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Friday, 13 November 20
SHIPPING OUTLOOK TURNS STABLE ON EBITDA GROWTH, IMPROVING SUPPLY-DEMAND BALANCE - MOODY’S
 Outlook revised to stable from negative.
The global shipping industry is on course to perform better overall than we had previously expected this year. We expect the aggregate EBITDA of the shipping companies we rate globally to grow by 3%-5% in 2021, driven by a recovery in the dry bulk segment from pandemic lows and the continuance of good market fundamentals for container shipping. However, this is tempered by a likely decline in EBITDA in the tanker segment next year because of tough comparisons with record charter rates in the first half of 2020. The industry’s overall supply-demand balance is set to improve in 2021, which is the other main reason for the outlook change. However, risks remain. A tenuous global economic recovery has taken hold but ongoing pandemic fears and a resurgence in coronavirus infections in some major economies could hinder a recovery in demand for shipping services in 2021. Our outlook for the global shipping industry had been negative since March 2020.
Limited supply of new vessels and capacity management should act as a cushion to adverse market conditions.
Order books for all three shipping segments remain at record low levels in relation to their total fleets. As Exhibit 2 shows, even absent a real recovery or demand contracting moderately, the different segments would see limited growth in new capacity. In the container shipping segment, carriers could resume cancellations of sailings to reduce capacity to match demand. However, the tanker and dry bulk markets will be more sensitive to changes in demand during 2021 because they are much more fragmented than the global container market where capacity is partly organised through alliances.
Our view for the container shipping segment has changed to stable from negative. Following very disciplined capacity management by carriers, low bunker prices and increasing freight rates as demand recovered in the second half of 2020, the container shipping industry will record one of its strongest years since 2010. With supply and demand likely to be in balance given the very limited order book for new vessels, we expect a stable operating environment in 2021. Even if the global economic recovery takes longer to materialise, given the rising infections in Europe and the US, carriers’ capacity management should continue to keep freight rates broadly stable.
Our view for the dry bulk segment has changed to stable from negative. This is anchored in our expectations that the trough for dry bulk shipping companies likely happened during the second quarter of 2020 and that the market environment should gradually improve over the next 12-18 months. The recovery in key dry-bulk commodities has been more or less driven by China, where import volumes of iron ore were 11% higher in the year to date to August than in the same period in 2019. The supplydemand balance is also set to improve. Assuming the global economy recovers in 2021, we foresee dry bulk demand growing by 3%-5% versus supply growth ranging from 0.5% to 2%, depending on the level of scrapping activity and order delays/cancellations. Still, downside risks are certainly evident, including protracted lockdowns that would curb demand.
Our view for the tanker segment has changed to negative from stable. Tanker operators had a very strong first half of the year as the mix of a sudden collapse in oil prices and maintained production resulted in high demand for floating storage, particularly for very large crude carriers (VLCCs). As a result, charter rates reached record highs in the March to May period this year, but have weakened since with recent VLCC rates around half of the peak levels earlier this year. A substantial part of the fleet remains in floating storage or idle, a temporary effect that is likely to reverse, although a reversal may also result in higher scrapping. While oil demand continues to recover, fleet order books remain manageable and charter rates may seasonally rise in the fourth quarter of 2020, we believe that EBITDA in this shipping segment will contract in 2021 as the as the exceptional Q2 environment is unlikely to be repeated.
What could change the outlook. We would consider revising the outlook to positive if both the oversupply of vessels declines materially and comparable year-over-year EBITDA growth appears likely to exceed 10%. We would consider changing the outlook to negative if we see signs that shipping supply growth will exceed demand growth by more than 2% or that comparable EBITDA will decline by more than 5% year over year
Since outlooks represent our forward-looking view on business conditions that factor into our ratings, a negative (positive) outlook suggests that negative (positive) rating actions are more likely on average. However, the industry outlook does not represent a sum of upgrades, downgrades or ratings under review, or an average of the rating outlooks of issuers in the industry, but rather our assessment of the main direction of business fundamentals within the overall industry.
Source: Moody’s
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Tuesday, 17 November 20
AUSTRALIAN COAL EXPORTS TO CHINA SLUMP, BUT PRICES ARE MIXED - REUTERS
China’s unofficial ban on coal imports from Australia is starting to take its toll on volumes, with departing cargoes down sharply so far in ...
Friday, 13 November 20
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - XINHUA
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Monday, 09 November 20
INDONESIA MAY CUT BIODIESEL USE TARGET AS SUBSIDY FUND DEPLETES - FITCH
The Indonesian government may rein in its push to increase use of biodiesel as it now comes at higher cost following a fall in crude oil prices and ...
Monday, 09 November 20
SOUTH AFRICA: COAL MARKET CONDITIONS HAVE ' DETERIORATED MATERIALLY' - IEEFA
The Asian seaborne thermal coal pool is drying out
Resource Generation Ltd’s proposed but long delayed Boikarabelo coal mine i ...
Friday, 06 November 20
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - XINHUA
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
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- Port Waratah Coal Services - Australia
- Mercuria Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- PowerSource Philippines DevCo
- Globalindo Alam Lestari - Indonesia
- Minerals Council of Australia
- CIMB Investment Bank - Malaysia
- Madhucon Powers Ltd - India
- Eastern Energy - Thailand
- Posco Energy - South Korea
- Heidelberg Cement - Germany
- Videocon Industries ltd - India
- Bhatia International Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Asmin Koalindo Tuhup - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- New Zealand Coal & Carbon
- Semirara Mining Corp, Philippines
- Formosa Plastics Group - Taiwan
- Power Finance Corporation Ltd., India
- Ceylon Electricity Board - Sri Lanka
- AsiaOL BioFuels Corp., Philippines
- Bharathi Cement Corporation - India
- Bangladesh Power Developement Board
- Toyota Tsusho Corporation, Japan
- Renaissance Capital - South Africa
- Kalimantan Lumbung Energi - Indonesia
- Jindal Steel & Power Ltd - India
- Kideco Jaya Agung - Indonesia
- PTC India Limited - India
- South Luzon Thermal Energy Corporation
- London Commodity Brokers - England
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Larsen & Toubro Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Lanco Infratech Ltd - India
- Singapore Mercantile Exchange
- Meenaskhi Energy Private Limited - India
- Bukit Makmur.PT - Indonesia
- Gujarat Sidhee Cement - India
- Kaltim Prima Coal - Indonesia
- Bulk Trading Sa - Switzerland
- Pendopo Energi Batubara - Indonesia
- Tata Chemicals Ltd - India
- Australian Commodity Traders Exchange
- Sinarmas Energy and Mining - Indonesia
- Deloitte Consulting - India
- Ind-Barath Power Infra Limited - India
- Sojitz Corporation - Japan
- Bukit Baiduri Energy - Indonesia
- Indian Energy Exchange, India
- San Jose City I Power Corp, Philippines
- Chamber of Mines of South Africa
- Mintek Dendrill Indonesia
- Petron Corporation, Philippines
- Coastal Gujarat Power Limited - India
- GMR Energy Limited - India
- White Energy Company Limited
- Carbofer General Trading SA - India
- Semirara Mining and Power Corporation, Philippines
- Wood Mackenzie - Singapore
- Krishnapatnam Port Company Ltd. - India
- Standard Chartered Bank - UAE
- LBH Netherlands Bv - Netherlands
- Therma Luzon, Inc, Philippines
- Anglo American - United Kingdom
- Thai Mozambique Logistica
- SMG Consultants - Indonesia
- Meralco Power Generation, Philippines
- Planning Commission, India
- Agrawal Coal Company - India
- ICICI Bank Limited - India
- Wilmar Investment Holdings
- Independent Power Producers Association of India
- Romanian Commodities Exchange
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Finance - Indonesia
- Commonwealth Bank - Australia
- IEA Clean Coal Centre - UK
- Thiess Contractors Indonesia
- Bayan Resources Tbk. - Indonesia
- Coalindo Energy - Indonesia
- Tamil Nadu electricity Board
- IHS Mccloskey Coal Group - USA
- TeaM Sual Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Kumho Petrochemical, South Korea
- Indo Tambangraya Megah - Indonesia
- Price Waterhouse Coopers - Russia
- Petrochimia International Co. Ltd.- Taiwan
- Vizag Seaport Private Limited - India
- Samtan Co., Ltd - South Korea
- Karaikal Port Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Interocean Group of Companies - India
- Aditya Birla Group - India
- Manunggal Multi Energi - Indonesia
- Makarim & Taira - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Altura Mining Limited, Indonesia
- Uttam Galva Steels Limited - India
- Directorate Of Revenue Intelligence - India
- Miang Besar Coal Terminal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vedanta Resources Plc - India
- International Coal Ventures Pvt Ltd - India
- CNBM International Corporation - China
- SMC Global Power, Philippines
- Dalmia Cement Bharat India
- Gujarat Electricity Regulatory Commission - India
- Parliament of New Zealand
- GAC Shipping (India) Pvt Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Economic Council, Georgia
- The Treasury - Australian Government
- Siam City Cement PLC, Thailand
- Indonesian Coal Mining Association
- Cigading International Bulk Terminal - Indonesia
- PNOC Exploration Corporation - Philippines
- Georgia Ports Authority, United States
- Savvy Resources Ltd - HongKong
- Chettinad Cement Corporation Ltd - India
- Mjunction Services Limited - India
- Kobexindo Tractors - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indian Oil Corporation Limited
- Orica Mining Services - Indonesia
- Indika Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Essar Steel Hazira Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Sindya Power Generating Company Private Ltd
- Aboitiz Power Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Banpu Public Company Limited - Thailand
- Central Java Power - Indonesia
- Marubeni Corporation - India
- Cement Manufacturers Association - India
- Riau Bara Harum - Indonesia
- Electricity Generating Authority of Thailand
- Rashtriya Ispat Nigam Limited - India
- Intertek Mineral Services - Indonesia
- Grasim Industreis Ltd - India
- Medco Energi Mining Internasional
- ASAPP Information Group - India
- Malabar Cements Ltd - India
- Straits Asia Resources Limited - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Attock Cement Pakistan Limited
- GVK Power & Infra Limited - India
- The University of Queensland
- Star Paper Mills Limited - India
- Merrill Lynch Commodities Europe
- Goldman Sachs - Singapore
- VISA Power Limited - India
- Electricity Authority, New Zealand
- Rio Tinto Coal - Australia
- Metalloyd Limited - United Kingdom
- Energy Link Ltd, New Zealand
- Kartika Selabumi Mining - Indonesia
- Simpson Spence & Young - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Australian Coal Association
- Mercator Lines Limited - India
- Eastern Coal Council - USA
- Ambuja Cements Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Siam City Cement - Thailand
- Global Green Power PLC Corporation, Philippines
- Bhushan Steel Limited - India
- Kepco SPC Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Global Business Power Corporation, Philippines
- Edison Trading Spa - Italy
- Salva Resources Pvt Ltd - India
- Sical Logistics Limited - India
- Barasentosa Lestari - Indonesia
- Borneo Indobara - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- European Bulk Services B.V. - Netherlands
- Holcim Trading Pte Ltd - Singapore
- Baramulti Group, Indonesia
- Binh Thuan Hamico - Vietnam
- McConnell Dowell - Australia
- Maheswari Brothers Coal Limited - India
- Jaiprakash Power Ventures ltd
- Latin American Coal - Colombia
- Indogreen Group - Indonesia
- Parry Sugars Refinery, India
- Ministry of Transport, Egypt
- The State Trading Corporation of India Ltd
- Xindia Steels Limited - India
- Central Electricity Authority - India
- Orica Australia Pty. Ltd.
- Maharashtra Electricity Regulatory Commission - India
- Iligan Light & Power Inc, Philippines
- Africa Commodities Group - South Africa
- MS Steel International - UAE
- Antam Resourcindo - Indonesia
- Trasteel International SA, Italy
- Coal and Oil Company - UAE
- Oldendorff Carriers - Singapore
- Energy Development Corp, Philippines
- India Bulls Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Ministry of Mines - Canada
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sakthi Sugars Limited - India
- Bhoruka Overseas - Indonesia
- Leighton Contractors Pty Ltd - Australia
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