- Bhushan Steel Limited - India
- Jindal Steel & Power Ltd - India
- Parliament of New Zealand
- Iligan Light & Power Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Pendopo Energi Batubara - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Power Finance Corporation Ltd., India
- Ind-Barath Power Infra Limited - India
- Chettinad Cement Corporation Ltd - India
- Carbofer General Trading SA - India
- Star Paper Mills Limited - India
- Kepco SPC Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- International Coal Ventures Pvt Ltd - India
- Bangladesh Power Developement Board
- Mercator Lines Limited - India
- Intertek Mineral Services - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Economic Council, Georgia
- Rashtriya Ispat Nigam Limited - India
- Salva Resources Pvt Ltd - India
- The University of Queensland
- ICICI Bank Limited - India
- Metalloyd Limited - United Kingdom
- Lanco Infratech Ltd - India
- LBH Netherlands Bv - Netherlands
- Marubeni Corporation - India
- Mercuria Energy - Indonesia
- Ambuja Cements Ltd - India
- Coal and Oil Company - UAE
- Georgia Ports Authority, United States
- Interocean Group of Companies - India
- Madhucon Powers Ltd - India
- Baramulti Group, Indonesia
- Electricity Generating Authority of Thailand
- Energy Development Corp, Philippines
- Kaltim Prima Coal - Indonesia
- Attock Cement Pakistan Limited
- Manunggal Multi Energi - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Australian Commodity Traders Exchange
- Indian Oil Corporation Limited
- AsiaOL BioFuels Corp., Philippines
- Ministry of Transport, Egypt
- Heidelberg Cement - Germany
- PowerSource Philippines DevCo
- Barasentosa Lestari - Indonesia
- Petron Corporation, Philippines
- Makarim & Taira - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jaiprakash Power Ventures ltd
- Samtan Co., Ltd - South Korea
- IEA Clean Coal Centre - UK
- London Commodity Brokers - England
- TeaM Sual Corporation - Philippines
- Aditya Birla Group - India
- Petrochimia International Co. Ltd.- Taiwan
- Siam City Cement - Thailand
- Kobexindo Tractors - Indoneisa
- Toyota Tsusho Corporation, Japan
- Malabar Cements Ltd - India
- Eastern Energy - Thailand
- Cement Manufacturers Association - India
- Wood Mackenzie - Singapore
- Ceylon Electricity Board - Sri Lanka
- Pipit Mutiara Jaya. PT, Indonesia
- Coalindo Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Global Business Power Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Jorong Barutama Greston.PT - Indonesia
- GVK Power & Infra Limited - India
- Semirara Mining and Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Sojitz Corporation - Japan
- Commonwealth Bank - Australia
- Trasteel International SA, Italy
- Mintek Dendrill Indonesia
- The State Trading Corporation of India Ltd
- Kalimantan Lumbung Energi - Indonesia
- Maheswari Brothers Coal Limited - India
- IHS Mccloskey Coal Group - USA
- Maharashtra Electricity Regulatory Commission - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bulk Trading Sa - Switzerland
- Dalmia Cement Bharat India
- Karbindo Abesyapradhi - Indoneisa
- ASAPP Information Group - India
- Minerals Council of Australia
- Directorate Of Revenue Intelligence - India
- Meralco Power Generation, Philippines
- Electricity Authority, New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- European Bulk Services B.V. - Netherlands
- Ministry of Mines - Canada
- New Zealand Coal & Carbon
- India Bulls Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- VISA Power Limited - India
- Bukit Baiduri Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Anglo American - United Kingdom
- Bank of Tokyo Mitsubishi UFJ Ltd
- Holcim Trading Pte Ltd - Singapore
- Siam City Cement PLC, Thailand
- Price Waterhouse Coopers - Russia
- Bayan Resources Tbk. - Indonesia
- Indika Energy - Indonesia
- Oldendorff Carriers - Singapore
- Indogreen Group - Indonesia
- Parry Sugars Refinery, India
- Grasim Industreis Ltd - India
- Sarangani Energy Corporation, Philippines
- MS Steel International - UAE
- Thiess Contractors Indonesia
- Wilmar Investment Holdings
- Chamber of Mines of South Africa
- Therma Luzon, Inc, Philippines
- Riau Bara Harum - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Binh Thuan Hamico - Vietnam
- Gujarat Mineral Development Corp Ltd - India
- Australian Coal Association
- San Jose City I Power Corp, Philippines
- Orica Mining Services - Indonesia
- Videocon Industries ltd - India
- Straits Asia Resources Limited - Singapore
- Gujarat Sidhee Cement - India
- Vijayanagar Sugar Pvt Ltd - India
- Independent Power Producers Association of India
- Altura Mining Limited, Indonesia
- Bharathi Cement Corporation - India
- Semirara Mining Corp, Philippines
- Central Java Power - Indonesia
- SMG Consultants - Indonesia
- Essar Steel Hazira Ltd - India
- Formosa Plastics Group - Taiwan
- Larsen & Toubro Limited - India
- Antam Resourcindo - Indonesia
- Thai Mozambique Logistica
- Kumho Petrochemical, South Korea
- Romanian Commodities Exchange
- Banpu Public Company Limited - Thailand
- Sree Jayajothi Cements Limited - India
- Posco Energy - South Korea
- Aboitiz Power Corporation - Philippines
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