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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, 29 January 19
CHINA HAS BEEN THE TOP DRIVER OF GLOBAL GROWTH FOR NEARLY TWO DECADES - ALLIED
China has been the top driver of global growth for nearly two decades now, pushing demand for seaborne trade and being the key influencer for deman ...
Saturday, 26 January 19
SUPRAMAX: NICKEL ORE RUNS SAW A 56K DWT VESSEL, DELIVERY PHILIPPINES, FIXED FOR A TRIP TO CHINA AT $6K - BALTIC BRIEFING
Capesize
A week of dashed hopes for owners as the optimism evident the previous week evaporated. Rates slipped on all routes and underlying thr ...
Thursday, 24 January 19
ANOTHER DISAPPOINTING WEEK FOR PANAMAX OWNERS; MARKET CONTINUES DOWN IN BOTH BASINS - FEARNLEYS
Capesize
The week has been marked by low activity and dropping rates in both basins. As usual, supply additions have increased at the beginning ...
Thursday, 24 January 19
KOREA SOUTHERN POWER INVITED BIDS FOR 960K MT OF 4600 NCV COAL FOR THREE YEARS
COALspot.com: South Korea state-owned utility Korea Southern Power Co. Ltd (KOSPO) issued a tender for 320,000 MT of min 4,600 kcal/kg NCV low calo ...
Tuesday, 22 January 19
9TH GLOBAL MANUFACTURING SUPPLY CHAIN INNOVATION SUMMIT 2019
Rethinking the supply chain in manufacturing is a must at the digital era along with the industry transforming and innovating; new manufacturing is ...
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- Commonwealth Bank - Australia
- Anglo American - United Kingdom
- Sree Jayajothi Cements Limited - India
- Port Waratah Coal Services - Australia
- Bangladesh Power Developement Board
- Heidelberg Cement - Germany
- Romanian Commodities Exchange
- Timah Investasi Mineral - Indoneisa
- Salva Resources Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Metalloyd Limited - United Kingdom
- Electricity Authority, New Zealand
- Sical Logistics Limited - India
- VISA Power Limited - India
- Vizag Seaport Private Limited - India
- Kideco Jaya Agung - Indonesia
- Tamil Nadu electricity Board
- Asmin Koalindo Tuhup - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Parliament of New Zealand
- TNB Fuel Sdn Bhd - Malaysia
- Madhucon Powers Ltd - India
- Petron Corporation, Philippines
- Merrill Lynch Commodities Europe
- Kohat Cement Company Ltd. - Pakistan
- Oldendorff Carriers - Singapore
- Simpson Spence & Young - Indonesia
- Straits Asia Resources Limited - Singapore
- Wilmar Investment Holdings
- Attock Cement Pakistan Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Planning Commission, India
- Essar Steel Hazira Ltd - India
- Central Electricity Authority - India
- Africa Commodities Group - South Africa
- Samtan Co., Ltd - South Korea
- Gujarat Mineral Development Corp Ltd - India
- Wood Mackenzie - Singapore
- Mercator Lines Limited - India
- Interocean Group of Companies - India
- Xindia Steels Limited - India
- Bharathi Cement Corporation - India
- Coalindo Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Star Paper Mills Limited - India
- CNBM International Corporation - China
- Coastal Gujarat Power Limited - India
- Baramulti Group, Indonesia
- Rashtriya Ispat Nigam Limited - India
- ICICI Bank Limited - India
- Krishnapatnam Port Company Ltd. - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sindya Power Generating Company Private Ltd
- Price Waterhouse Coopers - Russia
- Petrochimia International Co. Ltd.- Taiwan
- Sakthi Sugars Limited - India
- Thiess Contractors Indonesia
- Minerals Council of Australia
- Banpu Public Company Limited - Thailand
- Indika Energy - Indonesia
- Australian Coal Association
- CIMB Investment Bank - Malaysia
- Standard Chartered Bank - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- Cement Manufacturers Association - India
- Global Business Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Directorate General of MIneral and Coal - Indonesia
- Mjunction Services Limited - India
- TeaM Sual Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Vedanta Resources Plc - India
- ASAPP Information Group - India
- Ceylon Electricity Board - Sri Lanka
- Alfred C Toepfer International GmbH - Germany
- South Luzon Thermal Energy Corporation
- McConnell Dowell - Australia
- Kepco SPC Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Trasteel International SA, Italy
- Bahari Cakrawala Sebuku - Indonesia
- Bhatia International Limited - India
- SMC Global Power, Philippines
- Ministry of Mines - Canada
- Altura Mining Limited, Indonesia
- Leighton Contractors Pty Ltd - Australia
- Latin American Coal - Colombia
- Mintek Dendrill Indonesia
- OPG Power Generation Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Savvy Resources Ltd - HongKong
- Chettinad Cement Corporation Ltd - India
- Bulk Trading Sa - Switzerland
- Globalindo Alam Lestari - Indonesia
- Indo Tambangraya Megah - Indonesia
- The University of Queensland
- Videocon Industries ltd - India
- Siam City Cement PLC, Thailand
- Sinarmas Energy and Mining - Indonesia
- Central Java Power - Indonesia
- Energy Development Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Electricity Generating Authority of Thailand
- Malabar Cements Ltd - India
- Bayan Resources Tbk. - Indonesia
- Coal and Oil Company - UAE
- Barasentosa Lestari - Indonesia
- Dalmia Cement Bharat India
- Semirara Mining and Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Billiton Holdings Pty Ltd - Australia
- New Zealand Coal & Carbon
- MS Steel International - UAE
- Cigading International Bulk Terminal - Indonesia
- Ministry of Finance - Indonesia
- The Treasury - Australian Government
- Larsen & Toubro Limited - India
- Bukit Baiduri Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Indonesian Coal Mining Association
- PNOC Exploration Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- IEA Clean Coal Centre - UK
- Jindal Steel & Power Ltd - India
- Carbofer General Trading SA - India
- Eastern Coal Council - USA
- Australian Commodity Traders Exchange
- Gujarat Sidhee Cement - India
- Global Coal Blending Company Limited - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PTC India Limited - India
- Meenaskhi Energy Private Limited - India
- Lanco Infratech Ltd - India
- Independent Power Producers Association of India
- Renaissance Capital - South Africa
- Goldman Sachs - Singapore
- Directorate Of Revenue Intelligence - India
- Therma Luzon, Inc, Philippines
- Thai Mozambique Logistica
- AsiaOL BioFuels Corp., Philippines
- Jorong Barutama Greston.PT - Indonesia
- SMG Consultants - Indonesia
- Power Finance Corporation Ltd., India
- India Bulls Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Intertek Mineral Services - Indonesia
- Agrawal Coal Company - India
- GMR Energy Limited - India
- Eastern Energy - Thailand
- Orica Australia Pty. Ltd.
- Binh Thuan Hamico - Vietnam
- Neyveli Lignite Corporation Ltd, - India
- Bhushan Steel Limited - India
- Medco Energi Mining Internasional
- GAC Shipping (India) Pvt Ltd
- Toyota Tsusho Corporation, Japan
- Siam City Cement - Thailand
- Energy Link Ltd, New Zealand
- London Commodity Brokers - England
- Pendopo Energi Batubara - Indonesia
- Indian Oil Corporation Limited
- Borneo Indobara - Indonesia
- Iligan Light & Power Inc, Philippines
- Edison Trading Spa - Italy
- Makarim & Taira - Indonesia
- Antam Resourcindo - Indonesia
- Chamber of Mines of South Africa
- Aditya Birla Group - India
- Jaiprakash Power Ventures ltd
- Maheswari Brothers Coal Limited - India
- White Energy Company Limited
- Meralco Power Generation, Philippines
- PowerSource Philippines DevCo
- Ministry of Transport, Egypt
- Indogreen Group - Indonesia
- LBH Netherlands Bv - Netherlands
- Holcim Trading Pte Ltd - Singapore
- Economic Council, Georgia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Grasim Industreis Ltd - India
- Kobexindo Tractors - Indoneisa
- Orica Mining Services - Indonesia
- San Jose City I Power Corp, Philippines
- Indian Energy Exchange, India
- IHS Mccloskey Coal Group - USA
- Uttam Galva Steels Limited - India
- Ambuja Cements Ltd - India
- Semirara Mining Corp, Philippines
- Posco Energy - South Korea
- Karbindo Abesyapradhi - Indoneisa
- Global Green Power PLC Corporation, Philippines
- Sojitz Corporation - Japan
- Karaikal Port Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Miang Besar Coal Terminal - Indonesia
- The State Trading Corporation of India Ltd
- Rio Tinto Coal - Australia
- Singapore Mercantile Exchange
- European Bulk Services B.V. - Netherlands
- Georgia Ports Authority, United States
- Sarangani Energy Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Manunggal Multi Energi - Indonesia
- Parry Sugars Refinery, India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Maharashtra Electricity Regulatory Commission - India
- Vijayanagar Sugar Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Deloitte Consulting - India
- Mercuria Energy - Indonesia
- Riau Bara Harum - Indonesia
- GVK Power & Infra Limited - India
- SN Aboitiz Power Inc, Philippines
- Marubeni Corporation - India
- Formosa Plastics Group - Taiwan
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