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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, 03 July 19
SHIPPING MARKET INSIGHT - INTERMODAL
The global shipping industry is facing numerous challenges at a time when geopolitical turmoil has escalated in view of the recent tension in the M ...
Monday, 01 July 19
COAL DEMAND RISES, BUT REMAINS BELOW PEAK LEVELS - FORBES
This article is the third in a series on BP’s recently-released Statistical Review of World Energy 2019. The Review provides a comprehensive ...
Saturday, 29 June 19
ULTRAMAX: FROM SOUTHEAST ASIA MORE COAL WAS ENTERING THE MARKET - BALTIC BRIEFING
Capesize
The market showed variability over the past week, as most routes were active yet sentiment differed from region to region. The Pacific ...
Wednesday, 26 June 19
SHIPPING MARKET INSIGHT - INTERMODAL
As the first half of the year is almost over, it is worth looking back at the sale and purchase activity during these months, focusing on the segme ...
Tuesday, 25 June 19
THERMAL COAL FUTURES ON THE ZHENGSHOU EXCHANGE ROSE - DANIEL HYNES
Coal markets were buoyed by ongoing supply side issues.
According to Daniel Hynes, Senior Commodity Strategist of ANZ, the the ...
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- Petrochimia International Co. Ltd.- Taiwan
- Coal and Oil Company - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- Straits Asia Resources Limited - Singapore
- PNOC Exploration Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Marubeni Corporation - India
- Sarangani Energy Corporation, Philippines
- Riau Bara Harum - Indonesia
- Wilmar Investment Holdings
- Videocon Industries ltd - India
- Indian Oil Corporation Limited
- London Commodity Brokers - England
- Port Waratah Coal Services - Australia
- Kaltim Prima Coal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Madhucon Powers Ltd - India
- Karaikal Port Pvt Ltd - India
- Carbofer General Trading SA - India
- Renaissance Capital - South Africa
- Makarim & Taira - Indonesia
- New Zealand Coal & Carbon
- Siam City Cement - Thailand
- Chamber of Mines of South Africa
- Simpson Spence & Young - Indonesia
- SMG Consultants - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Bhatia International Limited - India
- Central Java Power - Indonesia
- Oldendorff Carriers - Singapore
- Essar Steel Hazira Ltd - India
- Mintek Dendrill Indonesia
- Edison Trading Spa - Italy
- Pendopo Energi Batubara - Indonesia
- Ministry of Mines - Canada
- LBH Netherlands Bv - Netherlands
- Alfred C Toepfer International GmbH - Germany
- Larsen & Toubro Limited - India
- PetroVietnam Power Coal Import and Supply Company
- European Bulk Services B.V. - Netherlands
- Australian Commodity Traders Exchange
- Uttam Galva Steels Limited - India
- Kepco SPC Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Eastern Coal Council - USA
- Sinarmas Energy and Mining - Indonesia
- Grasim Industreis Ltd - India
- Wood Mackenzie - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Sindya Power Generating Company Private Ltd
- CNBM International Corporation - China
- Savvy Resources Ltd - HongKong
- Ceylon Electricity Board - Sri Lanka
- Trasteel International SA, Italy
- Holcim Trading Pte Ltd - Singapore
- TeaM Sual Corporation - Philippines
- SMC Global Power, Philippines
- Orica Australia Pty. Ltd.
- Thiess Contractors Indonesia
- Sojitz Corporation - Japan
- Sree Jayajothi Cements Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Timah Investasi Mineral - Indoneisa
- Cement Manufacturers Association - India
- Central Electricity Authority - India
- Parliament of New Zealand
- Globalindo Alam Lestari - Indonesia
- PowerSource Philippines DevCo
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Bangladesh Power Developement Board
- Bukit Makmur.PT - Indonesia
- GMR Energy Limited - India
- Energy Development Corp, Philippines
- Mercator Lines Limited - India
- Electricity Authority, New Zealand
- Leighton Contractors Pty Ltd - Australia
- Rashtriya Ispat Nigam Limited - India
- The Treasury - Australian Government
- Toyota Tsusho Corporation, Japan
- Price Waterhouse Coopers - Russia
- Anglo American - United Kingdom
- Indian Energy Exchange, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Global Green Power PLC Corporation, Philippines
- Antam Resourcindo - Indonesia
- Semirara Mining Corp, Philippines
- Jaiprakash Power Ventures ltd
- Baramulti Group, Indonesia
- Xindia Steels Limited - India
- PTC India Limited - India
- Indo Tambangraya Megah - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Dalmia Cement Bharat India
- Romanian Commodities Exchange
- Bhoruka Overseas - Indonesia
- ASAPP Information Group - India
- Pipit Mutiara Jaya. PT, Indonesia
- Planning Commission, India
- Aditya Birla Group - India
- Commonwealth Bank - Australia
- Chettinad Cement Corporation Ltd - India
- Indogreen Group - Indonesia
- CIMB Investment Bank - Malaysia
- Iligan Light & Power Inc, Philippines
- Samtan Co., Ltd - South Korea
- Independent Power Producers Association of India
- Vizag Seaport Private Limited - India
- Bharathi Cement Corporation - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Meenaskhi Energy Private Limited - India
- Goldman Sachs - Singapore
- Agrawal Coal Company - India
- Attock Cement Pakistan Limited
- Tamil Nadu electricity Board
- Singapore Mercantile Exchange
- Bahari Cakrawala Sebuku - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Orica Mining Services - Indonesia
- Ministry of Transport, Egypt
- Sical Logistics Limited - India
- Star Paper Mills Limited - India
- VISA Power Limited - India
- Indonesian Coal Mining Association
- Altura Mining Limited, Indonesia
- Siam City Cement PLC, Thailand
- Directorate Of Revenue Intelligence - India
- Africa Commodities Group - South Africa
- OPG Power Generation Pvt Ltd - India
- Bhushan Steel Limited - India
- GAC Shipping (India) Pvt Ltd
- Aboitiz Power Corporation - Philippines
- South Luzon Thermal Energy Corporation
- Mjunction Services Limited - India
- Mercuria Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Lanco Infratech Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- The University of Queensland
- Miang Besar Coal Terminal - Indonesia
- Tata Chemicals Ltd - India
- Kumho Petrochemical, South Korea
- Krishnapatnam Port Company Ltd. - India
- Bukit Baiduri Energy - Indonesia
- Deloitte Consulting - India
- GN Power Mariveles Coal Plant, Philippines
- Thai Mozambique Logistica
- Bank of Tokyo Mitsubishi UFJ Ltd
- Jindal Steel & Power Ltd - India
- Bayan Resources Tbk. - Indonesia
- Formosa Plastics Group - Taiwan
- Kohat Cement Company Ltd. - Pakistan
- Ambuja Cements Ltd - India
- Kobexindo Tractors - Indoneisa
- Medco Energi Mining Internasional
- San Jose City I Power Corp, Philippines
- Minerals Council of Australia
- Gujarat Electricity Regulatory Commission - India
- Salva Resources Pvt Ltd - India
- India Bulls Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Meralco Power Generation, Philippines
- Ind-Barath Power Infra Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Indika Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Electricity Generating Authority of Thailand
- Interocean Group of Companies - India
- Australian Coal Association
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Eastern Energy - Thailand
- Power Finance Corporation Ltd., India
- Metalloyd Limited - United Kingdom
- SN Aboitiz Power Inc, Philippines
- Latin American Coal - Colombia
- AsiaOL BioFuels Corp., Philippines
- Petron Corporation, Philippines
- IEA Clean Coal Centre - UK
- Intertek Mineral Services - Indonesia
- GVK Power & Infra Limited - India
- ICICI Bank Limited - India
- Heidelberg Cement - Germany
- Global Coal Blending Company Limited - Australia
- White Energy Company Limited
- Barasentosa Lestari - Indonesia
- Standard Chartered Bank - UAE
- Merrill Lynch Commodities Europe
- Directorate General of MIneral and Coal - Indonesia
- Rio Tinto Coal - Australia
- Banpu Public Company Limited - Thailand
- Maheswari Brothers Coal Limited - India
- Gujarat Sidhee Cement - India
- Coalindo Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Finance - Indonesia
- Manunggal Multi Energi - Indonesia
- Coastal Gujarat Power Limited - India
- Vedanta Resources Plc - India
- Posco Energy - South Korea
- Binh Thuan Hamico - Vietnam
- Malabar Cements Ltd - India
- Borneo Indobara - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Parry Sugars Refinery, India
- IHS Mccloskey Coal Group - USA
- MS Steel International - UAE
- Georgia Ports Authority, United States
- Economic Council, Georgia
- International Coal Ventures Pvt Ltd - India
- Sakthi Sugars Limited - India
- Energy Link Ltd, New Zealand
- The State Trading Corporation of India Ltd
- Bulk Trading Sa - Switzerland
- McConnell Dowell - Australia
- Kalimantan Lumbung Energi - Indonesia
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