China Exim Bank aims to commit more than $15.8bn in shipping deals for 2015

For 2014, China Exim Bank committed $15.8bn to its ship financing portfolio, putting the bank’s cumulative total to RMB586bn ($94.6bn) on 9,804 ships with 249m dwt in total capacity, both to shipowners and shipyards, since the bank was established in 1994.

“We have maintained growth over the last decade but I think it will now be challenging because we are not seeing an increase in shipbuilding activities in China this year,” said Li Xiang, deputy director, transport finance department, China Exim Bank.

Li was speaking at a ship finance session as part of the biennial Sea Asia 2015 conference held in Singapore on Thursday.

“But we aim to maintain our growth and the total commitment (for this year) will be a bit higher than last year,” Li told Seatrade Global, adding that there is no specific figure to reveal.

In 2014, Chinese shipyards received 59.95m dwt of newbuilding orders, down 14.2% year-on-year. And in the first quarter of this year, new orders plunged by 76.8% to 5.99m dwt, according to statistics from China Association of The National Shipbuilding Industry (Cansi).

From the total of $15.8bn of loans committed in 2014, Li said the offshore sector has only taken up a small proportion, as Chinese yards started to become active in building offshore vessels only three to four years ago.

“We finance only China-built vessels and offshore has not been traditionally strong for Chinese shipyards. We tend to be very selective in choosing our clients and we focus on the big names that deal directly with the oil companies. We also normally require long term employment attached to the (offshore) asset,” Li explained.

Going forward, China Exim Bank will continue to prioritise their lendings to higher technology, higher value assets such as LNG vessels, offshore vessels and eco-ships. “We will have new funding channels and we are also ready to finance secondhand and domestic vessels,” Li told delegates at the industry conference.

He pointed out that the LNG vessel market will be more stable compared to other vessel segments due to its niche, despite some decreases in charter rates from the second half of 2014.

“China is importing large volumes of LNG and there will be huge potential in the coming years for the LNG market. We think LNG will be one of our priorities and our financing will require the vessels to come with long term charters,” he said.