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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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Thursday, 05 November 20
THE INDONESIA COAL PRICE REFERENCE RISES FOR SECOND CONSECUTIVE MONTH
COALspot.com: The Indonesia Coal Price Reference rose for a 2nd month by 9.24% month on month. The Indonesia Coal Price Reference for the month of ...
Wednesday, 04 November 20
PHILIPPINES COAL MORATORIUM HIGHLIGHTS DRAMATIC PIVOT TO RENEWABLE ENERGY INVESTMENT FOR LOWER PRICES AND POWER SYSTEM RESILIENCE - IEEFA
Policymakers and industry leaders ready to embrace new energy technologies
The Department of Energy’s call for a moratorium on ...
Wednesday, 04 November 20
FOREIGN INVESTORS FACE TOUGH TIMES CLOSING VIETNAM’S REMAINING COAL POWER DEALS - IEEFA
Project bankability at risk as new regulations threaten usual contractual terms
Foreign investors will face higher-than-usual risks ...
Wednesday, 04 November 20
MARKET INSIGHT - INTERMODAL
As the end of the year approaches, one would definitely notice that the newbuilding orderbook for bulk carriers is significantly smaller compared t ...
Monday, 02 November 20
PHILIPPINES GOVERNMENT SAYS NO TO NEW COAL PLANT PROPOSALS - IEEFA | 24 PILIPINAS
The Duterte administration will no longer accept proposals to construct new coal power plants, a dramatic shift in energy policy that counts on dec ...
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- Bukit Asam (Persero) Tbk - Indonesia
- Metalloyd Limited - United Kingdom
- Carbofer General Trading SA - India
- AsiaOL BioFuels Corp., Philippines
- Banpu Public Company Limited - Thailand
- Minerals Council of Australia
- GMR Energy Limited - India
- VISA Power Limited - India
- Cement Manufacturers Association - India
- Indian Energy Exchange, India
- San Jose City I Power Corp, Philippines
- Independent Power Producers Association of India
- IHS Mccloskey Coal Group - USA
- Bulk Trading Sa - Switzerland
- Petrochimia International Co. Ltd.- Taiwan
- Intertek Mineral Services - Indonesia
- Commonwealth Bank - Australia
- Anglo American - United Kingdom
- SMG Consultants - Indonesia
- Merrill Lynch Commodities Europe
- Parliament of New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- McConnell Dowell - Australia
- Deloitte Consulting - India
- Vijayanagar Sugar Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Billiton Holdings Pty Ltd - Australia
- Neyveli Lignite Corporation Ltd, - India
- Energy Link Ltd, New Zealand
- Energy Development Corp, Philippines
- Dalmia Cement Bharat India
- White Energy Company Limited
- Vedanta Resources Plc - India
- Semirara Mining Corp, Philippines
- The University of Queensland
- Standard Chartered Bank - UAE
- Economic Council, Georgia
- Orica Australia Pty. Ltd.
- Chamber of Mines of South Africa
- ASAPP Information Group - India
- GAC Shipping (India) Pvt Ltd
- Kartika Selabumi Mining - Indonesia
- Altura Mining Limited, Indonesia
- Australian Commodity Traders Exchange
- Gujarat Electricity Regulatory Commission - India
- Baramulti Group, Indonesia
- Pendopo Energi Batubara - Indonesia
- Formosa Plastics Group - Taiwan
- Mercuria Energy - Indonesia
- Agrawal Coal Company - India
- Goldman Sachs - Singapore
- OPG Power Generation Pvt Ltd - India
- Global Business Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Makarim & Taira - Indonesia
- The Treasury - Australian Government
- Malabar Cements Ltd - India
- International Coal Ventures Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Larsen & Toubro Limited - India
- MS Steel International - UAE
- Uttam Galva Steels Limited - India
- Antam Resourcindo - Indonesia
- Georgia Ports Authority, United States
- Eastern Coal Council - USA
- Eastern Energy - Thailand
- European Bulk Services B.V. - Netherlands
- CIMB Investment Bank - Malaysia
- Sarangani Energy Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Mercator Lines Limited - India
- Marubeni Corporation - India
- Orica Mining Services - Indonesia
- Aboitiz Power Corporation - Philippines
- Wilmar Investment Holdings
- Ceylon Electricity Board - Sri Lanka
- Coal and Oil Company - UAE
- Renaissance Capital - South Africa
- Price Waterhouse Coopers - Russia
- Kapuas Tunggal Persada - Indonesia
- LBH Netherlands Bv - Netherlands
- Port Waratah Coal Services - Australia
- Timah Investasi Mineral - Indoneisa
- Bhoruka Overseas - Indonesia
- Barasentosa Lestari - Indonesia
- Directorate Of Revenue Intelligence - India
- Salva Resources Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Bukit Makmur.PT - Indonesia
- Petron Corporation, Philippines
- CNBM International Corporation - China
- Ministry of Mines - Canada
- Straits Asia Resources Limited - Singapore
- Therma Luzon, Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Latin American Coal - Colombia
- Alfred C Toepfer International GmbH - Germany
- Kobexindo Tractors - Indoneisa
- Samtan Co., Ltd - South Korea
- Holcim Trading Pte Ltd - Singapore
- Parry Sugars Refinery, India
- Mintek Dendrill Indonesia
- The State Trading Corporation of India Ltd
- Tamil Nadu electricity Board
- Sical Logistics Limited - India
- Vizag Seaport Private Limited - India
- Kepco SPC Power Corporation, Philippines
- Ministry of Transport, Egypt
- Chettinad Cement Corporation Ltd - India
- Electricity Authority, New Zealand
- Central Electricity Authority - India
- Kalimantan Lumbung Energi - Indonesia
- TeaM Sual Corporation - Philippines
- Savvy Resources Ltd - HongKong
- Coalindo Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Sidhee Cement - India
- TNB Fuel Sdn Bhd - Malaysia
- Romanian Commodities Exchange
- Posco Energy - South Korea
- Cigading International Bulk Terminal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Interocean Group of Companies - India
- Riau Bara Harum - Indonesia
- Kaltim Prima Coal - Indonesia
- Indika Energy - Indonesia
- Xindia Steels Limited - India
- Edison Trading Spa - Italy
- PTC India Limited - India
- Bhatia International Limited - India
- Madhucon Powers Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Oldendorff Carriers - Singapore
- Kumho Petrochemical, South Korea
- Kohat Cement Company Ltd. - Pakistan
- Sakthi Sugars Limited - India
- Lanco Infratech Ltd - India
- Maheswari Brothers Coal Limited - India
- Indian Oil Corporation Limited
- Singapore Mercantile Exchange
- Australian Coal Association
- Borneo Indobara - Indonesia
- Global Green Power PLC Corporation, Philippines
- Grasim Industreis Ltd - India
- Kideco Jaya Agung - Indonesia
- Sojitz Corporation - Japan
- Indo Tambangraya Megah - Indonesia
- ICICI Bank Limited - India
- Electricity Generating Authority of Thailand
- Africa Commodities Group - South Africa
- Gujarat Mineral Development Corp Ltd - India
- Power Finance Corporation Ltd., India
- Indonesian Coal Mining Association
- Planning Commission, India
- Bayan Resources Tbk. - Indonesia
- Thiess Contractors Indonesia
- India Bulls Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- Aditya Birla Group - India
- Iligan Light & Power Inc, Philippines
- Coastal Gujarat Power Limited - India
- New Zealand Coal & Carbon
- Star Paper Mills Limited - India
- London Commodity Brokers - England
- Medco Energi Mining Internasional
- PowerSource Philippines DevCo
- Sree Jayajothi Cements Limited - India
- Bangladesh Power Developement Board
- SN Aboitiz Power Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Siam City Cement - Thailand
- PNOC Exploration Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Rio Tinto Coal - Australia
- Indogreen Group - Indonesia
- Heidelberg Cement - Germany
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mjunction Services Limited - India
- Wood Mackenzie - Singapore
- Manunggal Multi Energi - Indonesia
- Sindya Power Generating Company Private Ltd
- Trasteel International SA, Italy
- Ministry of Finance - Indonesia
- SMC Global Power, Philippines
- Simpson Spence & Young - Indonesia
- Meenaskhi Energy Private Limited - India
- Videocon Industries ltd - India
- Global Coal Blending Company Limited - Australia
- Bharathi Cement Corporation - India
- Siam City Cement PLC, Thailand
- IEA Clean Coal Centre - UK
- Bahari Cakrawala Sebuku - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Tata Chemicals Ltd - India
- Ambuja Cements Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Meralco Power Generation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Essar Steel Hazira Ltd - India
- Thai Mozambique Logistica
- Bhushan Steel Limited - India
- Semirara Mining and Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Jaiprakash Power Ventures ltd
- Sinarmas Energy and Mining - Indonesia
- Karaikal Port Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Jorong Barutama Greston.PT - Indonesia
- Jindal Steel & Power Ltd - India
- Ind-Barath Power Infra Limited - India
- Central Java Power - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Attock Cement Pakistan Limited
- GVK Power & Infra Limited - India
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