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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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Tuesday, 26 February 19
THE RELATIVELY DISAPPOINTING SCENE PORTRAYED IN THE DRY BULK MARKET RIGHT NOW - ALLIED SHIPBROKING
The relatively disappointing scene portrayed in the dry bulk market right now (especially in the Capesize segment) is undoubtedly one of the prevai ...
Friday, 22 February 19
AUSTRALIAN HIGH CV THERMAL COAL PRICES AT 19-MONTH LOW, BUT NOT FOR LONG - WOOD MACKENZIE
The benchmark Newcastle high energy thermal coal price has fallen from US$100/tonne at the turn of the new year to US$88/tonne. Thermal coal has be ...
Wednesday, 20 February 19
EFFECTIVE NOTICES OF ARBITRATION - AVOIDING WASTED COSTS AND A POTENTIALLY TIME-BARRED CLAIM
KNOWLEDGE TO ELEVATE
In a recent case, The Amity [2017], charterers successfully set aside an arbitration award on the basis that ow ...
Wednesday, 20 February 19
SHIPPING MARKET INSIGHT - INERMODAL
Market experts mostly agree that the recent dry bulk market downtrend was caused by seasonal slowdown amid the Chinese New Year celebrations in com ...
Tuesday, 19 February 19
AUSTRALIA'S COAL FUTURE UNDER THREAT AS MORE CHANGES HIT FOSSIL FUELS GLOBALLY - ABC
Two disparate decisions from opposite corners of the world have sounded warnings for the future of Australia’s coal industry.
...
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- Ministry of Mines - Canada
- Oldendorff Carriers - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Simpson Spence & Young - Indonesia
- Bukit Makmur.PT - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- San Jose City I Power Corp, Philippines
- Aditya Birla Group - India
- European Bulk Services B.V. - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- Orica Australia Pty. Ltd.
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Indo Tambangraya Megah - Indonesia
- Toyota Tsusho Corporation, Japan
- Mjunction Services Limited - India
- The Treasury - Australian Government
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Energy Development Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Electricity Authority, New Zealand
- Eastern Coal Council - USA
- Karaikal Port Pvt Ltd - India
- Australian Coal Association
- Africa Commodities Group - South Africa
- India Bulls Power Limited - India
- The State Trading Corporation of India Ltd
- Krishnapatnam Port Company Ltd. - India
- Bayan Resources Tbk. - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- LBH Netherlands Bv - Netherlands
- Edison Trading Spa - Italy
- Bank of Tokyo Mitsubishi UFJ Ltd
- Renaissance Capital - South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Star Paper Mills Limited - India
- Tamil Nadu electricity Board
- Siam City Cement PLC, Thailand
- Energy Link Ltd, New Zealand
- Altura Mining Limited, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Intertek Mineral Services - Indonesia
- Global Business Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Gujarat Mineral Development Corp Ltd - India
- Chettinad Cement Corporation Ltd - India
- Interocean Group of Companies - India
- Vijayanagar Sugar Pvt Ltd - India
- Coalindo Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Sidhee Cement - India
- Xindia Steels Limited - India
- Holcim Trading Pte Ltd - Singapore
- Iligan Light & Power Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Grasim Industreis Ltd - India
- GAC Shipping (India) Pvt Ltd
- Semirara Mining Corp, Philippines
- Meenaskhi Energy Private Limited - India
- SMC Global Power, Philippines
- ASAPP Information Group - India
- Metalloyd Limited - United Kingdom
- Indian Energy Exchange, India
- Bhushan Steel Limited - India
- Uttam Galva Steels Limited - India
- Eastern Energy - Thailand
- Anglo American - United Kingdom
- CIMB Investment Bank - Malaysia
- AsiaOL BioFuels Corp., Philippines
- Formosa Plastics Group - Taiwan
- SN Aboitiz Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Mintek Dendrill Indonesia
- IHS Mccloskey Coal Group - USA
- Miang Besar Coal Terminal - Indonesia
- Parry Sugars Refinery, India
- Independent Power Producers Association of India
- Karbindo Abesyapradhi - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Sree Jayajothi Cements Limited - India
- Pendopo Energi Batubara - Indonesia
- Medco Energi Mining Internasional
- Kartika Selabumi Mining - Indonesia
- PNOC Exploration Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- Kapuas Tunggal Persada - Indonesia
- Bangladesh Power Developement Board
- Petron Corporation, Philippines
- Minerals Council of Australia
- Thai Mozambique Logistica
- Banpu Public Company Limited - Thailand
- Agrawal Coal Company - India
- Mercator Lines Limited - India
- Gujarat Electricity Regulatory Commission - India
- Neyveli Lignite Corporation Ltd, - India
- Siam City Cement - Thailand
- Videocon Industries ltd - India
- Lanco Infratech Ltd - India
- Electricity Generating Authority of Thailand
- Planning Commission, India
- Ministry of Finance - Indonesia
- Bulk Trading Sa - Switzerland
- Vedanta Resources Plc - India
- Latin American Coal - Colombia
- Vizag Seaport Private Limited - India
- Baramulti Group, Indonesia
- London Commodity Brokers - England
- South Luzon Thermal Energy Corporation
- Commonwealth Bank - Australia
- Central Java Power - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Deloitte Consulting - India
- Posco Energy - South Korea
- International Coal Ventures Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Maharashtra Electricity Regulatory Commission - India
- Central Electricity Authority - India
- Attock Cement Pakistan Limited
- SMG Consultants - Indonesia
- IEA Clean Coal Centre - UK
- Pipit Mutiara Jaya. PT, Indonesia
- Leighton Contractors Pty Ltd - Australia
- MS Steel International - UAE
- Indonesian Coal Mining Association
- Indika Energy - Indonesia
- Heidelberg Cement - Germany
- Port Waratah Coal Services - Australia
- Asmin Koalindo Tuhup - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Kaltim Prima Coal - Indonesia
- Bhatia International Limited - India
- Savvy Resources Ltd - HongKong
- Indian Oil Corporation Limited
- Standard Chartered Bank - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- New Zealand Coal & Carbon
- Petrochimia International Co. Ltd.- Taiwan
- Merrill Lynch Commodities Europe
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Malabar Cements Ltd - India
- Sojitz Corporation - Japan
- Romanian Commodities Exchange
- Singapore Mercantile Exchange
- PTC India Limited - India
- CNBM International Corporation - China
- Ministry of Transport, Egypt
- Salva Resources Pvt Ltd - India
- Georgia Ports Authority, United States
- Kohat Cement Company Ltd. - Pakistan
- Goldman Sachs - Singapore
- Rio Tinto Coal - Australia
- Larsen & Toubro Limited - India
- Ambuja Cements Ltd - India
- Essar Steel Hazira Ltd - India
- Thiess Contractors Indonesia
- PowerSource Philippines DevCo
- Manunggal Multi Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Trasteel International SA, Italy
- GVK Power & Infra Limited - India
- Maheswari Brothers Coal Limited - India
- Therma Luzon, Inc, Philippines
- Bharathi Cement Corporation - India
- Sarangani Energy Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Parliament of New Zealand
- VISA Power Limited - India
- Antam Resourcindo - Indonesia
- White Energy Company Limited
- Wilmar Investment Holdings
- Rashtriya Ispat Nigam Limited - India
- Economic Council, Georgia
- Makarim & Taira - Indonesia
- Coal and Oil Company - UAE
- Global Green Power PLC Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Jindal Steel & Power Ltd - India
- Ind-Barath Power Infra Limited - India
- Borneo Indobara - Indonesia
- Bhoruka Overseas - Indonesia
- OPG Power Generation Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Dalmia Cement Bharat India
- McConnell Dowell - Australia
- Wood Mackenzie - Singapore
- Straits Asia Resources Limited - Singapore
- GMR Energy Limited - India
- Sakthi Sugars Limited - India
- Sical Logistics Limited - India
- Indogreen Group - Indonesia
- Barasentosa Lestari - Indonesia
- Power Finance Corporation Ltd., India
- Price Waterhouse Coopers - Russia
- TNB Fuel Sdn Bhd - Malaysia
- Tata Chemicals Ltd - India
- Sindya Power Generating Company Private Ltd
- Jaiprakash Power Ventures ltd
- Australian Commodity Traders Exchange
- Orica Mining Services - Indonesia
- Binh Thuan Hamico - Vietnam
- TeaM Sual Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Carbofer General Trading SA - India
- Samtan Co., Ltd - South Korea
- Billiton Holdings Pty Ltd - Australia
- Chamber of Mines of South Africa
- Mercuria Energy - Indonesia
- Marubeni Corporation - India
- Cigading International Bulk Terminal - Indonesia
- Madhucon Powers Ltd - India
- Meralco Power Generation, Philippines
- Cement Manufacturers Association - India
- Bukit Asam (Persero) Tbk - Indonesia
- ICICI Bank Limited - India
- Kideco Jaya Agung - Indonesia
- The University of Queensland
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