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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 February 19
THE BDI HAS EASED BACK TO 645 BP, ITS LOWEST LEVEL SINCE AUGUST 2016 - ALLIED
The dry bulk sector is in the doldrums, with most market participants seemingly left utterly perplexed, and simultaneously, in pursuit of any posit ...
Monday, 04 February 19
COAL STILL IN HIGH DEMAND GLOBALLY
Although the world is switching to renewable energy there is still a big demand for coal around the globe.
This is according to Cany ...
Friday, 01 February 19
ULTRAMAX WAS FIXED DELIVERY KALIMANTAN, FOR TRIP TO WEST COAST INDIA AT $7,000 - BALTIC BRIEFING
Capesize
The Vale dam tragedy sparked a sharp fall in rates across all regions even where tonnage remained tight. The potential loss of product ...
Friday, 01 February 19
SEMBCORP SELECTS NORDEN FOR LONG-TERM INDIAN CONTRACT
NORDEN A/S has signed a 10-year Panamax Contract of Affreightment (COA) with Indian utility firm Sembcorp Energy India Ltd.
From 1 A ...
Tuesday, 29 January 19
HARD COAL BEARS THE BRUNT OF THE RECOMMENDATIONS OF THE COMMISSION GROWTH STRUCTURAL CHANGE AND EMPLOYMENT - VDKI
Press Release: Hard coal bears the brunt of the recommendations of the Commission Growth Structural change and employment.
In its fi ...
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- IEA Clean Coal Centre - UK
- Kideco Jaya Agung - Indonesia
- Ministry of Transport, Egypt
- Global Green Power PLC Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- European Bulk Services B.V. - Netherlands
- Cigading International Bulk Terminal - Indonesia
- Goldman Sachs - Singapore
- Asmin Koalindo Tuhup - Indonesia
- CNBM International Corporation - China
- Tata Chemicals Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Manunggal Multi Energi - Indonesia
- Indian Energy Exchange, India
- Edison Trading Spa - Italy
- Vizag Seaport Private Limited - India
- Siam City Cement - Thailand
- Coal and Oil Company - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Mercator Lines Limited - India
- Romanian Commodities Exchange
- Indika Energy - Indonesia
- Coalindo Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- SN Aboitiz Power Inc, Philippines
- Therma Luzon, Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- MS Steel International - UAE
- Mjunction Services Limited - India
- Global Coal Blending Company Limited - Australia
- Formosa Plastics Group - Taiwan
- Riau Bara Harum - Indonesia
- Bulk Trading Sa - Switzerland
- Commonwealth Bank - Australia
- Makarim & Taira - Indonesia
- Mintek Dendrill Indonesia
- SMG Consultants - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Heidelberg Cement - Germany
- Gujarat Mineral Development Corp Ltd - India
- Thiess Contractors Indonesia
- Kobexindo Tractors - Indoneisa
- Altura Mining Limited, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- Iligan Light & Power Inc, Philippines
- Intertek Mineral Services - Indonesia
- White Energy Company Limited
- Wilmar Investment Holdings
- London Commodity Brokers - England
- Thai Mozambique Logistica
- Ambuja Cements Ltd - India
- Aditya Birla Group - India
- Latin American Coal - Colombia
- Economic Council, Georgia
- Electricity Generating Authority of Thailand
- New Zealand Coal & Carbon
- Indian Oil Corporation Limited
- Kepco SPC Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Indogreen Group - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Ind-Barath Power Infra Limited - India
- CIMB Investment Bank - Malaysia
- Leighton Contractors Pty Ltd - Australia
- Kalimantan Lumbung Energi - Indonesia
- Posco Energy - South Korea
- Directorate General of MIneral and Coal - Indonesia
- Australian Coal Association
- Standard Chartered Bank - UAE
- Port Waratah Coal Services - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Power Finance Corporation Ltd., India
- Maheswari Brothers Coal Limited - India
- Bharathi Cement Corporation - India
- Globalindo Alam Lestari - Indonesia
- Dalmia Cement Bharat India
- TNB Fuel Sdn Bhd - Malaysia
- Trasteel International SA, Italy
- Bangladesh Power Developement Board
- The State Trading Corporation of India Ltd
- Rashtriya Ispat Nigam Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Vedanta Resources Plc - India
- Star Paper Mills Limited - India
- Videocon Industries ltd - India
- Orica Mining Services - Indonesia
- Eastern Coal Council - USA
- Orica Australia Pty. Ltd.
- Ministry of Mines - Canada
- Energy Link Ltd, New Zealand
- Essar Steel Hazira Ltd - India
- Sindya Power Generating Company Private Ltd
- LBH Netherlands Bv - Netherlands
- Deloitte Consulting - India
- Tamil Nadu electricity Board
- Billiton Holdings Pty Ltd - Australia
- Baramulti Group, Indonesia
- Parliament of New Zealand
- GMR Energy Limited - India
- Electricity Authority, New Zealand
- Ministry of Finance - Indonesia
- PowerSource Philippines DevCo
- Bhoruka Overseas - Indonesia
- Uttam Galva Steels Limited - India
- Coastal Gujarat Power Limited - India
- Africa Commodities Group - South Africa
- Bahari Cakrawala Sebuku - Indonesia
- Independent Power Producers Association of India
- Krishnapatnam Port Company Ltd. - India
- Cement Manufacturers Association - India
- Bukit Makmur.PT - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Offshore Bulk Terminal Pte Ltd, Singapore
- Medco Energi Mining Internasional
- Alfred C Toepfer International GmbH - Germany
- Lanco Infratech Ltd - India
- Kartika Selabumi Mining - Indonesia
- The Treasury - Australian Government
- AsiaOL BioFuels Corp., Philippines
- Chettinad Cement Corporation Ltd - India
- Merrill Lynch Commodities Europe
- Carbofer General Trading SA - India
- GVK Power & Infra Limited - India
- Larsen & Toubro Limited - India
- Minerals Council of Australia
- Chamber of Mines of South Africa
- Interocean Group of Companies - India
- OPG Power Generation Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Grasim Industreis Ltd - India
- Banpu Public Company Limited - Thailand
- Indo Tambangraya Megah - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Australian Commodity Traders Exchange
- International Coal Ventures Pvt Ltd - India
- India Bulls Power Limited - India
- Renaissance Capital - South Africa
- Pendopo Energi Batubara - Indonesia
- Savvy Resources Ltd - HongKong
- Bayan Resources Tbk. - Indonesia
- Simpson Spence & Young - Indonesia
- Planning Commission, India
- PTC India Limited - India
- Bukit Baiduri Energy - Indonesia
- Rio Tinto Coal - Australia
- Directorate Of Revenue Intelligence - India
- Siam City Cement PLC, Thailand
- Samtan Co., Ltd - South Korea
- SMC Global Power, Philippines
- Barasentosa Lestari - Indonesia
- Sree Jayajothi Cements Limited - India
- Central Java Power - Indonesia
- Karaikal Port Pvt Ltd - India
- Sakthi Sugars Limited - India
- Aboitiz Power Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- Sojitz Corporation - Japan
- Anglo American - United Kingdom
- Timah Investasi Mineral - Indoneisa
- Sical Logistics Limited - India
- Metalloyd Limited - United Kingdom
- San Jose City I Power Corp, Philippines
- Mercuria Energy - Indonesia
- ASAPP Information Group - India
- Salva Resources Pvt Ltd - India
- Malabar Cements Ltd - India
- Miang Besar Coal Terminal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The University of Queensland
- Petron Corporation, Philippines
- Borneo Indobara - Indonesia
- Central Electricity Authority - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Wood Mackenzie - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Madhucon Powers Ltd - India
- VISA Power Limited - India
- Xindia Steels Limited - India
- Eastern Energy - Thailand
- Jindal Steel & Power Ltd - India
- Marubeni Corporation - India
- Georgia Ports Authority, United States
- Jaiprakash Power Ventures ltd
- Bhushan Steel Limited - India
- ICICI Bank Limited - India
- Parry Sugars Refinery, India
- Bhatia International Limited - India
- Energy Development Corp, Philippines
- Global Business Power Corporation, Philippines
- Indonesian Coal Mining Association
- PNOC Exploration Corporation - Philippines
- TeaM Sual Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- IHS Mccloskey Coal Group - USA
- McConnell Dowell - Australia
- Price Waterhouse Coopers - Russia
- Oldendorff Carriers - Singapore
- Attock Cement Pakistan Limited
- Meralco Power Generation, Philippines
- South Luzon Thermal Energy Corporation
- Agrawal Coal Company - India
- Vijayanagar Sugar Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Gujarat Sidhee Cement - India
- Kaltim Prima Coal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Singapore Mercantile Exchange
- GN Power Mariveles Coal Plant, Philippines
- Straits Asia Resources Limited - Singapore
- Sarangani Energy Corporation, Philippines
- Toyota Tsusho Corporation, Japan
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