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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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Sunday, 09 June 19
SUPRAMAX: ASIA LOST GROUND; THE INDIAN OCEAN SAW SLOWER ACTIVITY - BALTIC BRIEFING
Capesize
The market continued in an unusually steady ascent last week. With no major news in the market, each day improved on the last, breakin ...
Friday, 07 June 19
KOEN INVITED BIDS FOR 1.87 MILLION TONS OF COAL FOR JULY - OCTOBER 2019 DELIVERY
COALspot.com: South Korea’s KOREA SOUTH-EAST POWER CO., LTD. (KOEN) has issued an international tender for 1,700,000 to 1,870,000 Metric Tons ...
Wednesday, 05 June 19
SHIPPING MARKET INSIGHT - INTERMODAL
The first semester of 2019 started as a fairly positive semester for the offshore sector whilst there was a recovery on crude prices, as well as a ...
Tuesday, 04 June 19
MARPOL ANNEX VI - SULPHUR CAP 2020 - DEMYSTIFYING THE FONAR - SKULD
KNOWLEDGE TO ELEVATE
Fuel Oil Non-Availability Report (FONAR) is primarily a discretionary tool for a Member State to lessen the breach of MAR ...
Monday, 03 June 19
SUPRAMAX: A 61,000 TONNER OPEN NORTH CHINA, FIXING A TRIP VIA INDONESIA, REDELIVERY SOUTHEAST ASIA AT $7,500 - BALTIC BRIEFING
Capesize
The market continued its steady ascent over the past week to improved levels. The TC average opened the previous week at $12,243 and c ...
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- Parliament of New Zealand
- The Treasury - Australian Government
- Trasteel International SA, Italy
- Ind-Barath Power Infra Limited - India
- Barasentosa Lestari - Indonesia
- Essar Steel Hazira Ltd - India
- SN Aboitiz Power Inc, Philippines
- India Bulls Power Limited - India
- GMR Energy Limited - India
- Bhatia International Limited - India
- Madhucon Powers Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Grasim Industreis Ltd - India
- Antam Resourcindo - Indonesia
- Commonwealth Bank - Australia
- Vedanta Resources Plc - India
- Iligan Light & Power Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Orica Mining Services - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Semirara Mining and Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Banpu Public Company Limited - Thailand
- Planning Commission, India
- ASAPP Information Group - India
- OPG Power Generation Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Eastern Coal Council - USA
- Kumho Petrochemical, South Korea
- Sojitz Corporation - Japan
- Petron Corporation, Philippines
- The University of Queensland
- Cigading International Bulk Terminal - Indonesia
- Siam City Cement PLC, Thailand
- IEA Clean Coal Centre - UK
- Videocon Industries ltd - India
- Formosa Plastics Group - Taiwan
- Simpson Spence & Young - Indonesia
- Gujarat Sidhee Cement - India
- Directorate General of MIneral and Coal - Indonesia
- Singapore Mercantile Exchange
- Kapuas Tunggal Persada - Indonesia
- Coastal Gujarat Power Limited - India
- Power Finance Corporation Ltd., India
- GN Power Mariveles Coal Plant, Philippines
- White Energy Company Limited
- Goldman Sachs - Singapore
- Energy Link Ltd, New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- Sarangani Energy Corporation, Philippines
- Mjunction Services Limited - India
- Anglo American - United Kingdom
- Lanco Infratech Ltd - India
- GAC Shipping (India) Pvt Ltd
- Bukit Baiduri Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Baramulti Group, Indonesia
- Bangladesh Power Developement Board
- Thiess Contractors Indonesia
- Larsen & Toubro Limited - India
- Carbofer General Trading SA - India
- Coalindo Energy - Indonesia
- Sical Logistics Limited - India
- South Luzon Thermal Energy Corporation
- Minerals Council of Australia
- Karaikal Port Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- IHS Mccloskey Coal Group - USA
- Riau Bara Harum - Indonesia
- Africa Commodities Group - South Africa
- TeaM Sual Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
- Star Paper Mills Limited - India
- Central Electricity Authority - India
- Ministry of Finance - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- CIMB Investment Bank - Malaysia
- Aditya Birla Group - India
- Tata Chemicals Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Indogreen Group - Indonesia
- Jindal Steel & Power Ltd - India
- Kartika Selabumi Mining - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Dalmia Cement Bharat India
- MS Steel International - UAE
- Vijayanagar Sugar Pvt Ltd - India
- Mintek Dendrill Indonesia
- PowerSource Philippines DevCo
- Australian Commodity Traders Exchange
- Bhushan Steel Limited - India
- Pendopo Energi Batubara - Indonesia
- Posco Energy - South Korea
- Sree Jayajothi Cements Limited - India
- Sindya Power Generating Company Private Ltd
- Sakthi Sugars Limited - India
- New Zealand Coal & Carbon
- Rio Tinto Coal - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Orica Australia Pty. Ltd.
- Interocean Group of Companies - India
- ICICI Bank Limited - India
- Alfred C Toepfer International GmbH - Germany
- Global Business Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Global Green Power PLC Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Globalindo Alam Lestari - Indonesia
- Independent Power Producers Association of India
- Indika Energy - Indonesia
- Edison Trading Spa - Italy
- Electricity Generating Authority of Thailand
- Port Waratah Coal Services - Australia
- Deloitte Consulting - India
- Ministry of Transport, Egypt
- Vizag Seaport Private Limited - India
- Agrawal Coal Company - India
- Kideco Jaya Agung - Indonesia
- Eastern Energy - Thailand
- Medco Energi Mining Internasional
- Bulk Trading Sa - Switzerland
- VISA Power Limited - India
- Merrill Lynch Commodities Europe
- Salva Resources Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Maheswari Brothers Coal Limited - India
- Mercuria Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Central Java Power - Indonesia
- Metalloyd Limited - United Kingdom
- Oldendorff Carriers - Singapore
- Georgia Ports Authority, United States
- Bhoruka Overseas - Indonesia
- Meenaskhi Energy Private Limited - India
- Uttam Galva Steels Limited - India
- Wood Mackenzie - Singapore
- Toyota Tsusho Corporation, Japan
- Renaissance Capital - South Africa
- Electricity Authority, New Zealand
- McConnell Dowell - Australia
- Marubeni Corporation - India
- SMC Global Power, Philippines
- Romanian Commodities Exchange
- Indo Tambangraya Megah - Indonesia
- Savvy Resources Ltd - HongKong
- Wilmar Investment Holdings
- Kepco SPC Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Makarim & Taira - Indonesia
- Xindia Steels Limited - India
- LBH Netherlands Bv - Netherlands
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bank of Tokyo Mitsubishi UFJ Ltd
- Cement Manufacturers Association - India
- Siam City Cement - Thailand
- Tamil Nadu electricity Board
- Global Coal Blending Company Limited - Australia
- Intertek Mineral Services - Indonesia
- Heidelberg Cement - Germany
- Bayan Resources Tbk. - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- CNBM International Corporation - China
- Meralco Power Generation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Kobexindo Tractors - Indoneisa
- Parry Sugars Refinery, India
- Bharathi Cement Corporation - India
- Chamber of Mines of South Africa
- Timah Investasi Mineral - Indoneisa
- Indonesian Coal Mining Association
- Energy Development Corp, Philippines
- Indian Energy Exchange, India
- The State Trading Corporation of India Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indian Oil Corporation Limited
- AsiaOL BioFuels Corp., Philippines
- Therma Luzon, Inc, Philippines
- Mercator Lines Limited - India
- Kaltim Prima Coal - Indonesia
- Samtan Co., Ltd - South Korea
- Thai Mozambique Logistica
- Ambuja Cements Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Attock Cement Pakistan Limited
- Holcim Trading Pte Ltd - Singapore
- Ceylon Electricity Board - Sri Lanka
- GVK Power & Infra Limited - India
- Gujarat Electricity Regulatory Commission - India
- Straits Asia Resources Limited - Singapore
- Price Waterhouse Coopers - Russia
- Ministry of Mines - Canada
- London Commodity Brokers - England
- SMG Consultants - Indonesia
- Semirara Mining Corp, Philippines
- Altura Mining Limited, Indonesia
- Australian Coal Association
- Binh Thuan Hamico - Vietnam
- Economic Council, Georgia
- Borneo Indobara - Indonesia
- Directorate Of Revenue Intelligence - India
- Kohat Cement Company Ltd. - Pakistan
- Standard Chartered Bank - UAE
- Latin American Coal - Colombia
- Jaiprakash Power Ventures ltd
- Manunggal Multi Energi - Indonesia
- PTC India Limited - India
- Coal and Oil Company - UAE
- Malabar Cements Ltd - India
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