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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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Friday, 18 September 20
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - XINHUA
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Thursday, 17 September 20
LAST HOPES FOR DEMAND GROWTH SET TO DISAPPOINT THERMAL COAL EXPORTERS - IEEFA
Asian thermal coal exporters are fighting an uphill battle even in new markets
The world’s largest thermal coal exporter is eyeing new m ...
Wednesday, 16 September 20
MARKET INSIGHT - INTERMODAL
Another active week in terms of SnP has concluded in the dry bulk market with a diversified array of transactions recorded. Despite the correction ...
Friday, 11 September 20
IMO 2020: A REVIEW OF THE TRANSITION TO VLSFOS - GARD
KNOWLEDGE TO ELEVATE
Many predictions were made in the run up to the imposition of the MARPOL 2020 sulphur cap, none of which was that the tra ...
Thursday, 10 September 20
U.S. COAL PRODUCTION IN 2020 TO BE 511 MMST, 28 PER CENT LOWER THAN IN 2019 - EIA
EIA expects total U.S. coal production in 2020 to be 511 million short tons (MMst), 194 MMst (28%) lower than in 2019. Mitigation efforts related t ...
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- Petron Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Videocon Industries ltd - India
- Therma Luzon, Inc, Philippines
- Ambuja Cements Ltd - India
- Coalindo Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Dalmia Cement Bharat India
- PNOC Exploration Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Kobexindo Tractors - Indoneisa
- Ceylon Electricity Board - Sri Lanka
- Economic Council, Georgia
- Vedanta Resources Plc - India
- Commonwealth Bank - Australia
- Wood Mackenzie - Singapore
- Minerals Council of Australia
- Attock Cement Pakistan Limited
- Globalindo Alam Lestari - Indonesia
- Central Java Power - Indonesia
- Ministry of Finance - Indonesia
- Indian Energy Exchange, India
- Uttam Galva Steels Limited - India
- Parry Sugars Refinery, India
- Bhushan Steel Limited - India
- Sojitz Corporation - Japan
- Rashtriya Ispat Nigam Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Madhucon Powers Ltd - India
- Bulk Trading Sa - Switzerland
- Agrawal Coal Company - India
- Oldendorff Carriers - Singapore
- Semirara Mining and Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Energy Development Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Posco Energy - South Korea
- Medco Energi Mining Internasional
- Alfred C Toepfer International GmbH - Germany
- Sindya Power Generating Company Private Ltd
- Ind-Barath Power Infra Limited - India
- AsiaOL BioFuels Corp., Philippines
- Ministry of Mines - Canada
- Jindal Steel & Power Ltd - India
- Latin American Coal - Colombia
- Global Business Power Corporation, Philippines
- Thai Mozambique Logistica
- Aboitiz Power Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- Thiess Contractors Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Aditya Birla Group - India
- European Bulk Services B.V. - Netherlands
- Cigading International Bulk Terminal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Indika Energy - Indonesia
- Mercator Lines Limited - India
- London Commodity Brokers - England
- Wilmar Investment Holdings
- Goldman Sachs - Singapore
- McConnell Dowell - Australia
- Karbindo Abesyapradhi - Indoneisa
- Siam City Cement - Thailand
- Kalimantan Lumbung Energi - Indonesia
- Planning Commission, India
- Straits Asia Resources Limited - Singapore
- India Bulls Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Parliament of New Zealand
- Essar Steel Hazira Ltd - India
- Salva Resources Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- MS Steel International - UAE
- Port Waratah Coal Services - Australia
- The University of Queensland
- Mjunction Services Limited - India
- Semirara Mining Corp, Philippines
- Kepco SPC Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- GMR Energy Limited - India
- Binh Thuan Hamico - Vietnam
- Timah Investasi Mineral - Indoneisa
- ICICI Bank Limited - India
- Xindia Steels Limited - India
- Sarangani Energy Corporation, Philippines
- Standard Chartered Bank - UAE
- Borneo Indobara - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Formosa Plastics Group - Taiwan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Metalloyd Limited - United Kingdom
- Orica Mining Services - Indonesia
- Pendopo Energi Batubara - Indonesia
- GVK Power & Infra Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Eastern Energy - Thailand
- Bukit Makmur.PT - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Holcim Trading Pte Ltd - Singapore
- Marubeni Corporation - India
- Edison Trading Spa - Italy
- GN Power Mariveles Coal Plant, Philippines
- Sree Jayajothi Cements Limited - India
- Altura Mining Limited, Indonesia
- Sical Logistics Limited - India
- Leighton Contractors Pty Ltd - Australia
- Kumho Petrochemical, South Korea
- Riau Bara Harum - Indonesia
- Bhatia International Limited - India
- Australian Coal Association
- Africa Commodities Group - South Africa
- Jaiprakash Power Ventures ltd
- Kideco Jaya Agung - Indonesia
- Karaikal Port Pvt Ltd - India
- Rio Tinto Coal - Australia
- TeaM Sual Corporation - Philippines
- The State Trading Corporation of India Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- PetroVietnam Power Coal Import and Supply Company
- Anglo American - United Kingdom
- Makarim & Taira - Indonesia
- Mintek Dendrill Indonesia
- Antam Resourcindo - Indonesia
- Deloitte Consulting - India
- Sinarmas Energy and Mining - Indonesia
- Directorate Of Revenue Intelligence - India
- Barasentosa Lestari - Indonesia
- Siam City Cement PLC, Thailand
- Cement Manufacturers Association - India
- Pipit Mutiara Jaya. PT, Indonesia
- Indian Oil Corporation Limited
- Bangladesh Power Developement Board
- Samtan Co., Ltd - South Korea
- Global Green Power PLC Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Savvy Resources Ltd - HongKong
- Indonesian Coal Mining Association
- Independent Power Producers Association of India
- Trasteel International SA, Italy
- Eastern Coal Council - USA
- Coal and Oil Company - UAE
- New Zealand Coal & Carbon
- Bharathi Cement Corporation - India
- Indogreen Group - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Georgia Ports Authority, United States
- CNBM International Corporation - China
- SMG Consultants - Indonesia
- Sakthi Sugars Limited - India
- Manunggal Multi Energi - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Renaissance Capital - South Africa
- Ministry of Transport, Egypt
- Bhoruka Overseas - Indonesia
- Larsen & Toubro Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Electricity Authority, New Zealand
- Interocean Group of Companies - India
- International Coal Ventures Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Chettinad Cement Corporation Ltd - India
- Carbofer General Trading SA - India
- Vizag Seaport Private Limited - India
- Grasim Industreis Ltd - India
- Bayan Resources Tbk. - Indonesia
- Kartika Selabumi Mining - Indonesia
- Tamil Nadu electricity Board
- Price Waterhouse Coopers - Russia
- Malabar Cements Ltd - India
- Australian Commodity Traders Exchange
- Baramulti Group, Indonesia
- White Energy Company Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Banpu Public Company Limited - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- PowerSource Philippines DevCo
- Central Electricity Authority - India
- Simpson Spence & Young - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Meralco Power Generation, Philippines
- Kapuas Tunggal Persada - Indonesia
- The Treasury - Australian Government
- GAC Shipping (India) Pvt Ltd
- PTC India Limited - India
- ASAPP Information Group - India
- Heidelberg Cement - Germany
- Neyveli Lignite Corporation Ltd, - India
- IHS Mccloskey Coal Group - USA
- Lanco Infratech Ltd - India
- Energy Link Ltd, New Zealand
- SMC Global Power, Philippines
- Merrill Lynch Commodities Europe
- Electricity Generating Authority of Thailand
- Orica Australia Pty. Ltd.
- Intertek Mineral Services - Indonesia
- Singapore Mercantile Exchange
- Power Finance Corporation Ltd., India
- IEA Clean Coal Centre - UK
- Star Paper Mills Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Mercuria Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Romanian Commodities Exchange
- Coastal Gujarat Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Chamber of Mines of South Africa
- Gujarat Sidhee Cement - India
- VISA Power Limited - India
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