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