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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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Tuesday, 29 September 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.73 PCT - XINHUA
China Taiyuan coal transaction price index stood at 125.91 points Monday, up 0.73 percent week on week.
The index, released by China ...
Tuesday, 29 September 20
SHIPPING MARKET - ALLIED
Here we are, just a short breath before the final quarter of the year, and many are now debating to what extent we can really expect a firm dry bul ...
Tuesday, 29 September 20
INDONESIAN COAL COMPANIES' EARNINGS TO WEAKEN IN 2H20 - FITCH RATINGS
Rated Indonesian coal miners and contractors will have weaker operating and financial performances in the second half of 2020 than in the first, sa ...
Tuesday, 29 September 20
RUSSIA'S COAL PRODUCTION TO DROP BY 10.5% IN 2020, SAYS MINISTRY - TASS
Russia’s Economic Development Ministry projects a 10.5% decrease in coal production in the country in 2020 compared with last year to 395 mln ...
Monday, 28 September 20
NEW LNG PROJECTS - ALL DRESSED UP AND NO PLACE TO GO - WOOD MACKENZIE
It was meant to be another boom year. After a record 70 mmtpa of new LNG capacity was sanctioned in 2019, at least as much capacity was lined up fo ...
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- CNBM International Corporation - China
- Petrochimia International Co. Ltd.- Taiwan
- Bangladesh Power Developement Board
- Australian Commodity Traders Exchange
- Attock Cement Pakistan Limited
- International Coal Ventures Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Chamber of Mines of South Africa
- Renaissance Capital - South Africa
- Planning Commission, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Therma Luzon, Inc, Philippines
- Coal and Oil Company - UAE
- ICICI Bank Limited - India
- Dalmia Cement Bharat India
- Australian Coal Association
- Wood Mackenzie - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kohat Cement Company Ltd. - Pakistan
- Latin American Coal - Colombia
- Rashtriya Ispat Nigam Limited - India
- White Energy Company Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- European Bulk Services B.V. - Netherlands
- Binh Thuan Hamico - Vietnam
- Jaiprakash Power Ventures ltd
- Riau Bara Harum - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Energy Link Ltd, New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Singapore Mercantile Exchange
- Maharashtra Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- Coalindo Energy - Indonesia
- Ambuja Cements Ltd - India
- Commonwealth Bank - Australia
- Grasim Industreis Ltd - India
- Africa Commodities Group - South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Independent Power Producers Association of India
- Samtan Co., Ltd - South Korea
- Indo Tambangraya Megah - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Edison Trading Spa - Italy
- Mercuria Energy - Indonesia
- Savvy Resources Ltd - HongKong
- San Jose City I Power Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Carbofer General Trading SA - India
- Central Electricity Authority - India
- Salva Resources Pvt Ltd - India
- India Bulls Power Limited - India
- Uttam Galva Steels Limited - India
- IEA Clean Coal Centre - UK
- Ministry of Transport, Egypt
- The Treasury - Australian Government
- Holcim Trading Pte Ltd - Singapore
- Sree Jayajothi Cements Limited - India
- Iligan Light & Power Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Eastern Coal Council - USA
- Georgia Ports Authority, United States
- Wilmar Investment Holdings
- Tamil Nadu electricity Board
- Malabar Cements Ltd - India
- SMC Global Power, Philippines
- Ministry of Mines - Canada
- Aditya Birla Group - India
- Bhatia International Limited - India
- Orica Australia Pty. Ltd.
- OPG Power Generation Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Petron Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Kaltim Prima Coal - Indonesia
- Thiess Contractors Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Kobexindo Tractors - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- Kumho Petrochemical, South Korea
- The State Trading Corporation of India Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Goldman Sachs - Singapore
- GMR Energy Limited - India
- Oldendorff Carriers - Singapore
- Sindya Power Generating Company Private Ltd
- Indian Energy Exchange, India
- Indika Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Antam Resourcindo - Indonesia
- Altura Mining Limited, Indonesia
- ASAPP Information Group - India
- Indian Oil Corporation Limited
- Cement Manufacturers Association - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Marubeni Corporation - India
- IHS Mccloskey Coal Group - USA
- Global Coal Blending Company Limited - Australia
- Siam City Cement - Thailand
- Economic Council, Georgia
- Parry Sugars Refinery, India
- Orica Mining Services - Indonesia
- Medco Energi Mining Internasional
- Larsen & Toubro Limited - India
- Baramulti Group, Indonesia
- The University of Queensland
- Price Waterhouse Coopers - Russia
- Timah Investasi Mineral - Indoneisa
- Ind-Barath Power Infra Limited - India
- Indonesian Coal Mining Association
- Barasentosa Lestari - Indonesia
- Central Java Power - Indonesia
- Ministry of Finance - Indonesia
- Rio Tinto Coal - Australia
- Ceylon Electricity Board - Sri Lanka
- TNB Fuel Sdn Bhd - Malaysia
- MS Steel International - UAE
- Electricity Authority, New Zealand
- Indogreen Group - Indonesia
- Meenaskhi Energy Private Limited - India
- Madhucon Powers Ltd - India
- Lanco Infratech Ltd - India
- Tata Chemicals Ltd - India
- Bhoruka Overseas - Indonesia
- PTC India Limited - India
- Heidelberg Cement - Germany
- Bukit Baiduri Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- SMG Consultants - Indonesia
- Bulk Trading Sa - Switzerland
- Makarim & Taira - Indonesia
- Sical Logistics Limited - India
- Meralco Power Generation, Philippines
- Chettinad Cement Corporation Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Xindia Steels Limited - India
- Power Finance Corporation Ltd., India
- Sarangani Energy Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Semirara Mining Corp, Philippines
- London Commodity Brokers - England
- Alfred C Toepfer International GmbH - Germany
- GVK Power & Infra Limited - India
- Gujarat Sidhee Cement - India
- Kapuas Tunggal Persada - Indonesia
- Toyota Tsusho Corporation, Japan
- McConnell Dowell - Australia
- Mjunction Services Limited - India
- Siam City Cement PLC, Thailand
- Global Business Power Corporation, Philippines
- Posco Energy - South Korea
- Vizag Seaport Private Limited - India
- New Zealand Coal & Carbon
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Straits Asia Resources Limited - Singapore
- Simpson Spence & Young - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Standard Chartered Bank - UAE
- Merrill Lynch Commodities Europe
- Aboitiz Power Corporation - Philippines
- Jindal Steel & Power Ltd - India
- Mercator Lines Limited - India
- VISA Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Vedanta Resources Plc - India
- Star Paper Mills Limited - India
- Borneo Indobara - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- LBH Netherlands Bv - Netherlands
- Metalloyd Limited - United Kingdom
- Sinarmas Energy and Mining - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bukit Makmur.PT - Indonesia
- Thai Mozambique Logistica
- Interocean Group of Companies - India
- Bayan Resources Tbk. - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- TeaM Sual Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- Intertek Mineral Services - Indonesia
- South Luzon Thermal Energy Corporation
- Mintek Dendrill Indonesia
- Kideco Jaya Agung - Indonesia
- Kartika Selabumi Mining - Indonesia
- CIMB Investment Bank - Malaysia
- Energy Development Corp, Philippines
- PowerSource Philippines DevCo
- Directorate General of MIneral and Coal - Indonesia
- Sojitz Corporation - Japan
- Maheswari Brothers Coal Limited - India
- Banpu Public Company Limited - Thailand
- Trasteel International SA, Italy
- Parliament of New Zealand
- Agrawal Coal Company - India
- Minerals Council of Australia
- Anglo American - United Kingdom
- Bharathi Cement Corporation - India
- Deloitte Consulting - India
- Manunggal Multi Energi - Indonesia
- Directorate Of Revenue Intelligence - India
- Gujarat Electricity Regulatory Commission - India
- Essar Steel Hazira Ltd - India
- Bhushan Steel Limited - India
- Sakthi Sugars Limited - India
- Videocon Industries ltd - India
- Romanian Commodities Exchange
- Neyveli Lignite Corporation Ltd, - India
- Eastern Energy - Thailand
- PNOC Exploration Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Formosa Plastics Group - Taiwan
- Globalindo Alam Lestari - Indonesia
- Electricity Generating Authority of Thailand
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