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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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Saturday, 06 April 19
SUPRAMAX: IT WAS A POOR WEEK OVERALL FOR THE BALTIC SUPRAMAX INDEX, WHICH LOST GROUND - BALTIC BRIEFING
Capesize
The Capesize market over the past week looked to have found a floor on Tuesday with the BCI 5TC at $3460 before firming into the rest ...
Thursday, 04 April 19
OVERSUPPLY STILL MAJOR CHALLENGE WARNS ICS
Speaking in Istanbul, Simon Bennett, Deputy Secretary General of the International Chamber of Shipping (ICS) warned that avoiding overcapacity and ...
Thursday, 04 April 19
GLENCORE, TOHOKU ELECTRIC SET COAL CONTRACT PRICE AT $94.75/T - SOURCE, REUTERS REPORTED
Global miner Glencore and Japan’s Tohoku Electric Power agreed on a price of $94.75 per tonne for supplies of thermal coal from Australia for ...
Monday, 01 April 19
FORCE MAJEURE SUCCESS NOT A SEA CHANGE - BALTIC EXCHANGE
KNOWLEDGE TO ELEVATE
It is difficult to successfully argue that contractual performance has been prevented or delayed by force majeure. This i ...
Monday, 01 April 19
AUSTRALIAN COAL AT RISK FROM CHINA MOVE, WARNS GOVERNMENT REPORT - SYDNEY MORNING HERALD
A new government report warns China’s restrictions on coal imports is the number one risk for Australian coal this year and could lead to a s ...
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- New Zealand Coal & Carbon
- Mintek Dendrill Indonesia
- Banpu Public Company Limited - Thailand
- Electricity Generating Authority of Thailand
- Aboitiz Power Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- Jaiprakash Power Ventures ltd
- TNB Fuel Sdn Bhd - Malaysia
- International Coal Ventures Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Indo Tambangraya Megah - Indonesia
- Coastal Gujarat Power Limited - India
- SMC Global Power, Philippines
- Indika Energy - Indonesia
- Ministry of Mines - Canada
- Ministry of Transport, Egypt
- Krishnapatnam Port Company Ltd. - India
- Tamil Nadu electricity Board
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Antam Resourcindo - Indonesia
- Bharathi Cement Corporation - India
- Lanco Infratech Ltd - India
- PowerSource Philippines DevCo
- Renaissance Capital - South Africa
- Edison Trading Spa - Italy
- Bhatia International Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Barasentosa Lestari - Indonesia
- Jindal Steel & Power Ltd - India
- Toyota Tsusho Corporation, Japan
- Siam City Cement PLC, Thailand
- Neyveli Lignite Corporation Ltd, - India
- Chamber of Mines of South Africa
- Heidelberg Cement - Germany
- Price Waterhouse Coopers - Russia
- TeaM Sual Corporation - Philippines
- Malabar Cements Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maharashtra Electricity Regulatory Commission - India
- Sical Logistics Limited - India
- Timah Investasi Mineral - Indoneisa
- European Bulk Services B.V. - Netherlands
- Ind-Barath Power Infra Limited - India
- Mjunction Services Limited - India
- Gujarat Sidhee Cement - India
- Sarangani Energy Corporation, Philippines
- ASAPP Information Group - India
- Samtan Co., Ltd - South Korea
- Merrill Lynch Commodities Europe
- Orica Mining Services - Indonesia
- Port Waratah Coal Services - Australia
- Kumho Petrochemical, South Korea
- London Commodity Brokers - England
- Kaltim Prima Coal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Bukit Makmur.PT - Indonesia
- Eastern Coal Council - USA
- PTC India Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ministry of Finance - Indonesia
- Carbofer General Trading SA - India
- Chettinad Cement Corporation Ltd - India
- Baramulti Group, Indonesia
- Global Coal Blending Company Limited - Australia
- Karaikal Port Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- GVK Power & Infra Limited - India
- Star Paper Mills Limited - India
- Georgia Ports Authority, United States
- Grasim Industreis Ltd - India
- Kideco Jaya Agung - Indonesia
- Central Electricity Authority - India
- AsiaOL BioFuels Corp., Philippines
- PNOC Exploration Corporation - Philippines
- Latin American Coal - Colombia
- Indogreen Group - Indonesia
- Uttam Galva Steels Limited - India
- Marubeni Corporation - India
- Globalindo Alam Lestari - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Power Finance Corporation Ltd., India
- VISA Power Limited - India
- Wilmar Investment Holdings
- The Treasury - Australian Government
- Kartika Selabumi Mining - Indonesia
- Interocean Group of Companies - India
- Riau Bara Harum - Indonesia
- Makarim & Taira - Indonesia
- Petron Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Oldendorff Carriers - Singapore
- Pendopo Energi Batubara - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Coalindo Energy - Indonesia
- Sojitz Corporation - Japan
- Vijayanagar Sugar Pvt Ltd - India
- Mercuria Energy - Indonesia
- Rio Tinto Coal - Australia
- San Jose City I Power Corp, Philippines
- Larsen & Toubro Limited - India
- Bulk Trading Sa - Switzerland
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Formosa Plastics Group - Taiwan
- Anglo American - United Kingdom
- Wood Mackenzie - Singapore
- SN Aboitiz Power Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Essar Steel Hazira Ltd - India
- Binh Thuan Hamico - Vietnam
- Kohat Cement Company Ltd. - Pakistan
- Energy Development Corp, Philippines
- Orica Australia Pty. Ltd.
- Bhushan Steel Limited - India
- White Energy Company Limited
- Manunggal Multi Energi - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Directorate Of Revenue Intelligence - India
- Sree Jayajothi Cements Limited - India
- Billiton Holdings Pty Ltd - Australia
- Agrawal Coal Company - India
- Coal and Oil Company - UAE
- MS Steel International - UAE
- Semirara Mining and Power Corporation, Philippines
- Deloitte Consulting - India
- Kepco SPC Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Parry Sugars Refinery, India
- Bahari Cakrawala Sebuku - Indonesia
- Mercator Lines Limited - India
- Commonwealth Bank - Australia
- Indian Oil Corporation Limited
- Vizag Seaport Private Limited - India
- Rashtriya Ispat Nigam Limited - India
- The University of Queensland
- Metalloyd Limited - United Kingdom
- Savvy Resources Ltd - HongKong
- South Luzon Thermal Energy Corporation
- Independent Power Producers Association of India
- Altura Mining Limited, Indonesia
- Dalmia Cement Bharat India
- Australian Commodity Traders Exchange
- Cement Manufacturers Association - India
- Asmin Koalindo Tuhup - Indonesia
- Videocon Industries ltd - India
- SMG Consultants - Indonesia
- Trasteel International SA, Italy
- Meralco Power Generation, Philippines
- Ambuja Cements Ltd - India
- Romanian Commodities Exchange
- Global Business Power Corporation, Philippines
- Singapore Mercantile Exchange
- Vedanta Resources Plc - India
- McConnell Dowell - Australia
- LBH Netherlands Bv - Netherlands
- Thai Mozambique Logistica
- Aditya Birla Group - India
- Holcim Trading Pte Ltd - Singapore
- GAC Shipping (India) Pvt Ltd
- ICICI Bank Limited - India
- Xindia Steels Limited - India
- Sakthi Sugars Limited - India
- Australian Coal Association
- Parliament of New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Eastern Energy - Thailand
- Minerals Council of Australia
- Bayan Resources Tbk. - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Jorong Barutama Greston.PT - Indonesia
- Iligan Light & Power Inc, Philippines
- CNBM International Corporation - China
- Straits Asia Resources Limited - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Semirara Mining Corp, Philippines
- Madhucon Powers Ltd - India
- GMR Energy Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Therma Luzon, Inc, Philippines
- Electricity Authority, New Zealand
- Bangladesh Power Developement Board
- Central Java Power - Indonesia
- Energy Link Ltd, New Zealand
- Indian Energy Exchange, India
- Economic Council, Georgia
- Posco Energy - South Korea
- Miang Besar Coal Terminal - Indonesia
- Planning Commission, India
- Borneo Indobara - Indonesia
- Medco Energi Mining Internasional
- Goldman Sachs - Singapore
- Standard Chartered Bank - UAE
- The State Trading Corporation of India Ltd
- CIMB Investment Bank - Malaysia
- Maheswari Brothers Coal Limited - India
- India Bulls Power Limited - India
- Indonesian Coal Mining Association
- Tata Chemicals Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Meenaskhi Energy Private Limited - India
- OPG Power Generation Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Intertek Mineral Services - Indonesia
- IEA Clean Coal Centre - UK
- Kalimantan Lumbung Energi - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Africa Commodities Group - South Africa
- Salva Resources Pvt Ltd - India
- Attock Cement Pakistan Limited
- Bukit Baiduri Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Siam City Cement - Thailand
- Thiess Contractors Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
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