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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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Wednesday, 24 July 19
COAL'S DEMISE QUICKENS IN EUROPE AS MARKET SHIFT IDLES PLANTS - BLOOMBERG
Commodity markets are stripping away the case for coal in Europe, moving quicker than government efforts to close the most polluting power plants.
...
Monday, 22 July 19
SUPRAMAX: THE ASIAN ARENA SAW INCREASED ACTIVITY AND STRONGER NUMBERS BEING CONCLUDED; INDONESIAN ROUNDS REMAINED FIRM - BALTIC BRIEFING
Capesize
Another week of gains as the Atlantic basin continues to be pressurised on tonnage and Brazilian cargoes keep up a steady flow. The Ca ...
Thursday, 18 July 19
WORLD TRADE IN HARD COAL ROSE BY 4.7% IN 2018 - GERMANY COAL IMPORTERS ASSOCIATION
World Trade in Hard Coal Rose by 4.7% in 2018
Hard Coal Can Prevent Stress in the Electric Power System in Germany
• Sharp decl ...
Wednesday, 17 July 19
MARKET INSIGHT - INTERMODAL
The Strait of Hormuz is one of the most important waterways in the world, connecting crude producers in the Middle East with key markets in the res ...
Tuesday, 16 July 19
KING COAL RULES IN JAPAN AS POWER UTILITIES IN THRALL TO LOW-COST FUEL - REUTERS
Japanese utilities will rely on the return of coal-fired power plants from maintenance to meet peak electricity demand this summer, highlighting th ...
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- Leighton Contractors Pty Ltd - Australia
- Indian Energy Exchange, India
- Kaltim Prima Coal - Indonesia
- Kideco Jaya Agung - Indonesia
- CIMB Investment Bank - Malaysia
- Gujarat Sidhee Cement - India
- Anglo American - United Kingdom
- Maharashtra Electricity Regulatory Commission - India
- Aboitiz Power Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- Jindal Steel & Power Ltd - India
- Sical Logistics Limited - India
- Renaissance Capital - South Africa
- Bhatia International Limited - India
- Oldendorff Carriers - Singapore
- Rashtriya Ispat Nigam Limited - India
- Chamber of Mines of South Africa
- Timah Investasi Mineral - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Jaiprakash Power Ventures ltd
- Cigading International Bulk Terminal - Indonesia
- Altura Mining Limited, Indonesia
- Malabar Cements Ltd - India
- Mjunction Services Limited - India
- CNBM International Corporation - China
- Samtan Co., Ltd - South Korea
- Bangladesh Power Developement Board
- AsiaOL BioFuels Corp., Philippines
- Deloitte Consulting - India
- Meralco Power Generation, Philippines
- Star Paper Mills Limited - India
- Edison Trading Spa - Italy
- Meenaskhi Energy Private Limited - India
- PNOC Exploration Corporation - Philippines
- Africa Commodities Group - South Africa
- Xindia Steels Limited - India
- Makarim & Taira - Indonesia
- Essar Steel Hazira Ltd - India
- Bukit Baiduri Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Vedanta Resources Plc - India
- MS Steel International - UAE
- Electricity Generating Authority of Thailand
- ICICI Bank Limited - India
- Parry Sugars Refinery, India
- Bhushan Steel Limited - India
- Rio Tinto Coal - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Australian Commodity Traders Exchange
- Power Finance Corporation Ltd., India
- Siam City Cement PLC, Thailand
- International Coal Ventures Pvt Ltd - India
- Borneo Indobara - Indonesia
- Petron Corporation, Philippines
- Madhucon Powers Ltd - India
- Posco Energy - South Korea
- Banpu Public Company Limited - Thailand
- Electricity Authority, New Zealand
- Independent Power Producers Association of India
- Energy Development Corp, Philippines
- Orica Australia Pty. Ltd.
- Barasentosa Lestari - Indonesia
- San Jose City I Power Corp, Philippines
- Kumho Petrochemical, South Korea
- Carbofer General Trading SA - India
- Bharathi Cement Corporation - India
- Trasteel International SA, Italy
- Grasim Industreis Ltd - India
- Cement Manufacturers Association - India
- Indian Oil Corporation Limited
- Global Coal Blending Company Limited - Australia
- Antam Resourcindo - Indonesia
- PowerSource Philippines DevCo
- TNB Fuel Sdn Bhd - Malaysia
- Intertek Mineral Services - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- India Bulls Power Limited - India
- Tata Chemicals Ltd - India
- Therma Luzon, Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Romanian Commodities Exchange
- Tamil Nadu electricity Board
- GMR Energy Limited - India
- Bulk Trading Sa - Switzerland
- Orica Mining Services - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- IHS Mccloskey Coal Group - USA
- Binh Thuan Hamico - Vietnam
- Bank of Tokyo Mitsubishi UFJ Ltd
- Heidelberg Cement - Germany
- Gujarat Electricity Regulatory Commission - India
- Vijayanagar Sugar Pvt Ltd - India
- IEA Clean Coal Centre - UK
- TeaM Sual Corporation - Philippines
- Latin American Coal - Colombia
- Parliament of New Zealand
- Siam City Cement - Thailand
- Savvy Resources Ltd - HongKong
- Semirara Mining and Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Formosa Plastics Group - Taiwan
- Port Waratah Coal Services - Australia
- Central Java Power - Indonesia
- Salva Resources Pvt Ltd - India
- Indogreen Group - Indonesia
- VISA Power Limited - India
- Bhoruka Overseas - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Indo Tambangraya Megah - Indonesia
- Indonesian Coal Mining Association
- Holcim Trading Pte Ltd - Singapore
- Metalloyd Limited - United Kingdom
- Coalindo Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Bayan Resources Tbk. - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Singapore Mercantile Exchange
- SMC Global Power, Philippines
- Vizag Seaport Private Limited - India
- Sakthi Sugars Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Semirara Mining Corp, Philippines
- Planning Commission, India
- Ministry of Mines - Canada
- Mintek Dendrill Indonesia
- ASAPP Information Group - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- White Energy Company Limited
- Videocon Industries ltd - India
- Global Business Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Straits Asia Resources Limited - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- PTC India Limited - India
- Georgia Ports Authority, United States
- The State Trading Corporation of India Ltd
- Coastal Gujarat Power Limited - India
- Kartika Selabumi Mining - Indonesia
- New Zealand Coal & Carbon
- Alfred C Toepfer International GmbH - Germany
- Goldman Sachs - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Dalmia Cement Bharat India
- Directorate Of Revenue Intelligence - India
- The University of Queensland
- Sinarmas Energy and Mining - Indonesia
- OPG Power Generation Pvt Ltd - India
- Minerals Council of Australia
- Attock Cement Pakistan Limited
- Ind-Barath Power Infra Limited - India
- Central Electricity Authority - India
- Neyveli Lignite Corporation Ltd, - India
- South Luzon Thermal Energy Corporation
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- The Treasury - Australian Government
- McConnell Dowell - Australia
- LBH Netherlands Bv - Netherlands
- Interocean Group of Companies - India
- Eastern Energy - Thailand
- Manunggal Multi Energi - Indonesia
- Uttam Galva Steels Limited - India
- Marubeni Corporation - India
- Globalindo Alam Lestari - Indonesia
- Price Waterhouse Coopers - Russia
- Kepco SPC Power Corporation, Philippines
- Wilmar Investment Holdings
- SMG Consultants - Indonesia
- Chettinad Cement Corporation Ltd - India
- European Bulk Services B.V. - Netherlands
- Indika Energy - Indonesia
- Commonwealth Bank - Australia
- London Commodity Brokers - England
- Ministry of Finance - Indonesia
- Karaikal Port Pvt Ltd - India
- Merrill Lynch Commodities Europe
- SN Aboitiz Power Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Riau Bara Harum - Indonesia
- Agrawal Coal Company - India
- Baramulti Group, Indonesia
- Thai Mozambique Logistica
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GVK Power & Infra Limited - India
- Larsen & Toubro Limited - India
- Eastern Coal Council - USA
- Iligan Light & Power Inc, Philippines
- Lanco Infratech Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Wood Mackenzie - Singapore
- Sree Jayajothi Cements Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- GAC Shipping (India) Pvt Ltd
- Medco Energi Mining Internasional
- Mercuria Energy - Indonesia
- Aditya Birla Group - India
- Krishnapatnam Port Company Ltd. - India
- Ambuja Cements Ltd - India
- Mercator Lines Limited - India
- Energy Link Ltd, New Zealand
- Pendopo Energi Batubara - Indonesia
- Coal and Oil Company - UAE
- Sarangani Energy Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Economic Council, Georgia
- Australian Coal Association
- Toyota Tsusho Corporation, Japan
- Simpson Spence & Young - Indonesia
- Ministry of Transport, Egypt
- Thiess Contractors Indonesia
- Sojitz Corporation - Japan
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