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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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Sunday, 28 April 19
SUPRAMAX: A 54,000DWT VESSEL OPEN GRESIK FIXED VIA AUSTRALIA, REDELIVERY CHINA, IN THE MID $12,000S - BALTIC BRIEFING
Capesize
Following the holidays, activity increased in both the Pacific and Atlantic Basins. The 5TC average rallied, closing at $8,596, up $1, ...
Wednesday, 24 April 19
PANAMAX: IN THE EAST, THE MARKET MOVED SIDE-WAYS, WITH FEWER COAL CARGOES FROM INDONESIA PUTTING PRESSURE ON RATES - INTERMODAL
Sentiment in the Dry Bulk market slowly but steadily kept improving last week as Capesize rates remained in recovery mode and Panamax earnings also ...
Monday, 22 April 19
COAL INDIA TO ASK POWER PLANTS TO CUT COAL IMPORTS - DNA
Co to encourage import substitution with domestic supplies at power plants
Surge in coal imports has now forced Coal India Ltd (CIL) ...
Thursday, 18 April 19
BIMCO SEES HARD TIMES AHEAD FOR CAPESIZES
China’s increased use of scrap metal for its production of crude steel is fundamentally critical to the dry bulk shipping industry. Mostly Ca ...
Wednesday, 17 April 19
ONCE AGAIN WE FACED WITH THE SITUATION OF THE DRY BALTIC INDEX BEING BELOW 1,000 POINTS - INTERMODAL
Once again we are faced with the situation of the Dry Baltic Index being below 1,000 points. In a market where the feeling of insecurity is almost ...
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- Timah Investasi Mineral - Indoneisa
- Merrill Lynch Commodities Europe
- Dalmia Cement Bharat India
- White Energy Company Limited
- Kepco SPC Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Semirara Mining Corp, Philippines
- Tata Chemicals Ltd - India
- Central Electricity Authority - India
- Petron Corporation, Philippines
- Baramulti Group, Indonesia
- Grasim Industreis Ltd - India
- Siam City Cement - Thailand
- Sojitz Corporation - Japan
- Australian Coal Association
- Billiton Holdings Pty Ltd - Australia
- Romanian Commodities Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- Marubeni Corporation - India
- MS Steel International - UAE
- Bhushan Steel Limited - India
- OPG Power Generation Pvt Ltd - India
- Tamil Nadu electricity Board
- Lanco Infratech Ltd - India
- Xindia Steels Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Kumho Petrochemical, South Korea
- Vizag Seaport Private Limited - India
- Aboitiz Power Corporation - Philippines
- Simpson Spence & Young - Indonesia
- India Bulls Power Limited - India
- Indian Energy Exchange, India
- Kohat Cement Company Ltd. - Pakistan
- Uttam Galva Steels Limited - India
- IEA Clean Coal Centre - UK
- Australian Commodity Traders Exchange
- ASAPP Information Group - India
- Chettinad Cement Corporation Ltd - India
- Manunggal Multi Energi - Indonesia
- Power Finance Corporation Ltd., India
- Wood Mackenzie - Singapore
- International Coal Ventures Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Maheswari Brothers Coal Limited - India
- Independent Power Producers Association of India
- Petrochimia International Co. Ltd.- Taiwan
- Edison Trading Spa - Italy
- Formosa Plastics Group - Taiwan
- Chamber of Mines of South Africa
- AsiaOL BioFuels Corp., Philippines
- Miang Besar Coal Terminal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Siam City Cement PLC, Thailand
- Attock Cement Pakistan Limited
- Kideco Jaya Agung - Indonesia
- GMR Energy Limited - India
- Bangladesh Power Developement Board
- Kartika Selabumi Mining - Indonesia
- TeaM Sual Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Sidhee Cement - India
- Sical Logistics Limited - India
- Parliament of New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Heidelberg Cement - Germany
- Oldendorff Carriers - Singapore
- Thai Mozambique Logistica
- Barasentosa Lestari - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Videocon Industries ltd - India
- Posco Energy - South Korea
- Sakthi Sugars Limited - India
- Salva Resources Pvt Ltd - India
- Anglo American - United Kingdom
- Bukit Baiduri Energy - Indonesia
- Parry Sugars Refinery, India
- Bulk Trading Sa - Switzerland
- PowerSource Philippines DevCo
- Vijayanagar Sugar Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Bayan Resources Tbk. - Indonesia
- Ministry of Finance - Indonesia
- GAC Shipping (India) Pvt Ltd
- Kobexindo Tractors - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Rio Tinto Coal - Australia
- Sinarmas Energy and Mining - Indonesia
- Port Waratah Coal Services - Australia
- European Bulk Services B.V. - Netherlands
- Cigading International Bulk Terminal - Indonesia
- GVK Power & Infra Limited - India
- Minerals Council of Australia
- Directorate General of MIneral and Coal - Indonesia
- Sindya Power Generating Company Private Ltd
- Indian Oil Corporation Limited
- Jorong Barutama Greston.PT - Indonesia
- Medco Energi Mining Internasional
- McConnell Dowell - Australia
- Rashtriya Ispat Nigam Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Straits Asia Resources Limited - Singapore
- Energy Link Ltd, New Zealand
- Binh Thuan Hamico - Vietnam
- Indo Tambangraya Megah - Indonesia
- Ministry of Mines - Canada
- Latin American Coal - Colombia
- Energy Development Corp, Philippines
- Indika Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Cement Manufacturers Association - India
- New Zealand Coal & Carbon
- CIMB Investment Bank - Malaysia
- Jaiprakash Power Ventures ltd
- Bukit Makmur.PT - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- LBH Netherlands Bv - Netherlands
- Madhucon Powers Ltd - India
- Price Waterhouse Coopers - Russia
- Agrawal Coal Company - India
- GN Power Mariveles Coal Plant, Philippines
- Indonesian Coal Mining Association
- CNBM International Corporation - China
- San Jose City I Power Corp, Philippines
- Aditya Birla Group - India
- Wilmar Investment Holdings
- VISA Power Limited - India
- Mercuria Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Standard Chartered Bank - UAE
- Coal and Oil Company - UAE
- Eastern Energy - Thailand
- Deloitte Consulting - India
- Malabar Cements Ltd - India
- Eastern Coal Council - USA
- Karbindo Abesyapradhi - Indoneisa
- Commonwealth Bank - Australia
- Ministry of Transport, Egypt
- Jindal Steel & Power Ltd - India
- Mjunction Services Limited - India
- Makarim & Taira - Indonesia
- Coalindo Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- PTC India Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Orica Australia Pty. Ltd.
- Goldman Sachs - Singapore
- Alfred C Toepfer International GmbH - Germany
- Borneo Indobara - Indonesia
- Africa Commodities Group - South Africa
- Ceylon Electricity Board - Sri Lanka
- Banpu Public Company Limited - Thailand
- Gujarat Electricity Regulatory Commission - India
- Semirara Mining and Power Corporation, Philippines
- Carbofer General Trading SA - India
- Global Coal Blending Company Limited - Australia
- Maharashtra Electricity Regulatory Commission - India
- Bhoruka Overseas - Indonesia
- Renaissance Capital - South Africa
- The Treasury - Australian Government
- Mintek Dendrill Indonesia
- Kapuas Tunggal Persada - Indonesia
- Samtan Co., Ltd - South Korea
- Economic Council, Georgia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Georgia Ports Authority, United States
- Bharathi Cement Corporation - India
- SMC Global Power, Philippines
- Holcim Trading Pte Ltd - Singapore
- Toyota Tsusho Corporation, Japan
- London Commodity Brokers - England
- Antam Resourcindo - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Indogreen Group - Indonesia
- Ind-Barath Power Infra Limited - India
- Metalloyd Limited - United Kingdom
- Sree Jayajothi Cements Limited - India
- Bhatia International Limited - India
- Therma Luzon, Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Trasteel International SA, Italy
- Interocean Group of Companies - India
- PNOC Exploration Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- Orica Mining Services - Indonesia
- Altura Mining Limited, Indonesia
- Directorate Of Revenue Intelligence - India
- Central Java Power - Indonesia
- The University of Queensland
- SN Aboitiz Power Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Ambuja Cements Ltd - India
- Meralco Power Generation, Philippines
- Intertek Mineral Services - Indonesia
- Star Paper Mills Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- ICICI Bank Limited - India
- Kaltim Prima Coal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- SMG Consultants - Indonesia
- Riau Bara Harum - Indonesia
- IHS Mccloskey Coal Group - USA
- South Luzon Thermal Energy Corporation
- Electricity Generating Authority of Thailand
- Vedanta Resources Plc - India
- The State Trading Corporation of India Ltd
- Karaikal Port Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Global Business Power Corporation, Philippines
- Electricity Authority, New Zealand
- Thiess Contractors Indonesia
- Larsen & Toubro Limited - India
- Singapore Mercantile Exchange
- Planning Commission, India
- Mercator Lines Limited - India
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