ABN Amro has signed an agreement with Sinosure which will help the Chinese export credit agency boost its funding for shipping and offshore drilling.

While no specific transactions have been earmarked for partner funding, the bank’s Asia head of export and project finance Erwin Boon tells GTR that the pair are already working on a “pipeline of projects” in these areas.

In the usual ECA-backed model, the Dutch-headquartered ABN Amro is likely to provide medium and long-term financing to Chinese companies operating in the sector, guaranteed by Sinosure, while the Chinese agency is also hoping to drawdown on the bank’s experience in the sector.

Sinosure has been previously active in the shipping sector, often involving a mixture of financing models, but usually with some domestic banking involvement. Notable transactions include US$517m in buyer’s credit issued by Bank of China to Pacific International Lines in 2010, which Sinosure backed, and a US97m loan over 11.5 years issued to the same borrower, lent by Cina Construction Bank, along with ANZ and ING in 2012 – again with a Sinosure guarantee.

And indeed, ABN Amro has collaborated with Sinosure in the sector in the past. The bank structured the first deal to use Sinosure’s buyer’s credit coverage for the container box industry, a series of loans totalling US$78m to the United Arab Shipping Company (UASC) in 2012.

However, its involvement in offshore drilling is less established and the latest move suggests that the ECA has been given a mandate by the Chinese government to increase its coverage of this sector.

“It’s clear that the Chinese government has certain plans for shipping and offshore. Shipping is already huge. Production is higher in China than in Korea [where Kexim and K-Sure have been extremely active in the sector]. The Chinese government is managing that sector and Sinosure is one of the organisations that can play a substantial role in supporting it,” Boon says.

Meanwhile, China this week lifted the ban on dry bulk cargo ships with capacity of 400,000 deadweight ton (dwt) – an embargo which was ostensibly setup for safety purposes, but which most experts agree was an effort to protect its own shipping industry from the megaships operated by the Brazilian cargo giant Vale.

Vale ordered 12 Valemax iron ore carriers in 2008, which are the largest bulk carriers ever constructed. The ships were designed to put Brazil’s iron ore sector on an even keel with competitors in Australia, which can get their stock to the Chinese market much more quickly.

However, China forbade the ships from docking at its ports in 2011, after Chinese state-owned shipping companies claimed they were unsafe. The government this week reversed the ban, after a number of its shipping companies struck deals with Vale last year.

The news comes with iron ore at its lowest market price for six years and has left some analysts to proclaim a shift in power in the iron ore industry, where the power traditionally laid with the producers, but now lies with the buyer.

Speaking to the South China Morning Post this week, analyst Jiang Ming of Haitong Securities said: “Resolution of the dispute coincides with a paradigm shift in the global iron ore trade from a seller’s market to a buyer’s market. China has regained pricing power it lost in the past decade over imported iron ore.”