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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, 18 June 19
TANKER SHIPPING: WHILE WE WAIT FOR 2020 TO KICK IN, IT'S ALL ABOUT POLITICS - BIMCO
Demand drivers and freight rates
Iran, Libya and Venezuela face export limitations because of sanctions and internal political troubles. At the s ...
Saturday, 15 June 19
SUPRAMAX: A 58,000-TONNER, OPEN QINGDAO, WAS BOOKED TO REDELIVER IN EAST COAST INDIA AT $6,500 - BALTIC BRIEFING
Capesize
The market closed on a quiet Friday last week after a few hectic days of mid-week trading. Trade routes from Brazil to the Far East we ...
Friday, 14 June 19
PANAMAX: OUTLOOK IS MIXED - FERNLEYS
Capesize
Sentiment changed to a more nervous tone as pacific cargo volumes failed to deliver as expected, however latest activity indicates res ...
Friday, 14 June 19
ELECTRONIC (PAPERLESS) TRADING - SKULD
KNOWLEDGE TO ELEVATE
Electronic Shipping Solutions: Bolero International Ltd, E-Title Authority Pte Ltd, Global Share S.A. (edoxOnline platfor ...
Wednesday, 12 June 19
KOSPO INVITES BIDS FOR 140,000 MT OF 4,600 NCV COAL FOR SEP. 2019 LOADING
COALspot.com: South Korea state-owned utility Korea Southern Power Co. Ltd (KOSPO) issued a tender for 140,000 MT of minimum 4,600 kcal/kg NCV coal ...
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- Pipit Mutiara Jaya. PT, Indonesia
- Iligan Light & Power Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Baramulti Group, Indonesia
- Kartika Selabumi Mining - Indonesia
- Sindya Power Generating Company Private Ltd
- Rashtriya Ispat Nigam Limited - India
- Planning Commission, India
- Gujarat Electricity Regulatory Commission - India
- Chettinad Cement Corporation Ltd - India
- SMC Global Power, Philippines
- Indian Energy Exchange, India
- Independent Power Producers Association of India
- Kapuas Tunggal Persada - Indonesia
- Romanian Commodities Exchange
- Bhatia International Limited - India
- Riau Bara Harum - Indonesia
- Madhucon Powers Ltd - India
- The Treasury - Australian Government
- Kalimantan Lumbung Energi - Indonesia
- Australian Coal Association
- Ind-Barath Power Infra Limited - India
- Marubeni Corporation - India
- Georgia Ports Authority, United States
- Bayan Resources Tbk. - Indonesia
- Ambuja Cements Ltd - India
- GAC Shipping (India) Pvt Ltd
- Globalindo Alam Lestari - Indonesia
- Agrawal Coal Company - India
- GVK Power & Infra Limited - India
- Pendopo Energi Batubara - Indonesia
- Larsen & Toubro Limited - India
- Holcim Trading Pte Ltd - Singapore
- Kumho Petrochemical, South Korea
- Neyveli Lignite Corporation Ltd, - India
- Trasteel International SA, Italy
- Formosa Plastics Group - Taiwan
- Samtan Co., Ltd - South Korea
- ICICI Bank Limited - India
- Bangladesh Power Developement Board
- PTC India Limited - India
- TeaM Sual Corporation - Philippines
- Dalmia Cement Bharat India
- Oldendorff Carriers - Singapore
- Global Business Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Gujarat Sidhee Cement - India
- Standard Chartered Bank - UAE
- Power Finance Corporation Ltd., India
- Kobexindo Tractors - Indoneisa
- GMR Energy Limited - India
- Orica Mining Services - Indonesia
- Mintek Dendrill Indonesia
- Bukit Makmur.PT - Indonesia
- Banpu Public Company Limited - Thailand
- Renaissance Capital - South Africa
- Aboitiz Power Corporation - Philippines
- Sojitz Corporation - Japan
- Star Paper Mills Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Tamil Nadu electricity Board
- Gujarat Mineral Development Corp Ltd - India
- Kaltim Prima Coal - Indonesia
- Uttam Galva Steels Limited - India
- Manunggal Multi Energi - Indonesia
- McConnell Dowell - Australia
- Posco Energy - South Korea
- Siam City Cement PLC, Thailand
- Deloitte Consulting - India
- Karbindo Abesyapradhi - Indoneisa
- SMG Consultants - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Thiess Contractors Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- South Luzon Thermal Energy Corporation
- Leighton Contractors Pty Ltd - Australia
- Edison Trading Spa - Italy
- Maharashtra Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- Binh Thuan Hamico - Vietnam
- Bulk Trading Sa - Switzerland
- Coal and Oil Company - UAE
- Ceylon Electricity Board - Sri Lanka
- Petrochimia International Co. Ltd.- Taiwan
- Kepco SPC Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- The University of Queensland
- CIMB Investment Bank - Malaysia
- Tata Chemicals Ltd - India
- Metalloyd Limited - United Kingdom
- London Commodity Brokers - England
- Port Waratah Coal Services - Australia
- Jaiprakash Power Ventures ltd
- Indo Tambangraya Megah - Indonesia
- Cement Manufacturers Association - India
- Malabar Cements Ltd - India
- IEA Clean Coal Centre - UK
- TNB Fuel Sdn Bhd - Malaysia
- Australian Commodity Traders Exchange
- Simpson Spence & Young - Indonesia
- Ministry of Finance - Indonesia
- Alfred C Toepfer International GmbH - Germany
- ASAPP Information Group - India
- Petron Corporation, Philippines
- Mjunction Services Limited - India
- Merrill Lynch Commodities Europe
- Price Waterhouse Coopers - Russia
- Antam Resourcindo - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Chamber of Mines of South Africa
- Ministry of Mines - Canada
- Cigading International Bulk Terminal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Minerals Council of Australia
- Salva Resources Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- White Energy Company Limited
- Electricity Generating Authority of Thailand
- Energy Link Ltd, New Zealand
- Savvy Resources Ltd - HongKong
- Heidelberg Cement - Germany
- VISA Power Limited - India
- Mercuria Energy - Indonesia
- Siam City Cement - Thailand
- Bhushan Steel Limited - India
- Parry Sugars Refinery, India
- Vijayanagar Sugar Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Krishnapatnam Port Company Ltd. - India
- AsiaOL BioFuels Corp., Philippines
- Sinarmas Energy and Mining - Indonesia
- Meralco Power Generation, Philippines
- Central Java Power - Indonesia
- Sical Logistics Limited - India
- Essar Steel Hazira Ltd - India
- Therma Luzon, Inc, Philippines
- Electricity Authority, New Zealand
- Billiton Holdings Pty Ltd - Australia
- Eastern Energy - Thailand
- Aditya Birla Group - India
- Sarangani Energy Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Rio Tinto Coal - Australia
- Makarim & Taira - Indonesia
- Commonwealth Bank - Australia
- Straits Asia Resources Limited - Singapore
- Central Electricity Authority - India
- India Bulls Power Limited - India
- Timah Investasi Mineral - Indoneisa
- Indika Energy - Indonesia
- Indogreen Group - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Indonesian Coal Mining Association
- Grasim Industreis Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Jindal Steel & Power Ltd - India
- Interocean Group of Companies - India
- Sakthi Sugars Limited - India
- Thai Mozambique Logistica
- Anglo American - United Kingdom
- LBH Netherlands Bv - Netherlands
- Goldman Sachs - Singapore
- Wood Mackenzie - Singapore
- Medco Energi Mining Internasional
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wilmar Investment Holdings
- Latin American Coal - Colombia
- Mercator Lines Limited - India
- International Coal Ventures Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Bharathi Cement Corporation - India
- Orica Australia Pty. Ltd.
- Meenaskhi Energy Private Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SN Aboitiz Power Inc, Philippines
- Africa Commodities Group - South Africa
- Coastal Gujarat Power Limited - India
- Indian Oil Corporation Limited
- Kideco Jaya Agung - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Attock Cement Pakistan Limited
- Xindia Steels Limited - India
- PowerSource Philippines DevCo
- OPG Power Generation Pvt Ltd - India
- MS Steel International - UAE
- Asmin Koalindo Tuhup - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Carbofer General Trading SA - India
- Borneo Indobara - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Parliament of New Zealand
- Altura Mining Limited, Indonesia
- Energy Development Corp, Philippines
- Videocon Industries ltd - India
- Vizag Seaport Private Limited - India
- CNBM International Corporation - China
- Toyota Tsusho Corporation, Japan
- European Bulk Services B.V. - Netherlands
- Semirara Mining Corp, Philippines
- Economic Council, Georgia
- Jorong Barutama Greston.PT - Indonesia
- Barasentosa Lestari - Indonesia
- Bhoruka Overseas - Indonesia
- Singapore Mercantile Exchange
- Eastern Coal Council - USA
- Lanco Infratech Ltd - India
- Coalindo Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Bukit Baiduri Energy - Indonesia
- New Zealand Coal & Carbon
- Ministry of Transport, Egypt
- The State Trading Corporation of India Ltd
- PetroVietnam Power Coal Import and Supply Company
- Dong Bac Coal Mineral Investment Coporation - Vietnam
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