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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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Wednesday, 06 March 19
SHIPPING MARKET INSIGHT - INERMODAL
In a downward moving market, softer SnP activity is usually a given, as the gap between Sellers’ and Buyers’ ideas widens, especially w ...
Saturday, 02 March 19
A 60,500-TONNER WAS BOOKED DELIVERY SINGAPORE, VIA INDONESIA, REDELIVERY WEST COAST INDIA, AT $11,250 - BALTIC BRIEFING
Capesize
Vale’s ongoing absence from the Brazil spot market continued to have a negative impact on sentiment, with rates falling in all a ...
Thursday, 28 February 19
COAL'S PERFECT STORM HITS $70 BILLION AUSTRALIAN PROJECTS - BLOOMBERG
It’s been a tough few weeks for our coal industry.
First there was a court ruling blocking a new mine on climate change ground ...
Wednesday, 27 February 19
SHIPPING MARKET INSIGHT - INTERMODAL
With the IMO 2020 approaching, it becomes challenging for the market to accurately explore the run-up to the deadline given that marine fuel-oil of ...
Tuesday, 26 February 19
CHINA RESTRICTS SEABORNE COAL IMPORTS - WOOD MACKENZIE
In response to news on China's Dalian port restricting seaborne coal imports, Wood Mackenzie's experts provide the following commentary.
...
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- Australian Coal Association
- Goldman Sachs - Singapore
- Indian Energy Exchange, India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Parliament of New Zealand
- Bharathi Cement Corporation - India
- Leighton Contractors Pty Ltd - Australia
- Asmin Koalindo Tuhup - Indonesia
- Vizag Seaport Private Limited - India
- Formosa Plastics Group - Taiwan
- White Energy Company Limited
- Globalindo Alam Lestari - Indonesia
- Coal and Oil Company - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Renaissance Capital - South Africa
- Anglo American - United Kingdom
- Vijayanagar Sugar Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mintek Dendrill Indonesia
- Malabar Cements Ltd - India
- Mercator Lines Limited - India
- Agrawal Coal Company - India
- GAC Shipping (India) Pvt Ltd
- Riau Bara Harum - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Edison Trading Spa - Italy
- PTC India Limited - India
- LBH Netherlands Bv - Netherlands
- Bank of Tokyo Mitsubishi UFJ Ltd
- Jindal Steel & Power Ltd - India
- Bayan Resources Tbk. - Indonesia
- The Treasury - Australian Government
- Madhucon Powers Ltd - India
- PowerSource Philippines DevCo
- Directorate Of Revenue Intelligence - India
- Ministry of Mines - Canada
- Electricity Generating Authority of Thailand
- Price Waterhouse Coopers - Russia
- Lanco Infratech Ltd - India
- Sakthi Sugars Limited - India
- Ind-Barath Power Infra Limited - India
- AsiaOL BioFuels Corp., Philippines
- Ministry of Finance - Indonesia
- Eastern Energy - Thailand
- The State Trading Corporation of India Ltd
- Simpson Spence & Young - Indonesia
- Global Coal Blending Company Limited - Australia
- Romanian Commodities Exchange
- Indonesian Coal Mining Association
- Attock Cement Pakistan Limited
- Power Finance Corporation Ltd., India
- Bhoruka Overseas - Indonesia
- Barasentosa Lestari - Indonesia
- Posco Energy - South Korea
- Kumho Petrochemical, South Korea
- Antam Resourcindo - Indonesia
- Maheswari Brothers Coal Limited - India
- Ministry of Transport, Egypt
- Manunggal Multi Energi - Indonesia
- ICICI Bank Limited - India
- Heidelberg Cement - Germany
- Semirara Mining and Power Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Gujarat Sidhee Cement - India
- Kobexindo Tractors - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Deloitte Consulting - India
- Commonwealth Bank - Australia
- Dalmia Cement Bharat India
- Interocean Group of Companies - India
- Siam City Cement PLC, Thailand
- TeaM Sual Corporation - Philippines
- India Bulls Power Limited - India
- Ambuja Cements Ltd - India
- Marubeni Corporation - India
- Tamil Nadu electricity Board
- European Bulk Services B.V. - Netherlands
- Cement Manufacturers Association - India
- Rio Tinto Coal - Australia
- Bukit Makmur.PT - Indonesia
- Intertek Mineral Services - Indonesia
- Georgia Ports Authority, United States
- Baramulti Group, Indonesia
- Holcim Trading Pte Ltd - Singapore
- Energy Development Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Kartika Selabumi Mining - Indonesia
- Timah Investasi Mineral - Indoneisa
- Tata Chemicals Ltd - India
- Kideco Jaya Agung - Indonesia
- Africa Commodities Group - South Africa
- Kalimantan Lumbung Energi - Indonesia
- Jaiprakash Power Ventures ltd
- Karaikal Port Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Altura Mining Limited, Indonesia
- Rashtriya Ispat Nigam Limited - India
- Sinarmas Energy and Mining - Indonesia
- OPG Power Generation Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Bukit Baiduri Energy - Indonesia
- Chamber of Mines of South Africa
- Chettinad Cement Corporation Ltd - India
- Bhatia International Limited - India
- CIMB Investment Bank - Malaysia
- Sarangani Energy Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- SMG Consultants - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Binh Thuan Hamico - Vietnam
- Latin American Coal - Colombia
- Ceylon Electricity Board - Sri Lanka
- Pendopo Energi Batubara - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- IHS Mccloskey Coal Group - USA
- New Zealand Coal & Carbon
- Karbindo Abesyapradhi - Indoneisa
- Wood Mackenzie - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Larsen & Toubro Limited - India
- Vedanta Resources Plc - India
- Indika Energy - Indonesia
- Star Paper Mills Limited - India
- South Luzon Thermal Energy Corporation
- Metalloyd Limited - United Kingdom
- McConnell Dowell - Australia
- Thai Mozambique Logistica
- Samtan Co., Ltd - South Korea
- Sree Jayajothi Cements Limited - India
- Cigading International Bulk Terminal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Trasteel International SA, Italy
- Gujarat Electricity Regulatory Commission - India
- MS Steel International - UAE
- Port Waratah Coal Services - Australia
- PNOC Exploration Corporation - Philippines
- Makarim & Taira - Indonesia
- Coalindo Energy - Indonesia
- Central Java Power - Indonesia
- Standard Chartered Bank - UAE
- Economic Council, Georgia
- Indian Oil Corporation Limited
- Toyota Tsusho Corporation, Japan
- IEA Clean Coal Centre - UK
- Mercuria Energy - Indonesia
- Borneo Indobara - Indonesia
- Kaltim Prima Coal - Indonesia
- Coastal Gujarat Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- Aditya Birla Group - India
- SMC Global Power, Philippines
- Miang Besar Coal Terminal - Indonesia
- Bulk Trading Sa - Switzerland
- Siam City Cement - Thailand
- Videocon Industries ltd - India
- Orica Mining Services - Indonesia
- Electricity Authority, New Zealand
- Merrill Lynch Commodities Europe
- Global Business Power Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Aboitiz Power Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Oldendorff Carriers - Singapore
- GMR Energy Limited - India
- Petron Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Kepco SPC Power Corporation, Philippines
- Grasim Industreis Ltd - India
- Indo Tambangraya Megah - Indonesia
- Xindia Steels Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SN Aboitiz Power Inc, Philippines
- CNBM International Corporation - China
- GN Power Mariveles Coal Plant, Philippines
- San Jose City I Power Corp, Philippines
- Mjunction Services Limited - India
- Sojitz Corporation - Japan
- London Commodity Brokers - England
- Meralco Power Generation, Philippines
- Singapore Mercantile Exchange
- Energy Link Ltd, New Zealand
- VISA Power Limited - India
- Savvy Resources Ltd - HongKong
- Parry Sugars Refinery, India
- Wilmar Investment Holdings
- Sical Logistics Limited - India
- Kapuas Tunggal Persada - Indonesia
- Semirara Mining Corp, Philippines
- Central Electricity Authority - India
- Directorate General of MIneral and Coal - Indonesia
- Indogreen Group - Indonesia
- Bhushan Steel Limited - India
- GVK Power & Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- ASAPP Information Group - India
- Essar Steel Hazira Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Bangladesh Power Developement Board
- TNB Fuel Sdn Bhd - Malaysia
- Eastern Coal Council - USA
- Planning Commission, India
- Australian Commodity Traders Exchange
- Straits Asia Resources Limited - Singapore
- The University of Queensland
- Neyveli Lignite Corporation Ltd, - India
- Independent Power Producers Association of India
- Global Green Power PLC Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Orica Australia Pty. Ltd.
- Minerals Council of Australia
- Medco Energi Mining Internasional
- Thiess Contractors Indonesia
- Carbofer General Trading SA - India
- Uttam Galva Steels Limited - India
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