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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, 09 September 19
ULTRAMAX: ASIA A 58,000-TONNER FIXED DELIVERY FUZHOU, VIA INDONESIA, REDELIVERY CHINA, AT $12,800
Capesize
0px The market reached new heights this week as the 5TC topped $38,014, a level not seen in the sector since 2013. Fridays 5TC closed ...
Wednesday, 04 September 19
SHIPPING MARKET INSIGHT - INTERMODAL
For yet another time, the market seems to have its own drivers. After a very disappointing first half, the recent recovery in the shipping market i ...
Tuesday, 20 August 19
NORDEN HAS BEEN AWARDED A 3-YEAR CONTRACT FOR THE TRANSPORTATION OF COAL FROM INDONESIA TO HONG KONG
NORDEN has been awarded a 3-year contract with a power company in Hong Kong for the transportation of coal from Indonesia to Hong Kong.
...
Tuesday, 20 August 19
THE AUGUST 2019 INDONESIAN COAL PRICE REFERENCE POSTS THE FIRST MONTHLY GAIN SINCE AUGUST 2018
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised up the benchmark price of Indonesian thermal co ...
Monday, 19 August 19
INDONESIAN COAL RUNS, A 82,000DWT SHIP WAS FIXED DELIVERY CHINA VIA INDONESIA, REDELIVERY JAPAN, IN THE MID $16,000S - BALTIC BRIEFING
Capesize
The Capesize market was buoyant in both basins this week, posting gains across the board. After bottoming out the previous week, rates ...
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- Thai Mozambique Logistica
- McConnell Dowell - Australia
- Attock Cement Pakistan Limited
- Holcim Trading Pte Ltd - Singapore
- London Commodity Brokers - England
- Semirara Mining Corp, Philippines
- Central Electricity Authority - India
- Deloitte Consulting - India
- PNOC Exploration Corporation - Philippines
- Vedanta Resources Plc - India
- Parliament of New Zealand
- Mercuria Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Coalindo Energy - Indonesia
- Mjunction Services Limited - India
- Bhatia International Limited - India
- Cigading International Bulk Terminal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Indian Energy Exchange, India
- PowerSource Philippines DevCo
- OPG Power Generation Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Chamber of Mines of South Africa
- Binh Thuan Hamico - Vietnam
- Karbindo Abesyapradhi - Indoneisa
- TeaM Sual Corporation - Philippines
- Port Waratah Coal Services - Australia
- Sakthi Sugars Limited - India
- Karaikal Port Pvt Ltd - India
- Star Paper Mills Limited - India
- Kartika Selabumi Mining - Indonesia
- Kumho Petrochemical, South Korea
- Directorate General of MIneral and Coal - Indonesia
- Energy Development Corp, Philippines
- GMR Energy Limited - India
- Intertek Mineral Services - Indonesia
- Meralco Power Generation, Philippines
- Edison Trading Spa - Italy
- Formosa Plastics Group - Taiwan
- Tata Chemicals Ltd - India
- Jaiprakash Power Ventures ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Meenaskhi Energy Private Limited - India
- Siam City Cement PLC, Thailand
- Bharathi Cement Corporation - India
- Kapuas Tunggal Persada - Indonesia
- Indian Oil Corporation Limited
- Chettinad Cement Corporation Ltd - India
- The University of Queensland
- Asmin Koalindo Tuhup - Indonesia
- Lanco Infratech Ltd - India
- Trasteel International SA, Italy
- Energy Link Ltd, New Zealand
- Orica Mining Services - Indonesia
- Sical Logistics Limited - India
- GAC Shipping (India) Pvt Ltd
- Neyveli Lignite Corporation Ltd, - India
- Ceylon Electricity Board - Sri Lanka
- Orica Australia Pty. Ltd.
- Vizag Seaport Private Limited - India
- European Bulk Services B.V. - Netherlands
- Coal and Oil Company - UAE
- Makarim & Taira - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Larsen & Toubro Limited - India
- Krishnapatnam Port Company Ltd. - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- New Zealand Coal & Carbon
- Videocon Industries ltd - India
- Riau Bara Harum - Indonesia
- Bukit Baiduri Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- White Energy Company Limited
- Australian Commodity Traders Exchange
- Bayan Resources Tbk. - Indonesia
- Pendopo Energi Batubara - Indonesia
- Barasentosa Lestari - Indonesia
- Indonesian Coal Mining Association
- Wood Mackenzie - Singapore
- Power Finance Corporation Ltd., India
- Bangladesh Power Developement Board
- Eastern Coal Council - USA
- Jindal Steel & Power Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Parry Sugars Refinery, India
- Cement Manufacturers Association - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Agrawal Coal Company - India
- Straits Asia Resources Limited - Singapore
- Ministry of Mines - Canada
- PTC India Limited - India
- GVK Power & Infra Limited - India
- Kobexindo Tractors - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Oldendorff Carriers - Singapore
- VISA Power Limited - India
- Ind-Barath Power Infra Limited - India
- Independent Power Producers Association of India
- Billiton Holdings Pty Ltd - Australia
- Sree Jayajothi Cements Limited - India
- Samtan Co., Ltd - South Korea
- Commonwealth Bank - Australia
- Aditya Birla Group - India
- Electricity Generating Authority of Thailand
- Carbofer General Trading SA - India
- Singapore Mercantile Exchange
- Metalloyd Limited - United Kingdom
- Gujarat Sidhee Cement - India
- Banpu Public Company Limited - Thailand
- Toyota Tsusho Corporation, Japan
- India Bulls Power Limited - India
- Kideco Jaya Agung - Indonesia
- Therma Luzon, Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Indo Tambangraya Megah - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- CNBM International Corporation - China
- Madhucon Powers Ltd - India
- Goldman Sachs - Singapore
- Borneo Indobara - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- ASAPP Information Group - India
- Salva Resources Pvt Ltd - India
- Tamil Nadu electricity Board
- Interocean Group of Companies - India
- South Luzon Thermal Energy Corporation
- Bukit Asam (Persero) Tbk - Indonesia
- Price Waterhouse Coopers - Russia
- Maheswari Brothers Coal Limited - India
- Coastal Gujarat Power Limited - India
- Electricity Authority, New Zealand
- GN Power Mariveles Coal Plant, Philippines
- Directorate Of Revenue Intelligence - India
- Rashtriya Ispat Nigam Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Indika Energy - Indonesia
- Ministry of Transport, Egypt
- Globalindo Alam Lestari - Indonesia
- ICICI Bank Limited - India
- Uttam Galva Steels Limited - India
- Global Green Power PLC Corporation, Philippines
- Planning Commission, India
- PetroVietnam Power Coal Import and Supply Company
- Iligan Light & Power Inc, Philippines
- Marubeni Corporation - India
- Vijayanagar Sugar Pvt Ltd - India
- Grasim Industreis Ltd - India
- Indogreen Group - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Malabar Cements Ltd - India
- Altura Mining Limited, Indonesia
- Antam Resourcindo - Indonesia
- Georgia Ports Authority, United States
- Kohat Cement Company Ltd. - Pakistan
- Manunggal Multi Energi - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Dalmia Cement Bharat India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Baramulti Group, Indonesia
- SN Aboitiz Power Inc, Philippines
- Savvy Resources Ltd - HongKong
- Bahari Cakrawala Sebuku - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- AsiaOL BioFuels Corp., Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Wilmar Investment Holdings
- LBH Netherlands Bv - Netherlands
- Mercator Lines Limited - India
- Kepco SPC Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Sindya Power Generating Company Private Ltd
- Africa Commodities Group - South Africa
- Petron Corporation, Philippines
- Standard Chartered Bank - UAE
- San Jose City I Power Corp, Philippines
- Rio Tinto Coal - Australia
- Ambuja Cements Ltd - India
- CIMB Investment Bank - Malaysia
- Sinarmas Energy and Mining - Indonesia
- Ministry of Finance - Indonesia
- Posco Energy - South Korea
- Romanian Commodities Exchange
- Leighton Contractors Pty Ltd - Australia
- Bhoruka Overseas - Indonesia
- The State Trading Corporation of India Ltd
- Latin American Coal - Colombia
- Economic Council, Georgia
- Eastern Energy - Thailand
- Alfred C Toepfer International GmbH - Germany
- Timah Investasi Mineral - Indoneisa
- Sarangani Energy Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Thiess Contractors Indonesia
- The Treasury - Australian Government
- Medco Energi Mining Internasional
- IHS Mccloskey Coal Group - USA
- MS Steel International - UAE
- Sojitz Corporation - Japan
- Renaissance Capital - South Africa
- Simpson Spence & Young - Indonesia
- Central Java Power - Indonesia
- Mintek Dendrill Indonesia
- SMG Consultants - Indonesia
- Global Business Power Corporation, Philippines
- Anglo American - United Kingdom
- Bhushan Steel Limited - India
- Minerals Council of Australia
- Merrill Lynch Commodities Europe
- Xindia Steels Limited - India
- SMC Global Power, Philippines
- Heidelberg Cement - Germany
- Australian Coal Association
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