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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, 28 April 19
SUPRAMAX: A 54,000DWT VESSEL OPEN GRESIK FIXED VIA AUSTRALIA, REDELIVERY CHINA, IN THE MID $12,000S - BALTIC BRIEFING
Capesize
Following the holidays, activity increased in both the Pacific and Atlantic Basins. The 5TC average rallied, closing at $8,596, up $1, ...
Wednesday, 24 April 19
PANAMAX: IN THE EAST, THE MARKET MOVED SIDE-WAYS, WITH FEWER COAL CARGOES FROM INDONESIA PUTTING PRESSURE ON RATES - INTERMODAL
Sentiment in the Dry Bulk market slowly but steadily kept improving last week as Capesize rates remained in recovery mode and Panamax earnings also ...
Monday, 22 April 19
COAL INDIA TO ASK POWER PLANTS TO CUT COAL IMPORTS - DNA
Co to encourage import substitution with domestic supplies at power plants
Surge in coal imports has now forced Coal India Ltd (CIL) ...
Thursday, 18 April 19
BIMCO SEES HARD TIMES AHEAD FOR CAPESIZES
China’s increased use of scrap metal for its production of crude steel is fundamentally critical to the dry bulk shipping industry. Mostly Ca ...
Wednesday, 17 April 19
ONCE AGAIN WE FACED WITH THE SITUATION OF THE DRY BALTIC INDEX BEING BELOW 1,000 POINTS - INTERMODAL
Once again we are faced with the situation of the Dry Baltic Index being below 1,000 points. In a market where the feeling of insecurity is almost ...
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- Georgia Ports Authority, United States
- Toyota Tsusho Corporation, Japan
- Krishnapatnam Port Company Ltd. - India
- Posco Energy - South Korea
- GVK Power & Infra Limited - India
- Merrill Lynch Commodities Europe
- ICICI Bank Limited - India
- Riau Bara Harum - Indonesia
- Minerals Council of Australia
- Commonwealth Bank - Australia
- Sical Logistics Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coastal Gujarat Power Limited - India
- Standard Chartered Bank - UAE
- Jindal Steel & Power Ltd - India
- Thiess Contractors Indonesia
- Kumho Petrochemical, South Korea
- Coal and Oil Company - UAE
- Mercator Lines Limited - India
- Goldman Sachs - Singapore
- Romanian Commodities Exchange
- Energy Development Corp, Philippines
- Latin American Coal - Colombia
- Ind-Barath Power Infra Limited - India
- Borneo Indobara - Indonesia
- Semirara Mining Corp, Philippines
- Bhoruka Overseas - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Wilmar Investment Holdings
- Metalloyd Limited - United Kingdom
- Videocon Industries ltd - India
- Kepco SPC Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Heidelberg Cement - Germany
- OPG Power Generation Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Bangladesh Power Developement Board
- Vedanta Resources Plc - India
- Anglo American - United Kingdom
- Orica Australia Pty. Ltd.
- GMR Energy Limited - India
- Binh Thuan Hamico - Vietnam
- PowerSource Philippines DevCo
- Global Business Power Corporation, Philippines
- Indonesian Coal Mining Association
- Carbofer General Trading SA - India
- Meralco Power Generation, Philippines
- Uttam Galva Steels Limited - India
- VISA Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Banpu Public Company Limited - Thailand
- Miang Besar Coal Terminal - Indonesia
- Jaiprakash Power Ventures ltd
- Coalindo Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Chamber of Mines of South Africa
- Madhucon Powers Ltd - India
- Meenaskhi Energy Private Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Iligan Light & Power Inc, Philippines
- Cement Manufacturers Association - India
- Rio Tinto Coal - Australia
- Power Finance Corporation Ltd., India
- Australian Commodity Traders Exchange
- Malabar Cements Ltd - India
- Gujarat Sidhee Cement - India
- Central Electricity Authority - India
- Salva Resources Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Kalimantan Lumbung Energi - Indonesia
- GAC Shipping (India) Pvt Ltd
- Edison Trading Spa - Italy
- Siam City Cement PLC, Thailand
- Indian Energy Exchange, India
- Antam Resourcindo - Indonesia
- Global Green Power PLC Corporation, Philippines
- Parry Sugars Refinery, India
- Maheswari Brothers Coal Limited - India
- Independent Power Producers Association of India
- Ministry of Mines - Canada
- McConnell Dowell - Australia
- Bukit Makmur.PT - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Parliament of New Zealand
- Electricity Generating Authority of Thailand
- Aditya Birla Group - India
- Essar Steel Hazira Ltd - India
- Lanco Infratech Ltd - India
- Dalmia Cement Bharat India
- Attock Cement Pakistan Limited
- Karbindo Abesyapradhi - Indoneisa
- Marubeni Corporation - India
- Sarangani Energy Corporation, Philippines
- Barasentosa Lestari - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Kaltim Prima Coal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Eastern Coal Council - USA
- Interocean Group of Companies - India
- White Energy Company Limited
- SMG Consultants - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Therma Luzon, Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Samtan Co., Ltd - South Korea
- Simpson Spence & Young - Indonesia
- Manunggal Multi Energi - Indonesia
- IHS Mccloskey Coal Group - USA
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Timah Investasi Mineral - Indoneisa
- Eastern Energy - Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Siam City Cement - Thailand
- Medco Energi Mining Internasional
- Bulk Trading Sa - Switzerland
- Indian Oil Corporation Limited
- Ministry of Finance - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Star Paper Mills Limited - India
- Economic Council, Georgia
- The State Trading Corporation of India Ltd
- Savvy Resources Ltd - HongKong
- Jorong Barutama Greston.PT - Indonesia
- Baramulti Group, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Neyveli Lignite Corporation Ltd, - India
- Ambuja Cements Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Bhatia International Limited - India
- Electricity Authority, New Zealand
- Deloitte Consulting - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kartika Selabumi Mining - Indonesia
- Globalindo Alam Lestari - Indonesia
- Mercuria Energy - Indonesia
- Grasim Industreis Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Bayan Resources Tbk. - Indonesia
- Indo Tambangraya Megah - Indonesia
- Planning Commission, India
- Altura Mining Limited, Indonesia
- Bharathi Cement Corporation - India
- International Coal Ventures Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Central Java Power - Indonesia
- Pendopo Energi Batubara - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Directorate Of Revenue Intelligence - India
- CIMB Investment Bank - Malaysia
- PetroVietnam Power Coal Import and Supply Company
- Bhushan Steel Limited - India
- Semirara Mining and Power Corporation, Philippines
- Orica Mining Services - Indonesia
- Mintek Dendrill Indonesia
- Petron Corporation, Philippines
- Tamil Nadu electricity Board
- Sree Jayajothi Cements Limited - India
- Alfred C Toepfer International GmbH - Germany
- ASAPP Information Group - India
- Singapore Mercantile Exchange
- European Bulk Services B.V. - Netherlands
- The University of Queensland
- Straits Asia Resources Limited - Singapore
- Formosa Plastics Group - Taiwan
- Africa Commodities Group - South Africa
- PTC India Limited - India
- Agrawal Coal Company - India
- Indogreen Group - Indonesia
- Trasteel International SA, Italy
- Mjunction Services Limited - India
- Intertek Mineral Services - Indonesia
- Ministry of Transport, Egypt
- Sakthi Sugars Limited - India
- SMC Global Power, Philippines
- Energy Link Ltd, New Zealand
- Larsen & Toubro Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- SN Aboitiz Power Inc, Philippines
- San Jose City I Power Corp, Philippines
- Oldendorff Carriers - Singapore
- Australian Coal Association
- Gujarat Electricity Regulatory Commission - India
- London Commodity Brokers - England
- Tata Chemicals Ltd - India
- The Treasury - Australian Government
- MS Steel International - UAE
- Makarim & Taira - Indonesia
- CNBM International Corporation - China
- Sojitz Corporation - Japan
- Bukit Baiduri Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Thai Mozambique Logistica
- South Luzon Thermal Energy Corporation
- PNOC Exploration Corporation - Philippines
- India Bulls Power Limited - India
- Price Waterhouse Coopers - Russia
- LBH Netherlands Bv - Netherlands
- Indika Energy - Indonesia
- Xindia Steels Limited - India
- Kobexindo Tractors - Indoneisa
- Port Waratah Coal Services - Australia
- Directorate General of MIneral and Coal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Wood Mackenzie - Singapore
- Global Coal Blending Company Limited - Australia
- GN Power Mariveles Coal Plant, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Sindya Power Generating Company Private Ltd
- Ceylon Electricity Board - Sri Lanka
- New Zealand Coal & Carbon
- Renaissance Capital - South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- TeaM Sual Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
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