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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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- GAC Shipping (India) Pvt Ltd
- PetroVietnam Power Coal Import and Supply Company
- Sinarmas Energy and Mining - Indonesia
- Gujarat Sidhee Cement - India
- GVK Power & Infra Limited - India
- Lanco Infratech Ltd - India
- Global Coal Blending Company Limited - Australia
- Cigading International Bulk Terminal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Madhucon Powers Ltd - India
- Siam City Cement - Thailand
- Wilmar Investment Holdings
- Globalindo Alam Lestari - Indonesia
- South Luzon Thermal Energy Corporation
- Energy Link Ltd, New Zealand
- Coal and Oil Company - UAE
- Ministry of Finance - Indonesia
- Thai Mozambique Logistica
- Toyota Tsusho Corporation, Japan
- IHS Mccloskey Coal Group - USA
- Edison Trading Spa - Italy
- Oldendorff Carriers - Singapore
- Bhushan Steel Limited - India
- Orica Australia Pty. Ltd.
- Ceylon Electricity Board - Sri Lanka
- India Bulls Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- Mercator Lines Limited - India
- Siam City Cement PLC, Thailand
- Minerals Council of Australia
- Karbindo Abesyapradhi - Indoneisa
- Xindia Steels Limited - India
- Salva Resources Pvt Ltd - India
- Agrawal Coal Company - India
- Bangladesh Power Developement Board
- Bukit Asam (Persero) Tbk - Indonesia
- Attock Cement Pakistan Limited
- Sindya Power Generating Company Private Ltd
- Planning Commission, India
- San Jose City I Power Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Marubeni Corporation - India
- Georgia Ports Authority, United States
- Price Waterhouse Coopers - Russia
- Kepco SPC Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Renaissance Capital - South Africa
- Wood Mackenzie - Singapore
- Bukit Makmur.PT - Indonesia
- Bhoruka Overseas - Indonesia
- MS Steel International - UAE
- European Bulk Services B.V. - Netherlands
- Dalmia Cement Bharat India
- Star Paper Mills Limited - India
- Global Business Power Corporation, Philippines
- London Commodity Brokers - England
- TNB Fuel Sdn Bhd - Malaysia
- Ambuja Cements Ltd - India
- Indonesian Coal Mining Association
- Iligan Light & Power Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Malabar Cements Ltd - India
- Directorate Of Revenue Intelligence - India
- LBH Netherlands Bv - Netherlands
- ICICI Bank Limited - India
- Meralco Power Generation, Philippines
- Banpu Public Company Limited - Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Ind-Barath Power Infra Limited - India
- SN Aboitiz Power Inc, Philippines
- Coastal Gujarat Power Limited - India
- Deloitte Consulting - India
- Electricity Authority, New Zealand
- Orica Mining Services - Indonesia
- Goldman Sachs - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Merrill Lynch Commodities Europe
- Energy Development Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Indogreen Group - Indonesia
- Electricity Generating Authority of Thailand
- Sree Jayajothi Cements Limited - India
- Barasentosa Lestari - Indonesia
- Makarim & Taira - Indonesia
- International Coal Ventures Pvt Ltd - India
- PowerSource Philippines DevCo
- Samtan Co., Ltd - South Korea
- Gujarat Electricity Regulatory Commission - India
- Alfred C Toepfer International GmbH - Germany
- Kaltim Prima Coal - Indonesia
- Eastern Coal Council - USA
- Jindal Steel & Power Ltd - India
- Petron Corporation, Philippines
- Tamil Nadu electricity Board
- Sical Logistics Limited - India
- Rio Tinto Coal - Australia
- Timah Investasi Mineral - Indoneisa
- TeaM Sual Corporation - Philippines
- Tata Chemicals Ltd - India
- Ministry of Transport, Egypt
- Holcim Trading Pte Ltd - Singapore
- CIMB Investment Bank - Malaysia
- Australian Coal Association
- Semirara Mining Corp, Philippines
- Africa Commodities Group - South Africa
- Kideco Jaya Agung - Indonesia
- Videocon Industries ltd - India
- Singapore Mercantile Exchange
- Global Green Power PLC Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Trasteel International SA, Italy
- Parliament of New Zealand
- Therma Luzon, Inc, Philippines
- Bharathi Cement Corporation - India
- The University of Queensland
- Altura Mining Limited, Indonesia
- GMR Energy Limited - India
- Kumho Petrochemical, South Korea
- SMG Consultants - Indonesia
- Savvy Resources Ltd - HongKong
- Parry Sugars Refinery, India
- Baramulti Group, Indonesia
- Leighton Contractors Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The State Trading Corporation of India Ltd
- Riau Bara Harum - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Port Waratah Coal Services - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Anglo American - United Kingdom
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Bulk Trading Sa - Switzerland
- McConnell Dowell - Australia
- Indian Energy Exchange, India
- PNOC Exploration Corporation - Philippines
- Thiess Contractors Indonesia
- Manunggal Multi Energi - Indonesia
- Sarangani Energy Corporation, Philippines
- Mjunction Services Limited - India
- Formosa Plastics Group - Taiwan
- Krishnapatnam Port Company Ltd. - India
- Latin American Coal - Colombia
- Straits Asia Resources Limited - Singapore
- Power Finance Corporation Ltd., India
- Carbofer General Trading SA - India
- ASAPP Information Group - India
- Central Java Power - Indonesia
- Grasim Industreis Ltd - India
- Essar Steel Hazira Ltd - India
- Heidelberg Cement - Germany
- Commonwealth Bank - Australia
- Kalimantan Lumbung Energi - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- IEA Clean Coal Centre - UK
- Cement Manufacturers Association - India
- Miang Besar Coal Terminal - Indonesia
- Australian Commodity Traders Exchange
- CNBM International Corporation - China
- Posco Energy - South Korea
- Aditya Birla Group - India
- Mintek Dendrill Indonesia
- Binh Thuan Hamico - Vietnam
- Kohat Cement Company Ltd. - Pakistan
- Neyveli Lignite Corporation Ltd, - India
- Standard Chartered Bank - UAE
- Semirara Mining and Power Corporation, Philippines
- Romanian Commodities Exchange
- Jaiprakash Power Ventures ltd
- Bukit Baiduri Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Pendopo Energi Batubara - Indonesia
- Metalloyd Limited - United Kingdom
- Kapuas Tunggal Persada - Indonesia
- Indika Energy - Indonesia
- Chamber of Mines of South Africa
- The Treasury - Australian Government
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Central Electricity Authority - India
- Kartika Selabumi Mining - Indonesia
- White Energy Company Limited
- Maheswari Brothers Coal Limited - India
- Eastern Energy - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Larsen & Toubro Limited - India
- Kobexindo Tractors - Indoneisa
- Vedanta Resources Plc - India
- OPG Power Generation Pvt Ltd - India
- Medco Energi Mining Internasional
- VISA Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Aboitiz Power Corporation - Philippines
- Sojitz Corporation - Japan
- Borneo Indobara - Indonesia
- Sakthi Sugars Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Interocean Group of Companies - India
- Karaikal Port Pvt Ltd - India
- Ministry of Mines - Canada
- Vizag Seaport Private Limited - India
- Economic Council, Georgia
- Mercuria Energy - Indonesia
- Coalindo Energy - Indonesia
- Uttam Galva Steels Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SMC Global Power, Philippines
- New Zealand Coal & Carbon
- Bhatia International Limited - India
- Simpson Spence & Young - Indonesia
- Indian Oil Corporation Limited
- Antam Resourcindo - Indonesia
- PTC India Limited - India
- Bayan Resources Tbk. - Indonesia
- Independent Power Producers Association of India
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