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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, 13 February 19
SHIPPING MARKET INSIGHT - INTERMODAL
If there is one word that can describe the current shipping environment then that this word is most probably “volatility.” The sentimen ...
Saturday, 09 February 19
SUPRAMAX: A 63,000-TONNER WAS REPORTED FIXED DELIVERY FOR AN EAST KALIMANTAN TRIP, REDELIVERY WEST COAST INDIA, AT $9,250 - THE BALTIC BRIEFING
Cape
The Vale disaster weighed heavily on the market for big ships, with uncertainty about shipments/future exports leading to a sharp drop in ...
Friday, 08 February 19
LOWER-QUALITY INDONESIA EXPORTS ROSE 39 MT IN 2018 YOY PRIMARILY IN RESPONSE TO INCREASED DEMAND FROM CHINA AND INDIA - PEABODY
"Underlying seaborne met and thermal coal conditions remain quite positive and the pace of U.S. coal-fueled power plant retirements is expecte ...
Thursday, 07 February 19
QATAR CAN GAIN FROM DECLINING COAL - THE PENINSULA
With North America and Europe closing down their old coal and nuclear plants, major gas exporters like Qatar can and should gain market share. With ...
Wednesday, 06 February 19
FEBRUARY 2019 INDONESIA'S COAL REFERENCE PRICE FELL 8.83 PERCENT YOY
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down again the benchmark price of Indonesian th ...
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- Wilmar Investment Holdings
- Meralco Power Generation, Philippines
- IEA Clean Coal Centre - UK
- Kepco SPC Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Simpson Spence & Young - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Parry Sugars Refinery, India
- Interocean Group of Companies - India
- PTC India Limited - India
- Borneo Indobara - Indonesia
- OPG Power Generation Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Kideco Jaya Agung - Indonesia
- Straits Asia Resources Limited - Singapore
- International Coal Ventures Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kartika Selabumi Mining - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Larsen & Toubro Limited - India
- Ceylon Electricity Board - Sri Lanka
- Mercuria Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- European Bulk Services B.V. - Netherlands
- Energy Development Corp, Philippines
- ICICI Bank Limited - India
- Trasteel International SA, Italy
- Samtan Co., Ltd - South Korea
- Energy Link Ltd, New Zealand
- Planning Commission, India
- Indonesian Coal Mining Association
- Jindal Steel & Power Ltd - India
- Latin American Coal - Colombia
- Global Green Power PLC Corporation, Philippines
- Electricity Generating Authority of Thailand
- Holcim Trading Pte Ltd - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Siam City Cement PLC, Thailand
- Star Paper Mills Limited - India
- Intertek Mineral Services - Indonesia
- Mjunction Services Limited - India
- Renaissance Capital - South Africa
- Banpu Public Company Limited - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Oldendorff Carriers - Singapore
- Pendopo Energi Batubara - Indonesia
- GMR Energy Limited - India
- South Luzon Thermal Energy Corporation
- Jorong Barutama Greston.PT - Indonesia
- Eastern Energy - Thailand
- Dalmia Cement Bharat India
- Makarim & Taira - Indonesia
- Savvy Resources Ltd - HongKong
- Metalloyd Limited - United Kingdom
- Tamil Nadu electricity Board
- Malabar Cements Ltd - India
- ASAPP Information Group - India
- Indian Energy Exchange, India
- Power Finance Corporation Ltd., India
- Economic Council, Georgia
- Xindia Steels Limited - India
- AsiaOL BioFuels Corp., Philippines
- Ministry of Transport, Egypt
- Deloitte Consulting - India
- Ambuja Cements Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Edison Trading Spa - Italy
- San Jose City I Power Corp, Philippines
- Iligan Light & Power Inc, Philippines
- SMG Consultants - Indonesia
- Sojitz Corporation - Japan
- Karaikal Port Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Grasim Industreis Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Petron Corporation, Philippines
- Medco Energi Mining Internasional
- Uttam Galva Steels Limited - India
- Port Waratah Coal Services - Australia
- Commonwealth Bank - Australia
- MS Steel International - UAE
- Vedanta Resources Plc - India
- Parliament of New Zealand
- Central Electricity Authority - India
- Alfred C Toepfer International GmbH - Germany
- TNB Fuel Sdn Bhd - Malaysia
- Timah Investasi Mineral - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- VISA Power Limited - India
- Tata Chemicals Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Agrawal Coal Company - India
- GAC Shipping (India) Pvt Ltd
- IHS Mccloskey Coal Group - USA
- Directorate General of MIneral and Coal - Indonesia
- Indogreen Group - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Altura Mining Limited, Indonesia
- McConnell Dowell - Australia
- Aditya Birla Group - India
- Thai Mozambique Logistica
- Kapuas Tunggal Persada - Indonesia
- Sarangani Energy Corporation, Philippines
- White Energy Company Limited
- Semirara Mining and Power Corporation, Philippines
- Singapore Mercantile Exchange
- London Commodity Brokers - England
- Directorate Of Revenue Intelligence - India
- Coal and Oil Company - UAE
- Krishnapatnam Port Company Ltd. - India
- Aboitiz Power Corporation - Philippines
- Carbofer General Trading SA - India
- Gujarat Electricity Regulatory Commission - India
- Toyota Tsusho Corporation, Japan
- Coalindo Energy - Indonesia
- Riau Bara Harum - Indonesia
- Kumho Petrochemical, South Korea
- Attock Cement Pakistan Limited
- TeaM Sual Corporation - Philippines
- Africa Commodities Group - South Africa
- Chamber of Mines of South Africa
- Neyveli Lignite Corporation Ltd, - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bayan Resources Tbk. - Indonesia
- Therma Luzon, Inc, Philippines
- Baramulti Group, Indonesia
- Sakthi Sugars Limited - India
- Independent Power Producers Association of India
- Antam Resourcindo - Indonesia
- Ind-Barath Power Infra Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Price Waterhouse Coopers - Russia
- Binh Thuan Hamico - Vietnam
- Posco Energy - South Korea
- Mintek Dendrill Indonesia
- Global Coal Blending Company Limited - Australia
- Standard Chartered Bank - UAE
- Georgia Ports Authority, United States
- Sical Logistics Limited - India
- SMC Global Power, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bulk Trading Sa - Switzerland
- Marubeni Corporation - India
- Bhatia International Limited - India
- Essar Steel Hazira Ltd - India
- Madhucon Powers Ltd - India
- Orica Mining Services - Indonesia
- PNOC Exploration Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Jaiprakash Power Ventures ltd
- Sree Jayajothi Cements Limited - India
- Minerals Council of Australia
- Billiton Holdings Pty Ltd - Australia
- Sindya Power Generating Company Private Ltd
- Videocon Industries ltd - India
- Global Business Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- LBH Netherlands Bv - Netherlands
- Central Java Power - Indonesia
- Goldman Sachs - Singapore
- Orica Australia Pty. Ltd.
- PowerSource Philippines DevCo
- Coastal Gujarat Power Limited - India
- Bharathi Cement Corporation - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The Treasury - Australian Government
- Indika Energy - Indonesia
- Vizag Seaport Private Limited - India
- Indo Tambangraya Megah - Indonesia
- Formosa Plastics Group - Taiwan
- GVK Power & Infra Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Australian Commodity Traders Exchange
- Salva Resources Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Indian Oil Corporation Limited
- Thiess Contractors Indonesia
- India Bulls Power Limited - India
- Mercator Lines Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Australian Coal Association
- Bhushan Steel Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Wood Mackenzie - Singapore
- Heidelberg Cement - Germany
- Anglo American - United Kingdom
- The University of Queensland
- Kohat Cement Company Ltd. - Pakistan
- CNBM International Corporation - China
- Electricity Authority, New Zealand
- The State Trading Corporation of India Ltd
- Bukit Makmur.PT - Indonesia
- Bukit Baiduri Energy - Indonesia
- Cement Manufacturers Association - India
- Manunggal Multi Energi - Indonesia
- Eastern Coal Council - USA
- Lanco Infratech Ltd - India
- Kaltim Prima Coal - Indonesia
- Semirara Mining Corp, Philippines
- Romanian Commodities Exchange
- Ministry of Mines - Canada
- Bhoruka Overseas - Indonesia
- Maheswari Brothers Coal Limited - India
- Chettinad Cement Corporation Ltd - India
- Ministry of Finance - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- CIMB Investment Bank - Malaysia
- Globalindo Alam Lestari - Indonesia
- Bangladesh Power Developement Board
- Rio Tinto Coal - Australia
- New Zealand Coal & Carbon
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