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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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Friday, 12 April 19
U.S : MORE THAN 7 GW OF COAL-FIRED GENERATION IS SCHEDULED TO RETIRE BY THE END OF 2020 - EIA
EIA estimates that U.S. coal production decreased by 19 million short tons (MMst) (2%) in 2018, totaling 756 MMst.
EIA also expects ...
Friday, 12 April 19
GLENCORE WINS $520 MILLION DEAL TO SELL COAL TO MEXICO - REUTERS
Global trader Glencore has won contracts worth around $520 million to supply 4.94 million tonnes of coal to Mexico, state-run power utility the Fed ...
Thursday, 11 April 19
AUSTRALIAN COAL IN THE FRONTLINE OF CHINA'S SUPPLY GLUT - AUSTRALIAN FINANCIAL REVIEW
Australian coal will be hardest hit as China cuts foreign imports of its key energy source to tackle oversupply, and implements policies favouring ...
Wednesday, 10 April 19
COALTRANS ASIA - TAKE PART IN THE LARGEST COAL EVENT IN THE WORLD!
Take part in the largest coal event in the world!
Coaltrans Asia is back this June bringing together the entire international coal s ...
Wednesday, 10 April 19
KOSPO INVITED BIDS FOR 160K MT OF MIN. 3700 NCV COAL FOR JUNE LOADING
COALspot.com: South Korea state-owned utility Korea Southern Power Co. Ltd (KOSPO) issued a tender for 160,000 MT of min. 3,800 Kcal/kg ~max.4,100 ...
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- Gujarat Electricity Regulatory Commission - India
- Power Finance Corporation Ltd., India
- Jorong Barutama Greston.PT - Indonesia
- Commonwealth Bank - Australia
- Gujarat Mineral Development Corp Ltd - India
- The University of Queensland
- Ministry of Transport, Egypt
- Antam Resourcindo - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- The Treasury - Australian Government
- Sinarmas Energy and Mining - Indonesia
- Vedanta Resources Plc - India
- Simpson Spence & Young - Indonesia
- Kepco SPC Power Corporation, Philippines
- GVK Power & Infra Limited - India
- Global Green Power PLC Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Directorate Of Revenue Intelligence - India
- Kumho Petrochemical, South Korea
- Altura Mining Limited, Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Edison Trading Spa - Italy
- European Bulk Services B.V. - Netherlands
- White Energy Company Limited
- PNOC Exploration Corporation - Philippines
- Siam City Cement PLC, Thailand
- Ministry of Finance - Indonesia
- Riau Bara Harum - Indonesia
- Formosa Plastics Group - Taiwan
- OPG Power Generation Pvt Ltd - India
- Grasim Industreis Ltd - India
- Anglo American - United Kingdom
- Kideco Jaya Agung - Indonesia
- Baramulti Group, Indonesia
- Indogreen Group - Indonesia
- Essar Steel Hazira Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Kartika Selabumi Mining - Indonesia
- SMG Consultants - Indonesia
- TeaM Sual Corporation - Philippines
- Jindal Steel & Power Ltd - India
- Ministry of Mines - Canada
- Videocon Industries ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Sarangani Energy Corporation, Philippines
- Australian Coal Association
- ICICI Bank Limited - India
- Dalmia Cement Bharat India
- Vijayanagar Sugar Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Ambuja Cements Ltd - India
- Meralco Power Generation, Philippines
- Eastern Energy - Thailand
- Latin American Coal - Colombia
- Australian Commodity Traders Exchange
- Interocean Group of Companies - India
- GMR Energy Limited - India
- IEA Clean Coal Centre - UK
- Asmin Koalindo Tuhup - Indonesia
- India Bulls Power Limited - India
- Bhoruka Overseas - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Tata Chemicals Ltd - India
- Ind-Barath Power Infra Limited - India
- SN Aboitiz Power Inc, Philippines
- Planning Commission, India
- Thiess Contractors Indonesia
- PowerSource Philippines DevCo
- Indian Oil Corporation Limited
- San Jose City I Power Corp, Philippines
- Cement Manufacturers Association - India
- Thai Mozambique Logistica
- Minerals Council of Australia
- Mercuria Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Singapore Mercantile Exchange
- Globalindo Alam Lestari - Indonesia
- Price Waterhouse Coopers - Russia
- GN Power Mariveles Coal Plant, Philippines
- Trasteel International SA, Italy
- Iligan Light & Power Inc, Philippines
- Coastal Gujarat Power Limited - India
- Uttam Galva Steels Limited - India
- Aditya Birla Group - India
- Toyota Tsusho Corporation, Japan
- Energy Link Ltd, New Zealand
- Sical Logistics Limited - India
- Manunggal Multi Energi - Indonesia
- Medco Energi Mining Internasional
- Maheswari Brothers Coal Limited - India
- Leighton Contractors Pty Ltd - Australia
- Savvy Resources Ltd - HongKong
- Marubeni Corporation - India
- IHS Mccloskey Coal Group - USA
- International Coal Ventures Pvt Ltd - India
- Lanco Infratech Ltd - India
- South Luzon Thermal Energy Corporation
- Sakthi Sugars Limited - India
- Meenaskhi Energy Private Limited - India
- Madhucon Powers Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Bharathi Cement Corporation - India
- Economic Council, Georgia
- Parry Sugars Refinery, India
- Global Coal Blending Company Limited - Australia
- Salva Resources Pvt Ltd - India
- Standard Chartered Bank - UAE
- Orica Mining Services - Indonesia
- Borneo Indobara - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bangladesh Power Developement Board
- Metalloyd Limited - United Kingdom
- Samtan Co., Ltd - South Korea
- Electricity Authority, New Zealand
- Miang Besar Coal Terminal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Petron Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Posco Energy - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Central Electricity Authority - India
- Wood Mackenzie - Singapore
- Bayan Resources Tbk. - Indonesia
- Makarim & Taira - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jaiprakash Power Ventures ltd
- Kohat Cement Company Ltd. - Pakistan
- Maharashtra Electricity Regulatory Commission - India
- The State Trading Corporation of India Ltd
- Georgia Ports Authority, United States
- Mintek Dendrill Indonesia
- Goldman Sachs - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- CIMB Investment Bank - Malaysia
- Agrawal Coal Company - India
- Independent Power Producers Association of India
- Kaltim Prima Coal - Indonesia
- Gujarat Sidhee Cement - India
- Sree Jayajothi Cements Limited - India
- Binh Thuan Hamico - Vietnam
- Indika Energy - Indonesia
- Bhushan Steel Limited - India
- Indo Tambangraya Megah - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- MS Steel International - UAE
- AsiaOL BioFuels Corp., Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Malabar Cements Ltd - India
- Karaikal Port Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Eastern Coal Council - USA
- New Zealand Coal & Carbon
- Wilmar Investment Holdings
- Timah Investasi Mineral - Indoneisa
- Central Java Power - Indonesia
- McConnell Dowell - Australia
- Parliament of New Zealand
- Pendopo Energi Batubara - Indonesia
- Heidelberg Cement - Germany
- Carbofer General Trading SA - India
- Chamber of Mines of South Africa
- Ceylon Electricity Board - Sri Lanka
- PTC India Limited - India
- Indonesian Coal Mining Association
- Therma Luzon, Inc, Philippines
- CNBM International Corporation - China
- Vizag Seaport Private Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Sojitz Corporation - Japan
- Coal and Oil Company - UAE
- Attock Cement Pakistan Limited
- Semirara Mining Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Romanian Commodities Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Coalindo Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- GAC Shipping (India) Pvt Ltd
- Larsen & Toubro Limited - India
- Star Paper Mills Limited - India
- Global Business Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Mjunction Services Limited - India
- Bulk Trading Sa - Switzerland
- Electricity Generating Authority of Thailand
- Mercator Lines Limited - India
- Energy Development Corp, Philippines
- Merrill Lynch Commodities Europe
- VISA Power Limited - India
- Tamil Nadu electricity Board
- Aboitiz Power Corporation - Philippines
- SMC Global Power, Philippines
- Orica Australia Pty. Ltd.
- London Commodity Brokers - England
- Siam City Cement - Thailand
- Bhatia International Limited - India
- Indian Energy Exchange, India
- Bukit Makmur.PT - Indonesia
- Africa Commodities Group - South Africa
- Renaissance Capital - South Africa
- Alfred C Toepfer International GmbH - Germany
- Krishnapatnam Port Company Ltd. - India
- Sindya Power Generating Company Private Ltd
- Port Waratah Coal Services - Australia
- Rio Tinto Coal - Australia
- Rashtriya Ispat Nigam Limited - India
- Oldendorff Carriers - Singapore
- ASAPP Information Group - India
- Intertek Mineral Services - Indonesia
- LBH Netherlands Bv - Netherlands
- Neyveli Lignite Corporation Ltd, - India
- Xindia Steels Limited - India
- Deloitte Consulting - India
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