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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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- McConnell Dowell - Australia
- Directorate General of MIneral and Coal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Essar Steel Hazira Ltd - India
- Planning Commission, India
- Baramulti Group, Indonesia
- VISA Power Limited - India
- Medco Energi Mining Internasional
- Holcim Trading Pte Ltd - Singapore
- Intertek Mineral Services - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Economic Council, Georgia
- New Zealand Coal & Carbon
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Ambuja Cements Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sical Logistics Limited - India
- Eastern Coal Council - USA
- Indian Oil Corporation Limited
- Miang Besar Coal Terminal - Indonesia
- Jaiprakash Power Ventures ltd
- Bhushan Steel Limited - India
- South Luzon Thermal Energy Corporation
- Manunggal Multi Energi - Indonesia
- Singapore Mercantile Exchange
- Altura Mining Limited, Indonesia
- SMC Global Power, Philippines
- Kartika Selabumi Mining - Indonesia
- Deloitte Consulting - India
- Semirara Mining and Power Corporation, Philippines
- Trasteel International SA, Italy
- Asmin Koalindo Tuhup - Indonesia
- Oldendorff Carriers - Singapore
- Marubeni Corporation - India
- Electricity Authority, New Zealand
- Ministry of Mines - Canada
- Indonesian Coal Mining Association
- Georgia Ports Authority, United States
- Antam Resourcindo - Indonesia
- Salva Resources Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Siam City Cement - Thailand
- Jindal Steel & Power Ltd - India
- Wilmar Investment Holdings
- India Bulls Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- OPG Power Generation Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Bukit Makmur.PT - Indonesia
- Ministry of Transport, Egypt
- Kumho Petrochemical, South Korea
- Kalimantan Lumbung Energi - Indonesia
- Anglo American - United Kingdom
- International Coal Ventures Pvt Ltd - India
- GMR Energy Limited - India
- Samtan Co., Ltd - South Korea
- Banpu Public Company Limited - Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Merrill Lynch Commodities Europe
- Offshore Bulk Terminal Pte Ltd, Singapore
- ASAPP Information Group - India
- Energy Link Ltd, New Zealand
- Ind-Barath Power Infra Limited - India
- Australian Coal Association
- Vizag Seaport Private Limited - India
- Sree Jayajothi Cements Limited - India
- Pendopo Energi Batubara - Indonesia
- Xindia Steels Limited - India
- Rio Tinto Coal - Australia
- Semirara Mining Corp, Philippines
- Australian Commodity Traders Exchange
- Coal and Oil Company - UAE
- Vedanta Resources Plc - India
- Bangladesh Power Developement Board
- Kobexindo Tractors - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- Karaikal Port Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Kideco Jaya Agung - Indonesia
- Agrawal Coal Company - India
- Orica Mining Services - Indonesia
- Global Green Power PLC Corporation, Philippines
- Minerals Council of Australia
- Indian Energy Exchange, India
- Kohat Cement Company Ltd. - Pakistan
- Grasim Industreis Ltd - India
- Indogreen Group - Indonesia
- Sarangani Energy Corporation, Philippines
- Dalmia Cement Bharat India
- Krishnapatnam Port Company Ltd. - India
- Straits Asia Resources Limited - Singapore
- IEA Clean Coal Centre - UK
- Bayan Resources Tbk. - Indonesia
- Kepco SPC Power Corporation, Philippines
- Posco Energy - South Korea
- Timah Investasi Mineral - Indoneisa
- Karbindo Abesyapradhi - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- Renaissance Capital - South Africa
- Price Waterhouse Coopers - Russia
- SN Aboitiz Power Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Star Paper Mills Limited - India
- Larsen & Toubro Limited - India
- Iligan Light & Power Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Bhatia International Limited - India
- Gujarat Sidhee Cement - India
- Heidelberg Cement - Germany
- Edison Trading Spa - Italy
- Bhoruka Overseas - Indonesia
- Mjunction Services Limited - India
- Chettinad Cement Corporation Ltd - India
- MS Steel International - UAE
- Ministry of Finance - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Riau Bara Harum - Indonesia
- Mintek Dendrill Indonesia
- Aboitiz Power Corporation - Philippines
- Madhucon Powers Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Binh Thuan Hamico - Vietnam
- Romanian Commodities Exchange
- Ceylon Electricity Board - Sri Lanka
- Alfred C Toepfer International GmbH - Germany
- Siam City Cement PLC, Thailand
- Global Business Power Corporation, Philippines
- Mercator Lines Limited - India
- Interocean Group of Companies - India
- The State Trading Corporation of India Ltd
- Petron Corporation, Philippines
- Cement Manufacturers Association - India
- Maheswari Brothers Coal Limited - India
- Meralco Power Generation, Philippines
- Coalindo Energy - Indonesia
- ICICI Bank Limited - India
- Videocon Industries ltd - India
- LBH Netherlands Bv - Netherlands
- Carbofer General Trading SA - India
- Wood Mackenzie - Singapore
- London Commodity Brokers - England
- Commonwealth Bank - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Thiess Contractors Indonesia
- Standard Chartered Bank - UAE
- Sindya Power Generating Company Private Ltd
- Bharathi Cement Corporation - India
- Indo Tambangraya Megah - Indonesia
- Kaltim Prima Coal - Indonesia
- GAC Shipping (India) Pvt Ltd
- SMG Consultants - Indonesia
- Savvy Resources Ltd - HongKong
- Directorate Of Revenue Intelligence - India
- AsiaOL BioFuels Corp., Philippines
- Parliament of New Zealand
- Leighton Contractors Pty Ltd - Australia
- Makarim & Taira - Indonesia
- Goldman Sachs - Singapore
- Malabar Cements Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Orica Australia Pty. Ltd.
- Uttam Galva Steels Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Meenaskhi Energy Private Limited - India
- San Jose City I Power Corp, Philippines
- Parry Sugars Refinery, India
- Metalloyd Limited - United Kingdom
- Central Java Power - Indonesia
- Bukit Baiduri Energy - Indonesia
- Aditya Birla Group - India
- IHS Mccloskey Coal Group - USA
- Therma Luzon, Inc, Philippines
- TeaM Sual Corporation - Philippines
- Independent Power Producers Association of India
- Bulk Trading Sa - Switzerland
- Simpson Spence & Young - Indonesia
- Port Waratah Coal Services - Australia
- Indika Energy - Indonesia
- White Energy Company Limited
- GVK Power & Infra Limited - India
- Gujarat Electricity Regulatory Commission - India
- Thai Mozambique Logistica
- Mercuria Energy - Indonesia
- The University of Queensland
- Chamber of Mines of South Africa
- Petrochimia International Co. Ltd.- Taiwan
- PNOC Exploration Corporation - Philippines
- Borneo Indobara - Indonesia
- Tata Chemicals Ltd - India
- Formosa Plastics Group - Taiwan
- Electricity Generating Authority of Thailand
- Barasentosa Lestari - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- GN Power Mariveles Coal Plant, Philippines
- Globalindo Alam Lestari - Indonesia
- Lanco Infratech Ltd - India
- Sojitz Corporation - Japan
- PTC India Limited - India
- Central Electricity Authority - India
- Tamil Nadu electricity Board
- Africa Commodities Group - South Africa
- Gujarat Mineral Development Corp Ltd - India
- CNBM International Corporation - China
- Eastern Energy - Thailand
- European Bulk Services B.V. - Netherlands
- Sakthi Sugars Limited - India
- Attock Cement Pakistan Limited
- PowerSource Philippines DevCo
- Energy Development Corp, Philippines
- Latin American Coal - Colombia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Neyveli Lignite Corporation Ltd, - India
- The Treasury - Australian Government
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