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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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Sunday, 01 November 20
GRADUAL RECOVERY FOR INDONESIAN COAL FROM 4Q20; RISKS REMAIN - FITCH RATINGS
Fitch Ratings expects the credit metrics of Indonesian coal miners and coal contractors to improve from 4Q20 with the recovery in volumes and price ...
Wednesday, 28 October 20
BIODIESEL - NEW FUELS, NEW CHALLENGES - GARD | DNV GL
KNOWLEDGE TO ELEVATE
One of numerous possible ways to comply with the IMO’s strategy on the reduction of greenhouse gas (GHG) emissions ...
Wednesday, 28 October 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.35 PCT - XINHUA
China Taiyuan coal transaction price index stood at 127.94 points Monday, up 0.35 percent week on week.
The index, released by China ...
Wednesday, 28 October 20
MARKET INSIGHT - INTERMODAL
The global strive towards eco-friendliness and environmental sustainability in the shipping industry is mounting. There are currently almost 200 co ...
Tuesday, 27 October 20
PLN STILL REFUSING TO ADAPT, A MOVE WHICH WILL HURT INVESTORS, CONSUMERS, AND THE GOVERNMENT PURSE - IEEFA
Utility’s latest planning report locks PLN into the past
PLN would be better served restructuring its business to address the current en ...
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- Electricity Generating Authority of Thailand
- London Commodity Brokers - England
- CNBM International Corporation - China
- Grasim Industreis Ltd - India
- Bhushan Steel Limited - India
- Posco Energy - South Korea
- Coastal Gujarat Power Limited - India
- Australian Coal Association
- Maheswari Brothers Coal Limited - India
- PetroVietnam Power Coal Import and Supply Company
- MS Steel International - UAE
- Sarangani Energy Corporation, Philippines
- Port Waratah Coal Services - Australia
- Ministry of Finance - Indonesia
- Independent Power Producers Association of India
- Bukit Baiduri Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Formosa Plastics Group - Taiwan
- Maharashtra Electricity Regulatory Commission - India
- Thai Mozambique Logistica
- Oldendorff Carriers - Singapore
- Price Waterhouse Coopers - Russia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Metalloyd Limited - United Kingdom
- VISA Power Limited - India
- Gujarat Sidhee Cement - India
- Global Coal Blending Company Limited - Australia
- Baramulti Group, Indonesia
- Medco Energi Mining Internasional
- Dalmia Cement Bharat India
- Holcim Trading Pte Ltd - Singapore
- Rashtriya Ispat Nigam Limited - India
- Altura Mining Limited, Indonesia
- Karaikal Port Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Savvy Resources Ltd - HongKong
- SMG Consultants - Indonesia
- Siam City Cement PLC, Thailand
- Mjunction Services Limited - India
- Sojitz Corporation - Japan
- GN Power Mariveles Coal Plant, Philippines
- Timah Investasi Mineral - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- The University of Queensland
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Siam City Cement - Thailand
- OPG Power Generation Pvt Ltd - India
- White Energy Company Limited
- Jaiprakash Power Ventures ltd
- McConnell Dowell - Australia
- Rio Tinto Coal - Australia
- Energy Link Ltd, New Zealand
- Parliament of New Zealand
- Commonwealth Bank - Australia
- Simpson Spence & Young - Indonesia
- Uttam Galva Steels Limited - India
- Iligan Light & Power Inc, Philippines
- Merrill Lynch Commodities Europe
- Orica Mining Services - Indonesia
- San Jose City I Power Corp, Philippines
- Cement Manufacturers Association - India
- Borneo Indobara - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ambuja Cements Ltd - India
- Interocean Group of Companies - India
- Bhatia International Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Barasentosa Lestari - Indonesia
- Economic Council, Georgia
- Power Finance Corporation Ltd., India
- Krishnapatnam Port Company Ltd. - India
- Samtan Co., Ltd - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Ind-Barath Power Infra Limited - India
- Tata Chemicals Ltd - India
- PNOC Exploration Corporation - Philippines
- Indonesian Coal Mining Association
- Semirara Mining Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Singapore Mercantile Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jorong Barutama Greston.PT - Indonesia
- Vizag Seaport Private Limited - India
- Indian Oil Corporation Limited
- The Treasury - Australian Government
- Riau Bara Harum - Indonesia
- Sical Logistics Limited - India
- Kapuas Tunggal Persada - Indonesia
- Heidelberg Cement - Germany
- Parry Sugars Refinery, India
- Therma Luzon, Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Central Java Power - Indonesia
- Jindal Steel & Power Ltd - India
- ASAPP Information Group - India
- Latin American Coal - Colombia
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Makmur.PT - Indonesia
- PTC India Limited - India
- Kobexindo Tractors - Indoneisa
- Australian Commodity Traders Exchange
- Standard Chartered Bank - UAE
- Chamber of Mines of South Africa
- Global Green Power PLC Corporation, Philippines
- New Zealand Coal & Carbon
- Leighton Contractors Pty Ltd - Australia
- Banpu Public Company Limited - Thailand
- Indogreen Group - Indonesia
- Attock Cement Pakistan Limited
- Indian Energy Exchange, India
- Minerals Council of Australia
- South Luzon Thermal Energy Corporation
- Thiess Contractors Indonesia
- Coal and Oil Company - UAE
- Sree Jayajothi Cements Limited - India
- CIMB Investment Bank - Malaysia
- Globalindo Alam Lestari - Indonesia
- Straits Asia Resources Limited - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Bhoruka Overseas - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Energy Development Corp, Philippines
- TeaM Sual Corporation - Philippines
- SN Aboitiz Power Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Mineral Development Corp Ltd - India
- Madhucon Powers Ltd - India
- Planning Commission, India
- Kaltim Prima Coal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Aboitiz Power Corporation - Philippines
- Mercator Lines Limited - India
- IHS Mccloskey Coal Group - USA
- Lanco Infratech Ltd - India
- Kumho Petrochemical, South Korea
- Sinarmas Energy and Mining - Indonesia
- Coalindo Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Bharathi Cement Corporation - India
- Romanian Commodities Exchange
- Carbofer General Trading SA - India
- Georgia Ports Authority, United States
- Sindya Power Generating Company Private Ltd
- Toyota Tsusho Corporation, Japan
- Vijayanagar Sugar Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- European Bulk Services B.V. - Netherlands
- Petron Corporation, Philippines
- Malabar Cements Ltd - India
- Trasteel International SA, Italy
- Mintek Dendrill Indonesia
- GMR Energy Limited - India
- Tamil Nadu electricity Board
- Asmin Koalindo Tuhup - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Antam Resourcindo - Indonesia
- Edison Trading Spa - Italy
- Xindia Steels Limited - India
- India Bulls Power Limited - India
- Videocon Industries ltd - India
- Eastern Coal Council - USA
- Bulk Trading Sa - Switzerland
- ICICI Bank Limited - India
- Ministry of Transport, Egypt
- Agrawal Coal Company - India
- Essar Steel Hazira Ltd - India
- Deloitte Consulting - India
- Bahari Cakrawala Sebuku - Indonesia
- Central Electricity Authority - India
- Goldman Sachs - Singapore
- Chettinad Cement Corporation Ltd - India
- Star Paper Mills Limited - India
- Anglo American - United Kingdom
- Eastern Energy - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PowerSource Philippines DevCo
- Mercuria Energy - Indonesia
- Marubeni Corporation - India
- Bukit Asam (Persero) Tbk - Indonesia
- Indo Tambangraya Megah - Indonesia
- Aditya Birla Group - India
- The State Trading Corporation of India Ltd
- Africa Commodities Group - South Africa
- Intertek Mineral Services - Indonesia
- Meralco Power Generation, Philippines
- Manunggal Multi Energi - Indonesia
- Global Business Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Electricity Authority, New Zealand
- Meenaskhi Energy Private Limited - India
- Bangladesh Power Developement Board
- Kartika Selabumi Mining - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Renaissance Capital - South Africa
- Vedanta Resources Plc - India
- Ceylon Electricity Board - Sri Lanka
- SMC Global Power, Philippines
- Orica Australia Pty. Ltd.
- Sakthi Sugars Limited - India
- Indika Energy - Indonesia
- Wilmar Investment Holdings
- Binh Thuan Hamico - Vietnam
- IEA Clean Coal Centre - UK
- GVK Power & Infra Limited - India
- Makarim & Taira - Indonesia
- Salva Resources Pvt Ltd - India
- Ministry of Mines - Canada
- Kideco Jaya Agung - Indonesia
- Wood Mackenzie - Singapore
- Directorate Of Revenue Intelligence - India
- Larsen & Toubro Limited - India
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