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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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Thursday, 16 May 19
SUPRAMAX: INDO/CHINA COAL RV TRADING AROUND US$ 9,000 BSS S.CHINA DELIVERY - FEARNLEYS
Capesize
This volatile segment is trying to find a clear direction from the present US$ 12,000/day earnings for standard units says Fearnleys W ...
Wednesday, 15 May 19
SHIPPING MARKET INSIGHT - THEODORE NTALAKOS
Modern warfare - Trade wars & sanctions
As of May 1st, the U.S. has ended waivers to the sanctions that had allowed the top buyers of Irani ...
Monday, 13 May 19
INDONESIAN COAL PRICE REFERENCE CONTINUES TO FALL
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down the benchmark price of Indonesian thermal ...
Monday, 13 May 19
SUPRAMAX: SOUTHEAST ASIA THE MARKET SAW BETTER DEMAND - BALTIC BRIEFING
Cape
The market continued its rollercoaster ride last week opening with negative sentiment, but turning around in dramatic fashion by the week& ...
Thursday, 09 May 19
DEEP OFFSHORE SOUTHEAST ASIA CONGRESS 2019
Deep Offshore Southeast Asia Congress 2019
Event Date:2-3th July. 2019t
Location: Jakarta, Indonesia
Sarawak Shell Berhad (S ...
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- Karaikal Port Pvt Ltd - India
- Electricity Authority, New Zealand
- Bukit Makmur.PT - Indonesia
- Singapore Mercantile Exchange
- Mintek Dendrill Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Rashtriya Ispat Nigam Limited - India
- Manunggal Multi Energi - Indonesia
- Sical Logistics Limited - India
- Mercator Lines Limited - India
- SMC Global Power, Philippines
- Larsen & Toubro Limited - India
- Ministry of Mines - Canada
- Bhushan Steel Limited - India
- Globalindo Alam Lestari - Indonesia
- New Zealand Coal & Carbon
- Krishnapatnam Port Company Ltd. - India
- ICICI Bank Limited - India
- San Jose City I Power Corp, Philippines
- Mjunction Services Limited - India
- Thiess Contractors Indonesia
- Gujarat Sidhee Cement - India
- GMR Energy Limited - India
- International Coal Ventures Pvt Ltd - India
- India Bulls Power Limited - India
- Salva Resources Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Economic Council, Georgia
- Kapuas Tunggal Persada - Indonesia
- Medco Energi Mining Internasional
- Kumho Petrochemical, South Korea
- Savvy Resources Ltd - HongKong
- VISA Power Limited - India
- Videocon Industries ltd - India
- Uttam Galva Steels Limited - India
- London Commodity Brokers - England
- Aboitiz Power Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- The Treasury - Australian Government
- OPG Power Generation Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Gujarat Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Ministry of Transport, Egypt
- Sarangani Energy Corporation, Philippines
- Port Waratah Coal Services - Australia
- Parry Sugars Refinery, India
- Sinarmas Energy and Mining - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Meralco Power Generation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- GAC Shipping (India) Pvt Ltd
- SMG Consultants - Indonesia
- Sindya Power Generating Company Private Ltd
- McConnell Dowell - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- European Bulk Services B.V. - Netherlands
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coalindo Energy - Indonesia
- Vizag Seaport Private Limited - India
- Global Green Power PLC Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indian Oil Corporation Limited
- Bharathi Cement Corporation - India
- Orica Mining Services - Indonesia
- Simpson Spence & Young - Indonesia
- Metalloyd Limited - United Kingdom
- Commonwealth Bank - Australia
- Ceylon Electricity Board - Sri Lanka
- Tata Chemicals Ltd - India
- Malabar Cements Ltd - India
- Attock Cement Pakistan Limited
- TNB Fuel Sdn Bhd - Malaysia
- Georgia Ports Authority, United States
- Bukit Baiduri Energy - Indonesia
- Wood Mackenzie - Singapore
- White Energy Company Limited
- Sojitz Corporation - Japan
- Jorong Barutama Greston.PT - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Borneo Indobara - Indonesia
- Eastern Energy - Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Miang Besar Coal Terminal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Energy Development Corp, Philippines
- ASAPP Information Group - India
- Africa Commodities Group - South Africa
- Directorate General of MIneral and Coal - Indonesia
- Bhatia International Limited - India
- Siam City Cement PLC, Thailand
- Banpu Public Company Limited - Thailand
- Global Business Power Corporation, Philippines
- Makarim & Taira - Indonesia
- PNOC Exploration Corporation - Philippines
- Merrill Lynch Commodities Europe
- Meenaskhi Energy Private Limited - India
- Essar Steel Hazira Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Posco Energy - South Korea
- Carbofer General Trading SA - India
- Kartika Selabumi Mining - Indonesia
- Parliament of New Zealand
- Trasteel International SA, Italy
- TeaM Sual Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- Sree Jayajothi Cements Limited - India
- The University of Queensland
- Orica Australia Pty. Ltd.
- Dalmia Cement Bharat India
- The State Trading Corporation of India Ltd
- Star Paper Mills Limited - India
- Renaissance Capital - South Africa
- Vedanta Resources Plc - India
- Kaltim Prima Coal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Jindal Steel & Power Ltd - India
- Bayan Resources Tbk. - Indonesia
- Anglo American - United Kingdom
- LBH Netherlands Bv - Netherlands
- South Luzon Thermal Energy Corporation
- Asmin Koalindo Tuhup - Indonesia
- Barasentosa Lestari - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Bangladesh Power Developement Board
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Cement Manufacturers Association - India
- Agrawal Coal Company - India
- Alfred C Toepfer International GmbH - Germany
- Indo Tambangraya Megah - Indonesia
- Central Electricity Authority - India
- Romanian Commodities Exchange
- Indian Energy Exchange, India
- PetroVietnam Power Coal Import and Supply Company
- MS Steel International - UAE
- Eastern Coal Council - USA
- Minerals Council of Australia
- Coal and Oil Company - UAE
- IHS Mccloskey Coal Group - USA
- IEA Clean Coal Centre - UK
- Chamber of Mines of South Africa
- Cigading International Bulk Terminal - Indonesia
- Price Waterhouse Coopers - Russia
- CNBM International Corporation - China
- Tamil Nadu electricity Board
- PowerSource Philippines DevCo
- Karbindo Abesyapradhi - Indoneisa
- Samtan Co., Ltd - South Korea
- Independent Power Producers Association of India
- Petron Corporation, Philippines
- Latin American Coal - Colombia
- Kepco SPC Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Altura Mining Limited, Indonesia
- Deloitte Consulting - India
- Kideco Jaya Agung - Indonesia
- Baramulti Group, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Energy Link Ltd, New Zealand
- Indogreen Group - Indonesia
- Oldendorff Carriers - Singapore
- Aditya Birla Group - India
- Power Finance Corporation Ltd., India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Finance - Indonesia
- Edison Trading Spa - Italy
- Australian Commodity Traders Exchange
- Indika Energy - Indonesia
- Central Java Power - Indonesia
- Straits Asia Resources Limited - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Jaiprakash Power Ventures ltd
- Ind-Barath Power Infra Limited - India
- GVK Power & Infra Limited - India
- AsiaOL BioFuels Corp., Philippines
- Intertek Mineral Services - Indonesia
- Chettinad Cement Corporation Ltd - India
- PTC India Limited - India
- CIMB Investment Bank - Malaysia
- Formosa Plastics Group - Taiwan
- Bulk Trading Sa - Switzerland
- Planning Commission, India
- Australian Coal Association
- Maharashtra Electricity Regulatory Commission - India
- Coastal Gujarat Power Limited - India
- Marubeni Corporation - India
- Xindia Steels Limited - India
- Standard Chartered Bank - UAE
- Sakthi Sugars Limited - India
- Riau Bara Harum - Indonesia
- Ambuja Cements Ltd - India
- Lanco Infratech Ltd - India
- Timah Investasi Mineral - Indoneisa
- Heidelberg Cement - Germany
- Pendopo Energi Batubara - Indonesia
- Mercuria Energy - Indonesia
- Wilmar Investment Holdings
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Semirara Mining and Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Electricity Generating Authority of Thailand
- Goldman Sachs - Singapore
- Rio Tinto Coal - Australia
- Toyota Tsusho Corporation, Japan
- Thai Mozambique Logistica
- Interocean Group of Companies - India
- Antam Resourcindo - Indonesia
- Directorate Of Revenue Intelligence - India
- Grasim Industreis Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Madhucon Powers Ltd - India
- Semirara Mining Corp, Philippines
- Indonesian Coal Mining Association
- Siam City Cement - Thailand
- Gujarat Mineral Development Corp Ltd - India
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