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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, 30 March 19
KOEN INVITES BIDS FOR 450,000 TONS OF (SUB) BITUMINOUS COAL FOR H1 AND JUNE 2019
South Korea state-owned utility KOREA SOUTH-EAST POWER CO., LTD. (KOEN) issued a tender for total 450,000 MT of min. 4300, 3500 and 5600 NCV ...
Wednesday, 27 March 19
SHIPPING MARKET INSIGHT - INTERMODAL
Contrary to the December 2018 forecasts but in line with the expectations of the dry bulk market, the first quarter of the year closed negatively. ...
Saturday, 23 March 19
IT WAS A POSITIVE WEEK FOR THE HANDY SIZE MARKET - BALTIC BRIEFING
Capesize
The big ships endured heavy losses last week extinguishing any hopes from the recent minor rally. Negative sentiment gained pace throu ...
Friday, 22 March 19
CHINA MARKET: COAL OUT IN THE COLD - BUSINESS RECORDER
Though China maintains there is no ban, China-bound Australian coal shipments are looking for a new home. For the past few months, coal cargoes are ...
Thursday, 21 March 19
PRICE PLUNGE AS CHINESE LEAVE THERMAL COAL OUT IN THE COLD - AUSTRALIAN FINANCIAL REVIEW
Thermal coal exporter New Hope Corporation says China’s shipment squeeze on Australia is putting downward pressure on prices in all markets i ...
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- Posco Energy - South Korea
- Africa Commodities Group - South Africa
- Australian Coal Association
- Oldendorff Carriers - Singapore
- Attock Cement Pakistan Limited
- Eastern Energy - Thailand
- Lanco Infratech Ltd - India
- Kaltim Prima Coal - Indonesia
- Chamber of Mines of South Africa
- London Commodity Brokers - England
- CNBM International Corporation - China
- Essar Steel Hazira Ltd - India
- Interocean Group of Companies - India
- Directorate Of Revenue Intelligence - India
- Global Coal Blending Company Limited - Australia
- Kapuas Tunggal Persada - Indonesia
- Borneo Indobara - Indonesia
- Sakthi Sugars Limited - India
- Chettinad Cement Corporation Ltd - India
- Coalindo Energy - Indonesia
- Medco Energi Mining Internasional
- Standard Chartered Bank - UAE
- Cement Manufacturers Association - India
- Binh Thuan Hamico - Vietnam
- Kideco Jaya Agung - Indonesia
- PowerSource Philippines DevCo
- Billiton Holdings Pty Ltd - Australia
- Meralco Power Generation, Philippines
- Meenaskhi Energy Private Limited - India
- Toyota Tsusho Corporation, Japan
- Commonwealth Bank - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Jindal Steel & Power Ltd - India
- Bhoruka Overseas - Indonesia
- Sindya Power Generating Company Private Ltd
- OPG Power Generation Pvt Ltd - India
- Baramulti Group, Indonesia
- Trasteel International SA, Italy
- Aboitiz Power Corporation - Philippines
- Indika Energy - Indonesia
- Madhucon Powers Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Australian Commodity Traders Exchange
- Anglo American - United Kingdom
- Maheswari Brothers Coal Limited - India
- Kepco SPC Power Corporation, Philippines
- GMR Energy Limited - India
- Renaissance Capital - South Africa
- Manunggal Multi Energi - Indonesia
- Wilmar Investment Holdings
- Vijayanagar Sugar Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Semirara Mining Corp, Philippines
- Bharathi Cement Corporation - India
- ASAPP Information Group - India
- Economic Council, Georgia
- Therma Luzon, Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bulk Trading Sa - Switzerland
- Metalloyd Limited - United Kingdom
- Banpu Public Company Limited - Thailand
- Semirara Mining and Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Central Java Power - Indonesia
- PTC India Limited - India
- Makarim & Taira - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Riau Bara Harum - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Parliament of New Zealand
- Karaikal Port Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Gujarat Sidhee Cement - India
- Uttam Galva Steels Limited - India
- Aditya Birla Group - India
- Vedanta Resources Plc - India
- Siam City Cement - Thailand
- Orica Mining Services - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Sojitz Corporation - Japan
- Alfred C Toepfer International GmbH - Germany
- Star Paper Mills Limited - India
- ICICI Bank Limited - India
- Indian Oil Corporation Limited
- Bukit Makmur.PT - Indonesia
- Merrill Lynch Commodities Europe
- The University of Queensland
- Directorate General of MIneral and Coal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Indonesian Coal Mining Association
- Mintek Dendrill Indonesia
- Coal and Oil Company - UAE
- Iligan Light & Power Inc, Philippines
- Formosa Plastics Group - Taiwan
- PNOC Exploration Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Kobexindo Tractors - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Georgia Ports Authority, United States
- Petron Corporation, Philippines
- Thai Mozambique Logistica
- SMC Global Power, Philippines
- Indo Tambangraya Megah - Indonesia
- GVK Power & Infra Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Dalmia Cement Bharat India
- Thiess Contractors Indonesia
- Mercuria Energy - Indonesia
- Electricity Authority, New Zealand
- Vizag Seaport Private Limited - India
- Gujarat Electricity Regulatory Commission - India
- European Bulk Services B.V. - Netherlands
- Barasentosa Lestari - Indonesia
- Ministry of Finance - Indonesia
- Intertek Mineral Services - Indonesia
- Heidelberg Cement - Germany
- Petrochimia International Co. Ltd.- Taiwan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Xindia Steels Limited - India
- Power Finance Corporation Ltd., India
- Global Green Power PLC Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- GAC Shipping (India) Pvt Ltd
- Minerals Council of Australia
- South Luzon Thermal Energy Corporation
- Latin American Coal - Colombia
- Ceylon Electricity Board - Sri Lanka
- McConnell Dowell - Australia
- New Zealand Coal & Carbon
- Sinarmas Energy and Mining - Indonesia
- Deloitte Consulting - India
- Mjunction Services Limited - India
- Electricity Generating Authority of Thailand
- Carbofer General Trading SA - India
- TNB Fuel Sdn Bhd - Malaysia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Straits Asia Resources Limited - Singapore
- The Treasury - Australian Government
- Kumho Petrochemical, South Korea
- Timah Investasi Mineral - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- Energy Development Corp, Philippines
- Ministry of Mines - Canada
- Tata Chemicals Ltd - India
- The State Trading Corporation of India Ltd
- Goldman Sachs - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Ind-Barath Power Infra Limited - India
- Sree Jayajothi Cements Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Eastern Coal Council - USA
- Planning Commission, India
- Mercator Lines Limited - India
- Globalindo Alam Lestari - Indonesia
- Simpson Spence & Young - Indonesia
- VISA Power Limited - India
- Videocon Industries ltd - India
- White Energy Company Limited
- Grasim Industreis Ltd - India
- San Jose City I Power Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Ambuja Cements Ltd - India
- Altura Mining Limited, Indonesia
- Ministry of Transport, Egypt
- International Coal Ventures Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Indogreen Group - Indonesia
- Coastal Gujarat Power Limited - India
- Bhushan Steel Limited - India
- Jaiprakash Power Ventures ltd
- Orica Australia Pty. Ltd.
- India Bulls Power Limited - India
- Antam Resourcindo - Indonesia
- LBH Netherlands Bv - Netherlands
- IHS Mccloskey Coal Group - USA
- Port Waratah Coal Services - Australia
- Central Electricity Authority - India
- Bangladesh Power Developement Board
- Sarangani Energy Corporation, Philippines
- Siam City Cement PLC, Thailand
- MS Steel International - UAE
- Rio Tinto Coal - Australia
- Bayan Resources Tbk. - Indonesia
- Singapore Mercantile Exchange
- Malabar Cements Ltd - India
- Tamil Nadu electricity Board
- Parry Sugars Refinery, India
- Salva Resources Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- IEA Clean Coal Centre - UK
- GN Power Mariveles Coal Plant, Philippines
- Edison Trading Spa - Italy
- SMG Consultants - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Energy Link Ltd, New Zealand
- Savvy Resources Ltd - HongKong
- Marubeni Corporation - India
- Gujarat Mineral Development Corp Ltd - India
- Romanian Commodities Exchange
- Global Business Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Agrawal Coal Company - India
- Wood Mackenzie - Singapore
- Independent Power Producers Association of India
- Pendopo Energi Batubara - Indonesia
- Indian Energy Exchange, India
- Sical Logistics Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Price Waterhouse Coopers - Russia
- Bahari Cakrawala Sebuku - Indonesia
- CIMB Investment Bank - Malaysia
- Larsen & Toubro Limited - India
- Bhatia International Limited - India
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