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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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Monday, 24 June 19
KOMIPO INVITED BITUMINOUS COAL BIDS FOR BORYEONG & SHIN BORYEONG POWER PLANTS
South Korea state-owned utility Korea Midland Power (KOMIPO) issued a tender for 260,000 MT MT of min. 5700 NAR coal and 240,000 MT of min. 4,600 k ...
Sunday, 23 June 19
SUPRAMAX: A 56,000-DWT WAS FIXED FROM INDONESIA TO VIETNAM AT $10,000 - BALTIC BRIEFING
Capesize
The story over the past week has been largely Atlantic dominated as the basin’s uniquely volatile characteristics came into play ...
Saturday, 22 June 19
OPEC'S BATTLE FOR CONTROL OF THE OIL MARKET - WOOD MACKENZIE
Oil supply is confounding expectations. We have just raised our forecasts for non-OPEC production, the latest in a series of incremental increases. ...
Friday, 21 June 19
INDONESIA'S BAYAN RESOURCES SIGNED A COAL SUPPLY AGREEMENT WITH THE BANGLADESH BCPCL TO SUPPLY 23 MILLION TONS OF COAL FOR 10 YEARS
On Monday, 17th June 2019, PT. Bayan Resources signed a Coal supply Agreement with the Bangladesh- China Power Company (Pvt.) Limited. BCPCL is a j ...
Thursday, 20 June 19
BUMI RESOURCES EXPECTS TO SELL 42 MILLION TONS OF COAL IN FIRST HALF - JAKARTA POST
PT Bumi Resources (BUMI), Indonesia's largest thermal coal miner, expects to close the first half of this year with coal sales of 42 million to ...
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- Kartika Selabumi Mining - Indonesia
- Dalmia Cement Bharat India
- Ind-Barath Power Infra Limited - India
- Therma Luzon, Inc, Philippines
- Sical Logistics Limited - India
- Miang Besar Coal Terminal - Indonesia
- Petron Corporation, Philippines
- Antam Resourcindo - Indonesia
- Thiess Contractors Indonesia
- Semirara Mining Corp, Philippines
- TeaM Sual Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Oldendorff Carriers - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Sojitz Corporation - Japan
- Maheswari Brothers Coal Limited - India
- Indo Tambangraya Megah - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Larsen & Toubro Limited - India
- Romanian Commodities Exchange
- CIMB Investment Bank - Malaysia
- Krishnapatnam Port Company Ltd. - India
- Tamil Nadu electricity Board
- Power Finance Corporation Ltd., India
- Jorong Barutama Greston.PT - Indonesia
- SN Aboitiz Power Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- London Commodity Brokers - England
- GN Power Mariveles Coal Plant, Philippines
- Baramulti Group, Indonesia
- Siam City Cement PLC, Thailand
- Formosa Plastics Group - Taiwan
- Trasteel International SA, Italy
- Altura Mining Limited, Indonesia
- Bhushan Steel Limited - India
- Carbofer General Trading SA - India
- Borneo Indobara - Indonesia
- PowerSource Philippines DevCo
- Sakthi Sugars Limited - India
- Cement Manufacturers Association - India
- Port Waratah Coal Services - Australia
- Planning Commission, India
- Gujarat Electricity Regulatory Commission - India
- Chamber of Mines of South Africa
- Kaltim Prima Coal - Indonesia
- White Energy Company Limited
- Indogreen Group - Indonesia
- Indian Energy Exchange, India
- Bukit Baiduri Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- Coal and Oil Company - UAE
- Bhatia International Limited - India
- Medco Energi Mining Internasional
- Cigading International Bulk Terminal - Indonesia
- GVK Power & Infra Limited - India
- Thai Mozambique Logistica
- Tata Chemicals Ltd - India
- Jaiprakash Power Ventures ltd
- India Bulls Power Limited - India
- Australian Coal Association
- Essar Steel Hazira Ltd - India
- Orica Mining Services - Indonesia
- Grasim Industreis Ltd - India
- Samtan Co., Ltd - South Korea
- Vizag Seaport Private Limited - India
- International Coal Ventures Pvt Ltd - India
- Central Java Power - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Sindya Power Generating Company Private Ltd
- Wood Mackenzie - Singapore
- SMG Consultants - Indonesia
- Merrill Lynch Commodities Europe
- Agrawal Coal Company - India
- Singapore Mercantile Exchange
- Global Coal Blending Company Limited - Australia
- Georgia Ports Authority, United States
- TNB Fuel Sdn Bhd - Malaysia
- Africa Commodities Group - South Africa
- Bahari Cakrawala Sebuku - Indonesia
- Savvy Resources Ltd - HongKong
- Toyota Tsusho Corporation, Japan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PTC India Limited - India
- Standard Chartered Bank - UAE
- Bhoruka Overseas - Indonesia
- European Bulk Services B.V. - Netherlands
- Eastern Energy - Thailand
- Meenaskhi Energy Private Limited - India
- Chettinad Cement Corporation Ltd - India
- Ministry of Finance - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Kohat Cement Company Ltd. - Pakistan
- Economic Council, Georgia
- Maharashtra Electricity Regulatory Commission - India
- Kapuas Tunggal Persada - Indonesia
- Malabar Cements Ltd - India
- Straits Asia Resources Limited - Singapore
- Eastern Coal Council - USA
- Xindia Steels Limited - India
- Electricity Authority, New Zealand
- Bukit Makmur.PT - Indonesia
- Interocean Group of Companies - India
- GAC Shipping (India) Pvt Ltd
- Attock Cement Pakistan Limited
- Heidelberg Cement - Germany
- Jindal Steel & Power Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- San Jose City I Power Corp, Philippines
- The University of Queensland
- Parry Sugars Refinery, India
- Mintek Dendrill Indonesia
- Energy Development Corp, Philippines
- Coastal Gujarat Power Limited - India
- Parliament of New Zealand
- Global Business Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- MS Steel International - UAE
- IEA Clean Coal Centre - UK
- Gujarat Mineral Development Corp Ltd - India
- Metalloyd Limited - United Kingdom
- Wilmar Investment Holdings
- Price Waterhouse Coopers - Russia
- Deloitte Consulting - India
- Alfred C Toepfer International GmbH - Germany
- Commonwealth Bank - Australia
- Leighton Contractors Pty Ltd - Australia
- Coalindo Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Karaikal Port Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Mjunction Services Limited - India
- Indian Oil Corporation Limited
- Edison Trading Spa - Italy
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Goldman Sachs - Singapore
- Kobexindo Tractors - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Meralco Power Generation, Philippines
- Renaissance Capital - South Africa
- Timah Investasi Mineral - Indoneisa
- Ambuja Cements Ltd - India
- Globalindo Alam Lestari - Indonesia
- Intertek Mineral Services - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Star Paper Mills Limited - India
- Indika Energy - Indonesia
- Vedanta Resources Plc - India
- Iligan Light & Power Inc, Philippines
- Makarim & Taira - Indonesia
- CNBM International Corporation - China
- Mercator Lines Limited - India
- Barasentosa Lestari - Indonesia
- Indonesian Coal Mining Association
- Holcim Trading Pte Ltd - Singapore
- Central Electricity Authority - India
- Neyveli Lignite Corporation Ltd, - India
- Siam City Cement - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Rio Tinto Coal - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Salva Resources Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Global Green Power PLC Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Energy Link Ltd, New Zealand
- New Zealand Coal & Carbon
- Pipit Mutiara Jaya. PT, Indonesia
- Electricity Generating Authority of Thailand
- OPG Power Generation Pvt Ltd - India
- Orica Australia Pty. Ltd.
- GMR Energy Limited - India
- McConnell Dowell - Australia
- Bayan Resources Tbk. - Indonesia
- Videocon Industries ltd - India
- Rashtriya Ispat Nigam Limited - India
- Aditya Birla Group - India
- The State Trading Corporation of India Ltd
- Ministry of Mines - Canada
- Gujarat Sidhee Cement - India
- Lanco Infratech Ltd - India
- ICICI Bank Limited - India
- Kideco Jaya Agung - Indonesia
- The Treasury - Australian Government
- Billiton Holdings Pty Ltd - Australia
- Anglo American - United Kingdom
- Ceylon Electricity Board - Sri Lanka
- Minerals Council of Australia
- SMC Global Power, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Simpson Spence & Young - Indonesia
- Latin American Coal - Colombia
- South Luzon Thermal Energy Corporation
- Bangladesh Power Developement Board
- Directorate Of Revenue Intelligence - India
- Mercuria Energy - Indonesia
- Independent Power Producers Association of India
- Binh Thuan Hamico - Vietnam
- Manunggal Multi Energi - Indonesia
- Marubeni Corporation - India
- Uttam Galva Steels Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Transport, Egypt
- VISA Power Limited - India
- Riau Bara Harum - Indonesia
- Banpu Public Company Limited - Thailand
- Australian Commodity Traders Exchange
- Sree Jayajothi Cements Limited - India
- Bulk Trading Sa - Switzerland
- LBH Netherlands Bv - Netherlands
- Madhucon Powers Ltd - India
- ASAPP Information Group - India
- Posco Energy - South Korea
- Bharathi Cement Corporation - India
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