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