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