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