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