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