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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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Thursday, 16 May 19
SUPRAMAX: INDO/CHINA COAL RV TRADING AROUND US$ 9,000 BSS S.CHINA DELIVERY - FEARNLEYS
Capesize
This volatile segment is trying to find a clear direction from the present US$ 12,000/day earnings for standard units says Fearnleys W ...
Wednesday, 15 May 19
SHIPPING MARKET INSIGHT - THEODORE NTALAKOS
Modern warfare - Trade wars & sanctions
As of May 1st, the U.S. has ended waivers to the sanctions that had allowed the top buyers of Irani ...
Monday, 13 May 19
INDONESIAN COAL PRICE REFERENCE CONTINUES TO FALL
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down the benchmark price of Indonesian thermal ...
Monday, 13 May 19
SUPRAMAX: SOUTHEAST ASIA THE MARKET SAW BETTER DEMAND - BALTIC BRIEFING
Cape
The market continued its rollercoaster ride last week opening with negative sentiment, but turning around in dramatic fashion by the week& ...
Thursday, 09 May 19
DEEP OFFSHORE SOUTHEAST ASIA CONGRESS 2019
Deep Offshore Southeast Asia Congress 2019
Event Date:2-3th July. 2019t
Location: Jakarta, Indonesia
Sarawak Shell Berhad (S ...
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- ICICI Bank Limited - India
- Central Electricity Authority - India
- Oldendorff Carriers - Singapore
- Timah Investasi Mineral - Indoneisa
- Bayan Resources Tbk. - Indonesia
- Pendopo Energi Batubara - Indonesia
- PTC India Limited - India
- Latin American Coal - Colombia
- Malabar Cements Ltd - India
- Sical Logistics Limited - India
- Dalmia Cement Bharat India
- Siam City Cement - Thailand
- Aditya Birla Group - India
- Sarangani Energy Corporation, Philippines
- MS Steel International - UAE
- Kartika Selabumi Mining - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Global Business Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Asmin Koalindo Tuhup - Indonesia
- Standard Chartered Bank - UAE
- Kobexindo Tractors - Indoneisa
- Bhushan Steel Limited - India
- GMR Energy Limited - India
- Simpson Spence & Young - Indonesia
- Gujarat Sidhee Cement - India
- Aboitiz Power Corporation - Philippines
- Merrill Lynch Commodities Europe
- Baramulti Group, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Kalimantan Lumbung Energi - Indonesia
- Formosa Plastics Group - Taiwan
- Bulk Trading Sa - Switzerland
- San Jose City I Power Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- Kepco SPC Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Xindia Steels Limited - India
- Eastern Coal Council - USA
- Independent Power Producers Association of India
- Samtan Co., Ltd - South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- GAC Shipping (India) Pvt Ltd
- GVK Power & Infra Limited - India
- Port Waratah Coal Services - Australia
- Neyveli Lignite Corporation Ltd, - India
- Semirara Mining Corp, Philippines
- Larsen & Toubro Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Uttam Galva Steels Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Holcim Trading Pte Ltd - Singapore
- Toyota Tsusho Corporation, Japan
- Krishnapatnam Port Company Ltd. - India
- CNBM International Corporation - China
- SN Aboitiz Power Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Ministry of Transport, Egypt
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Interocean Group of Companies - India
- Electricity Generating Authority of Thailand
- Kaltim Prima Coal - Indonesia
- Sindya Power Generating Company Private Ltd
- Salva Resources Pvt Ltd - India
- Heidelberg Cement - Germany
- Commonwealth Bank - Australia
- Ceylon Electricity Board - Sri Lanka
- CIMB Investment Bank - Malaysia
- Meenaskhi Energy Private Limited - India
- Bhatia International Limited - India
- IEA Clean Coal Centre - UK
- McConnell Dowell - Australia
- Videocon Industries ltd - India
- Romanian Commodities Exchange
- Kohat Cement Company Ltd. - Pakistan
- Global Coal Blending Company Limited - Australia
- Directorate Of Revenue Intelligence - India
- Attock Cement Pakistan Limited
- Orica Australia Pty. Ltd.
- Goldman Sachs - Singapore
- Makarim & Taira - Indonesia
- Renaissance Capital - South Africa
- ASAPP Information Group - India
- Orica Mining Services - Indonesia
- Mintek Dendrill Indonesia
- Africa Commodities Group - South Africa
- SMG Consultants - Indonesia
- International Coal Ventures Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Energy Development Corp, Philippines
- White Energy Company Limited
- Indonesian Coal Mining Association
- Anglo American - United Kingdom
- Intertek Mineral Services - Indonesia
- Bangladesh Power Developement Board
- Essar Steel Hazira Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Binh Thuan Hamico - Vietnam
- Bukit Makmur.PT - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Jindal Steel & Power Ltd - India
- Thiess Contractors Indonesia
- Tamil Nadu electricity Board
- OPG Power Generation Pvt Ltd - India
- Australian Commodity Traders Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kumho Petrochemical, South Korea
- Coal and Oil Company - UAE
- Straits Asia Resources Limited - Singapore
- Riau Bara Harum - Indonesia
- Ambuja Cements Ltd - India
- Electricity Authority, New Zealand
- Petron Corporation, Philippines
- Energy Link Ltd, New Zealand
- The University of Queensland
- Star Paper Mills Limited - India
- Altura Mining Limited, Indonesia
- Mercator Lines Limited - India
- Power Finance Corporation Ltd., India
- Therma Luzon, Inc, Philippines
- SMC Global Power, Philippines
- Vedanta Resources Plc - India
- Bhoruka Overseas - Indonesia
- Banpu Public Company Limited - Thailand
- Singapore Mercantile Exchange
- Parliament of New Zealand
- Borneo Indobara - Indonesia
- Ministry of Mines - Canada
- Bharathi Cement Corporation - India
- Madhucon Powers Ltd - India
- Indian Energy Exchange, India
- Siam City Cement PLC, Thailand
- Indo Tambangraya Megah - Indonesia
- Thai Mozambique Logistica
- London Commodity Brokers - England
- India Bulls Power Limited - India
- Trasteel International SA, Italy
- Sojitz Corporation - Japan
- Eastern Energy - Thailand
- Rashtriya Ispat Nigam Limited - India
- Ministry of Finance - Indonesia
- Savvy Resources Ltd - HongKong
- Jorong Barutama Greston.PT - Indonesia
- Wilmar Investment Holdings
- Chettinad Cement Corporation Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Sree Jayajothi Cements Limited - India
- Ind-Barath Power Infra Limited - India
- Rio Tinto Coal - Australia
- Kideco Jaya Agung - Indonesia
- Price Waterhouse Coopers - Russia
- European Bulk Services B.V. - Netherlands
- TNB Fuel Sdn Bhd - Malaysia
- Lanco Infratech Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Posco Energy - South Korea
- Cement Manufacturers Association - India
- Minerals Council of Australia
- Agrawal Coal Company - India
- PNOC Exploration Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Australian Coal Association
- Karbindo Abesyapradhi - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- VISA Power Limited - India
- Meralco Power Generation, Philippines
- Parry Sugars Refinery, India
- Indogreen Group - Indonesia
- The State Trading Corporation of India Ltd
- Grasim Industreis Ltd - India
- Sakthi Sugars Limited - India
- Antam Resourcindo - Indonesia
- Coalindo Energy - Indonesia
- Mjunction Services Limited - India
- The Treasury - Australian Government
- Coastal Gujarat Power Limited - India
- Central Java Power - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Tata Chemicals Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Deloitte Consulting - India
- Indika Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Edison Trading Spa - Italy
- Economic Council, Georgia
- Leighton Contractors Pty Ltd - Australia
- Iligan Light & Power Inc, Philippines
- Jaiprakash Power Ventures ltd
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- LBH Netherlands Bv - Netherlands
- Karaikal Port Pvt Ltd - India
- Wood Mackenzie - Singapore
- Bukit Baiduri Energy - Indonesia
- Georgia Ports Authority, United States
- Marubeni Corporation - India
- Kapuas Tunggal Persada - Indonesia
- Carbofer General Trading SA - India
- Vizag Seaport Private Limited - India
- Chamber of Mines of South Africa
- South Luzon Thermal Energy Corporation
- New Zealand Coal & Carbon
- Indian Oil Corporation Limited
- PowerSource Philippines DevCo
- Mercuria Energy - Indonesia
- Planning Commission, India
- Medco Energi Mining Internasional
- Gujarat Electricity Regulatory Commission - India
- IHS Mccloskey Coal Group - USA
- Manunggal Multi Energi - Indonesia
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