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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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Wednesday, 07 October 20
MARKET INSIGHT - INTERMODAL
The challenges brought forward in 2020 proved to be very different from what we could have ever imagined. Together with placing a significant strai ...
Tuesday, 06 October 20
KOSPO TO IMPORT 80,000 MT OF 3,800 NCV COAL FOR 2H NOV
COALspot.com: Korea Southern Power Co., Ltd. (KOSPO) has issued an International tender for 80,000 MT Min.3800 kcal/kg NCV coal 2H November, 2020 l ...
Friday, 02 October 20
THE INDONESIA COAL PRICE REFERENCE RISE AFTER HISTORIC CRASH TO US$ 49.42
COALspot.com: The Indonesia Coal Price Reference for the month of October Rise to US$ 51.00 after historic crash to US$ 49.42 in September 2020.
...
Friday, 02 October 20
SRI LANKA MUST LEARN LESSONS FROM AROUND ASIA TO AVOID FURTHER ELECTRICITY CRISES - IEEFA
Overcommitment to fossil-fuelled power generation is leading to excess capacity and rising capacity payments, subsidies, and tariffs around the con ...
Wednesday, 30 September 20
MARKET INSIGHT - INTERMODAL
Spot rates for Capesize bulk carriers received a significant boost last week, however, there are certain reservations in the market regarding the p ...
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- Rio Tinto Coal - Australia
- Barasentosa Lestari - Indonesia
- Kaltim Prima Coal - Indonesia
- Bhatia International Limited - India
- Altura Mining Limited, Indonesia
- Gujarat Sidhee Cement - India
- Ambuja Cements Ltd - India
- Gujarat Electricity Regulatory Commission - India
- CNBM International Corporation - China
- Bukit Baiduri Energy - Indonesia
- Tamil Nadu electricity Board
- Bayan Resources Tbk. - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Tata Chemicals Ltd - India
- Electricity Authority, New Zealand
- Chettinad Cement Corporation Ltd - India
- Aboitiz Power Corporation - Philippines
- Uttam Galva Steels Limited - India
- AsiaOL BioFuels Corp., Philippines
- Essar Steel Hazira Ltd - India
- Eastern Energy - Thailand
- Kumho Petrochemical, South Korea
- GN Power Mariveles Coal Plant, Philippines
- Goldman Sachs - Singapore
- Edison Trading Spa - Italy
- Indian Oil Corporation Limited
- Central Electricity Authority - India
- Eastern Coal Council - USA
- Thiess Contractors Indonesia
- TeaM Sual Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- Indonesian Coal Mining Association
- Ind-Barath Power Infra Limited - India
- Larsen & Toubro Limited - India
- VISA Power Limited - India
- Sindya Power Generating Company Private Ltd
- Orica Mining Services - Indonesia
- Sical Logistics Limited - India
- Intertek Mineral Services - Indonesia
- International Coal Ventures Pvt Ltd - India
- Ministry of Mines - Canada
- Mjunction Services Limited - India
- Savvy Resources Ltd - HongKong
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Commonwealth Bank - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Cement Manufacturers Association - India
- Gujarat Mineral Development Corp Ltd - India
- PNOC Exploration Corporation - Philippines
- Simpson Spence & Young - Indonesia
- Pendopo Energi Batubara - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sojitz Corporation - Japan
- Karbindo Abesyapradhi - Indoneisa
- Bhoruka Overseas - Indonesia
- Therma Luzon, Inc, Philippines
- Coastal Gujarat Power Limited - India
- Parry Sugars Refinery, India
- South Luzon Thermal Energy Corporation
- Renaissance Capital - South Africa
- Jaiprakash Power Ventures ltd
- Bhushan Steel Limited - India
- London Commodity Brokers - England
- Electricity Generating Authority of Thailand
- Parliament of New Zealand
- Minerals Council of Australia
- Coal and Oil Company - UAE
- Attock Cement Pakistan Limited
- Oldendorff Carriers - Singapore
- Ministry of Transport, Egypt
- Ministry of Finance - Indonesia
- Directorate Of Revenue Intelligence - India
- Riau Bara Harum - Indonesia
- Makarim & Taira - Indonesia
- Global Coal Blending Company Limited - Australia
- Posco Energy - South Korea
- Videocon Industries ltd - India
- Billiton Holdings Pty Ltd - Australia
- Australian Coal Association
- Siam City Cement PLC, Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Energy Development Corp, Philippines
- Samtan Co., Ltd - South Korea
- Bukit Makmur.PT - Indonesia
- ASAPP Information Group - India
- Salva Resources Pvt Ltd - India
- Petron Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Africa Commodities Group - South Africa
- Indika Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Semirara Mining and Power Corporation, Philippines
- Bangladesh Power Developement Board
- Standard Chartered Bank - UAE
- Rashtriya Ispat Nigam Limited - India
- Australian Commodity Traders Exchange
- San Jose City I Power Corp, Philippines
- Madhucon Powers Ltd - India
- PTC India Limited - India
- Indian Energy Exchange, India
- Holcim Trading Pte Ltd - Singapore
- MS Steel International - UAE
- Carbofer General Trading SA - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Deloitte Consulting - India
- TNB Fuel Sdn Bhd - Malaysia
- Heidelberg Cement - Germany
- Borneo Indobara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kepco SPC Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Orica Australia Pty. Ltd.
- Wood Mackenzie - Singapore
- GMR Energy Limited - India
- Sinarmas Energy and Mining - Indonesia
- Interocean Group of Companies - India
- Planning Commission, India
- SMG Consultants - Indonesia
- Siam City Cement - Thailand
- Timah Investasi Mineral - Indoneisa
- Power Finance Corporation Ltd., India
- Kohat Cement Company Ltd. - Pakistan
- India Bulls Power Limited - India
- Banpu Public Company Limited - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Central Java Power - Indonesia
- European Bulk Services B.V. - Netherlands
- Lanco Infratech Ltd - India
- Star Paper Mills Limited - India
- Miang Besar Coal Terminal - Indonesia
- Meenaskhi Energy Private Limited - India
- Independent Power Producers Association of India
- Chamber of Mines of South Africa
- Port Waratah Coal Services - Australia
- Sree Jayajothi Cements Limited - India
- Price Waterhouse Coopers - Russia
- Alfred C Toepfer International GmbH - Germany
- Latin American Coal - Colombia
- Georgia Ports Authority, United States
- Grasim Industreis Ltd - India
- OPG Power Generation Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- The State Trading Corporation of India Ltd
- Vizag Seaport Private Limited - India
- IHS Mccloskey Coal Group - USA
- Global Green Power PLC Corporation, Philippines
- SMC Global Power, Philippines
- Krishnapatnam Port Company Ltd. - India
- Energy Link Ltd, New Zealand
- IEA Clean Coal Centre - UK
- The University of Queensland
- Iligan Light & Power Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Baramulti Group, Indonesia
- McConnell Dowell - Australia
- Trasteel International SA, Italy
- Medco Energi Mining Internasional
- Romanian Commodities Exchange
- Karaikal Port Pvt Ltd - India
- Aditya Birla Group - India
- Anglo American - United Kingdom
- Thai Mozambique Logistica
- ICICI Bank Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Economic Council, Georgia
- Sarangani Energy Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Asam (Persero) Tbk - Indonesia
- GAC Shipping (India) Pvt Ltd
- Cigading International Bulk Terminal - Indonesia
- Meralco Power Generation, Philippines
- Kideco Jaya Agung - Indonesia
- Mercator Lines Limited - India
- Indo Tambangraya Megah - Indonesia
- Sakthi Sugars Limited - India
- The Treasury - Australian Government
- Antam Resourcindo - Indonesia
- LBH Netherlands Bv - Netherlands
- Merrill Lynch Commodities Europe
- White Energy Company Limited
- Dalmia Cement Bharat India
- Agrawal Coal Company - India
- Mercuria Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Straits Asia Resources Limited - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Kobexindo Tractors - Indoneisa
- New Zealand Coal & Carbon
- Maharashtra Electricity Regulatory Commission - India
- Mintek Dendrill Indonesia
- Coalindo Energy - Indonesia
- Semirara Mining Corp, Philippines
- Bharathi Cement Corporation - India
- Jindal Steel & Power Ltd - India
- Wilmar Investment Holdings
- Kartika Selabumi Mining - Indonesia
- Vedanta Resources Plc - India
- GVK Power & Infra Limited - India
- Metalloyd Limited - United Kingdom
- PowerSource Philippines DevCo
- Malabar Cements Ltd - India
- Xindia Steels Limited - India
- Indogreen Group - Indonesia
- Global Business Power Corporation, Philippines
- Singapore Mercantile Exchange
- Marubeni Corporation - India
- Globalindo Alam Lestari - Indonesia
- Maheswari Brothers Coal Limited - India
- Formosa Plastics Group - Taiwan
- Jorong Barutama Greston.PT - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
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