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