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