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