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