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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, 16 July 19
SUPRAMAX: THE ASIAN ARENA WAS SPLIT, WITH A BUILD-UP OF TONNAGE AND LACK OF ENQUIRY IN THE NORTH - BALTIC BRIEFING
Capesize
It was a Brazilian affair with a strong splash of bunkers characterising the Capesize market over the past week. Largely traded in Eur ...
Wednesday, 10 July 19
KOREA SOUTH-EAST POWER INVITES BIDS FOR HCV AND LCV COAL FOR AUGUST 2019 LOADING
COALspot.com: South Korea’s Korea South-East Power Co., Ltd. (KOEN) has issued an international tender for total 460,000 to 500,000 Metric To ...
Wednesday, 10 July 19
SHIPPING MARKET INSIGHT - INTERMODAL
In contrast with the general expectations for the dry bulk market, the sector was not positive or even stable during the past 6 months. The warning ...
Monday, 08 July 19
INDONESIAN COAL PRICE REFERENCE POSTS BIGGEST MONTHLY LOSS SINCE JANUARY 2017
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down again the benchmark price of Indonesian th ...
Monday, 08 July 19
ULTRAMAX: A 52,000-TONNER OPEN CJK FIXED FOR A TRIP VIA INDONESIA WITH RE-DELIVERY CHINA AT $6,100 - BALTIC BRIEFING
Capesize
The Capesize market surged over the past week, reaching highs not seen since August last year. Widespread activity in both basins saw ...
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- Altura Mining Limited, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Timah Investasi Mineral - Indoneisa
- Savvy Resources Ltd - HongKong
- Sree Jayajothi Cements Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Banpu Public Company Limited - Thailand
- Sical Logistics Limited - India
- San Jose City I Power Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Kohat Cement Company Ltd. - Pakistan
- McConnell Dowell - Australia
- Coalindo Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Economic Council, Georgia
- Straits Asia Resources Limited - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Indika Energy - Indonesia
- Agrawal Coal Company - India
- IEA Clean Coal Centre - UK
- Indian Energy Exchange, India
- Coastal Gujarat Power Limited - India
- Lanco Infratech Ltd - India
- Mercator Lines Limited - India
- Electricity Generating Authority of Thailand
- Borneo Indobara - Indonesia
- Bayan Resources Tbk. - Indonesia
- Directorate Of Revenue Intelligence - India
- Heidelberg Cement - Germany
- Rio Tinto Coal - Australia
- Krishnapatnam Port Company Ltd. - India
- Samtan Co., Ltd - South Korea
- Indogreen Group - Indonesia
- GAC Shipping (India) Pvt Ltd
- Sojitz Corporation - Japan
- Bukit Asam (Persero) Tbk - Indonesia
- Orica Australia Pty. Ltd.
- Merrill Lynch Commodities Europe
- South Luzon Thermal Energy Corporation
- Interocean Group of Companies - India
- Larsen & Toubro Limited - India
- Bhoruka Overseas - Indonesia
- Bhatia International Limited - India
- Ministry of Transport, Egypt
- Leighton Contractors Pty Ltd - Australia
- Kumho Petrochemical, South Korea
- The Treasury - Australian Government
- Pipit Mutiara Jaya. PT, Indonesia
- Barasentosa Lestari - Indonesia
- Baramulti Group, Indonesia
- White Energy Company Limited
- GVK Power & Infra Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Grasim Industreis Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Sarangani Energy Corporation, Philippines
- Coal and Oil Company - UAE
- Karaikal Port Pvt Ltd - India
- Bangladesh Power Developement Board
- Pendopo Energi Batubara - Indonesia
- GMR Energy Limited - India
- Malabar Cements Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Goldman Sachs - Singapore
- Energy Development Corp, Philippines
- Tamil Nadu electricity Board
- Ambuja Cements Ltd - India
- Central Electricity Authority - India
- European Bulk Services B.V. - Netherlands
- Price Waterhouse Coopers - Russia
- Eastern Energy - Thailand
- Alfred C Toepfer International GmbH - Germany
- Vijayanagar Sugar Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Kaltim Prima Coal - Indonesia
- Singapore Mercantile Exchange
- Port Waratah Coal Services - Australia
- Meenaskhi Energy Private Limited - India
- SMG Consultants - Indonesia
- SN Aboitiz Power Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Gujarat Sidhee Cement - India
- CIMB Investment Bank - Malaysia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Africa Commodities Group - South Africa
- Power Finance Corporation Ltd., India
- Directorate General of MIneral and Coal - Indonesia
- Sindya Power Generating Company Private Ltd
- Orica Mining Services - Indonesia
- Antam Resourcindo - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Attock Cement Pakistan Limited
- Gujarat Mineral Development Corp Ltd - India
- ICICI Bank Limited - India
- Ind-Barath Power Infra Limited - India
- Indo Tambangraya Megah - Indonesia
- Australian Coal Association
- Kapuas Tunggal Persada - Indonesia
- Bukit Baiduri Energy - Indonesia
- Bhushan Steel Limited - India
- Trasteel International SA, Italy
- Dalmia Cement Bharat India
- Jindal Steel & Power Ltd - India
- Carbofer General Trading SA - India
- Global Business Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Finance - Indonesia
- Independent Power Producers Association of India
- Global Green Power PLC Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Commonwealth Bank - Australia
- Parliament of New Zealand
- Renaissance Capital - South Africa
- Georgia Ports Authority, United States
- Kideco Jaya Agung - Indonesia
- Sakthi Sugars Limited - India
- Salva Resources Pvt Ltd - India
- Riau Bara Harum - Indonesia
- PowerSource Philippines DevCo
- Metalloyd Limited - United Kingdom
- ASAPP Information Group - India
- Maharashtra Electricity Regulatory Commission - India
- SMC Global Power, Philippines
- Kartika Selabumi Mining - Indonesia
- PTC India Limited - India
- Indonesian Coal Mining Association
- CNBM International Corporation - China
- Kepco SPC Power Corporation, Philippines
- Posco Energy - South Korea
- Medco Energi Mining Internasional
- Tata Chemicals Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Makarim & Taira - Indonesia
- Semirara Mining Corp, Philippines
- Maheswari Brothers Coal Limited - India
- Bharathi Cement Corporation - India
- Aditya Birla Group - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Australian Commodity Traders Exchange
- Videocon Industries ltd - India
- Anglo American - United Kingdom
- Wilmar Investment Holdings
- New Zealand Coal & Carbon
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Globalindo Alam Lestari - Indonesia
- TeaM Sual Corporation - Philippines
- Electricity Authority, New Zealand
- Mjunction Services Limited - India
- Mercuria Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Toyota Tsusho Corporation, Japan
- International Coal Ventures Pvt Ltd - India
- Latin American Coal - Colombia
- Star Paper Mills Limited - India
- Planning Commission, India
- Formosa Plastics Group - Taiwan
- Ministry of Mines - Canada
- Deloitte Consulting - India
- VISA Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Mintek Dendrill Indonesia
- Global Coal Blending Company Limited - Australia
- Ceylon Electricity Board - Sri Lanka
- India Bulls Power Limited - India
- Vizag Seaport Private Limited - India
- Kobexindo Tractors - Indoneisa
- LBH Netherlands Bv - Netherlands
- Bulk Trading Sa - Switzerland
- Thai Mozambique Logistica
- The State Trading Corporation of India Ltd
- Jorong Barutama Greston.PT - Indonesia
- Chettinad Cement Corporation Ltd - India
- OPG Power Generation Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Siam City Cement - Thailand
- Intertek Mineral Services - Indonesia
- Wood Mackenzie - Singapore
- Sinarmas Energy and Mining - Indonesia
- Bukit Makmur.PT - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- IHS Mccloskey Coal Group - USA
- PNOC Exploration Corporation - Philippines
- Standard Chartered Bank - UAE
- Petron Corporation, Philippines
- Central Java Power - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Vedanta Resources Plc - India
- Thiess Contractors Indonesia
- Xindia Steels Limited - India
- Madhucon Powers Ltd - India
- Meralco Power Generation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Romanian Commodities Exchange
- Binh Thuan Hamico - Vietnam
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement PLC, Thailand
- Uttam Galva Steels Limited - India
- Chamber of Mines of South Africa
- Simpson Spence & Young - Indonesia
- Essar Steel Hazira Ltd - India
- Billiton Holdings Pty Ltd - Australia
- London Commodity Brokers - England
- The University of Queensland
- Eastern Coal Council - USA
- Minerals Council of Australia
- Oldendorff Carriers - Singapore
- Marubeni Corporation - India
- Energy Link Ltd, New Zealand
- Jaiprakash Power Ventures ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Edison Trading Spa - Italy
- Parry Sugars Refinery, India
- Cement Manufacturers Association - India
- MS Steel International - UAE
- Semirara Mining and Power Corporation, Philippines
- Indian Oil Corporation Limited
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