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