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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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Sunday, 15 September 19
SUPRAMAX / ULTRAMAX: MORE STEMS WERE NOTICED GOING TO VIETNAM FROM INDONESIA - BALTIC BRIEFING
Capesize
Overall it was a negative week for the Capesize market, with many routes losing ground. A limited amount of time charter appeare ...
Wednesday, 11 September 19
THE INDONESIAN COAL PRICE REFERENCE FELL HEAVILY IN SEPTEMBER
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down the benchmark price of Indonesian thermal ...
Wednesday, 11 September 19
SHIPPING MARKET INSIGHT - INTERMODAL
We are going through one of the rare instances where we see optimism building in the dry bulk industry and, as the momentum is still going, the bel ...
Monday, 09 September 19
INDIAN COMPANIES READY TO INVEST IN DEVELOPMENT OF NEW COAL DEPOSITS IN RUSSIA'S YAKUTIA - TASS
Indian metallurgical companies, which received trial batches of coal from Kolmar mining company, are satisfied with the quality of the products and ...
Monday, 09 September 19
COLOMBIA COAL OUTPUT DOWN YEAR-ON-YEAR IN 2ND QUARTER - REUTERS
Colombia, the world’s fifth-largest exporter of coal, produced 18.9 million tonnes of the fuel in the second quarter, down 4.5% from the same ...
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- Rashtriya Ispat Nigam Limited - India
- VISA Power Limited - India
- Electricity Generating Authority of Thailand
- Coal and Oil Company - UAE
- Price Waterhouse Coopers - Russia
- Merrill Lynch Commodities Europe
- Simpson Spence & Young - Indonesia
- ICICI Bank Limited - India
- Aboitiz Power Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Larsen & Toubro Limited - India
- Bukit Makmur.PT - Indonesia
- Standard Chartered Bank - UAE
- Indonesian Coal Mining Association
- Bank of Tokyo Mitsubishi UFJ Ltd
- OPG Power Generation Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- PNOC Exploration Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- SMC Global Power, Philippines
- Renaissance Capital - South Africa
- Leighton Contractors Pty Ltd - Australia
- AsiaOL BioFuels Corp., Philippines
- CNBM International Corporation - China
- Mjunction Services Limited - India
- Intertek Mineral Services - Indonesia
- Energy Link Ltd, New Zealand
- TNB Fuel Sdn Bhd - Malaysia
- The State Trading Corporation of India Ltd
- GN Power Mariveles Coal Plant, Philippines
- Lanco Infratech Ltd - India
- The Treasury - Australian Government
- Ministry of Mines - Canada
- Kartika Selabumi Mining - Indonesia
- Borneo Indobara - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Energy Development Corp, Philippines
- PTC India Limited - India
- CIMB Investment Bank - Malaysia
- Altura Mining Limited, Indonesia
- Antam Resourcindo - Indonesia
- Coastal Gujarat Power Limited - India
- Directorate Of Revenue Intelligence - India
- Mercator Lines Limited - India
- Planning Commission, India
- Globalindo Alam Lestari - Indonesia
- Cement Manufacturers Association - India
- Barasentosa Lestari - Indonesia
- Eastern Energy - Thailand
- Medco Energi Mining Internasional
- Petron Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- IEA Clean Coal Centre - UK
- Sojitz Corporation - Japan
- SN Aboitiz Power Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Meenaskhi Energy Private Limited - India
- Videocon Industries ltd - India
- Jaiprakash Power Ventures ltd
- Kepco SPC Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Anglo American - United Kingdom
- Pendopo Energi Batubara - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- South Luzon Thermal Energy Corporation
- Kalimantan Lumbung Energi - Indonesia
- Maheswari Brothers Coal Limited - India
- Straits Asia Resources Limited - Singapore
- Billiton Holdings Pty Ltd - Australia
- Mercuria Energy - Indonesia
- Mintek Dendrill Indonesia
- Trasteel International SA, Italy
- The University of Queensland
- Banpu Public Company Limited - Thailand
- Vizag Seaport Private Limited - India
- Formosa Plastics Group - Taiwan
- Dalmia Cement Bharat India
- Kideco Jaya Agung - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indo Tambangraya Megah - Indonesia
- Bangladesh Power Developement Board
- Asmin Koalindo Tuhup - Indonesia
- IHS Mccloskey Coal Group - USA
- Vedanta Resources Plc - India
- San Jose City I Power Corp, Philippines
- Ministry of Transport, Egypt
- Singapore Mercantile Exchange
- Riau Bara Harum - Indonesia
- Indika Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Bharathi Cement Corporation - India
- Ind-Barath Power Infra Limited - India
- Carbofer General Trading SA - India
- Thai Mozambique Logistica
- Thiess Contractors Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Edison Trading Spa - Italy
- Indogreen Group - Indonesia
- Bulk Trading Sa - Switzerland
- Tamil Nadu electricity Board
- New Zealand Coal & Carbon
- Global Green Power PLC Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Electricity Regulatory Commission - India
- Grasim Industreis Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Meralco Power Generation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Chamber of Mines of South Africa
- Kobexindo Tractors - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Oldendorff Carriers - Singapore
- Toyota Tsusho Corporation, Japan
- Therma Luzon, Inc, Philippines
- Eastern Coal Council - USA
- Essar Steel Hazira Ltd - India
- Economic Council, Georgia
- White Energy Company Limited
- Makarim & Taira - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Ambuja Cements Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- International Coal Ventures Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Chettinad Cement Corporation Ltd - India
- Deloitte Consulting - India
- Parliament of New Zealand
- Metalloyd Limited - United Kingdom
- Sarangani Energy Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Sakthi Sugars Limited - India
- Goldman Sachs - Singapore
- Baramulti Group, Indonesia
- Attock Cement Pakistan Limited
- Semirara Mining and Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Karaikal Port Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Marubeni Corporation - India
- Independent Power Producers Association of India
- Wilmar Investment Holdings
- Manunggal Multi Energi - Indonesia
- SMG Consultants - Indonesia
- Port Waratah Coal Services - Australia
- Timah Investasi Mineral - Indoneisa
- Orica Mining Services - Indonesia
- Rio Tinto Coal - Australia
- Aditya Birla Group - India
- McConnell Dowell - Australia
- Central Electricity Authority - India
- Salva Resources Pvt Ltd - India
- Star Paper Mills Limited - India
- Coalindo Energy - Indonesia
- Semirara Mining Corp, Philippines
- Siam City Cement - Thailand
- Electricity Authority, New Zealand
- Global Coal Blending Company Limited - Australia
- Wood Mackenzie - Singapore
- Samtan Co., Ltd - South Korea
- PetroVietnam Power Coal Import and Supply Company
- PowerSource Philippines DevCo
- Ministry of Finance - Indonesia
- TeaM Sual Corporation - Philippines
- Indian Oil Corporation Limited
- Malabar Cements Ltd - India
- MS Steel International - UAE
- Cigading International Bulk Terminal - Indonesia
- Interocean Group of Companies - India
- Sinarmas Energy and Mining - Indonesia
- Latin American Coal - Colombia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jindal Steel & Power Ltd - India
- Africa Commodities Group - South Africa
- Savvy Resources Ltd - HongKong
- GAC Shipping (India) Pvt Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Sical Logistics Limited - India
- Georgia Ports Authority, United States
- Posco Energy - South Korea
- Minerals Council of Australia
- LBH Netherlands Bv - Netherlands
- European Bulk Services B.V. - Netherlands
- Australian Coal Association
- Kumho Petrochemical, South Korea
- Madhucon Powers Ltd - India
- Heidelberg Cement - Germany
- GMR Energy Limited - India
- Xindia Steels Limited - India
- Parry Sugars Refinery, India
- Bhushan Steel Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Commonwealth Bank - Australia
- Uttam Galva Steels Limited - India
- Siam City Cement PLC, Thailand
- Indian Energy Exchange, India
- GVK Power & Infra Limited - India
- ASAPP Information Group - India
- Bayan Resources Tbk. - Indonesia
- Power Finance Corporation Ltd., India
- Central Java Power - Indonesia
- Australian Commodity Traders Exchange
- India Bulls Power Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Iligan Light & Power Inc, Philippines
- Gujarat Sidhee Cement - India
- Binh Thuan Hamico - Vietnam
- Orica Australia Pty. Ltd.
- Bhatia International Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Krishnapatnam Port Company Ltd. - India
- Sree Jayajothi Cements Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Agrawal Coal Company - India
- Romanian Commodities Exchange
- London Commodity Brokers - England
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