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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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Saturday, 05 September 20
INDIA WON'T KICK ITS COAL HABIT SO EASILY - HINDU BUSINESS LINE
India has traditionally considered itself lucky to have been endowed with abundant coal reserves, which it has sought to use to meet its energy nee ...
Saturday, 05 September 20
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Saturday, 05 September 20
POLISH COAL DEMAND EXPECTED TO FALL BY 7 MLN TONNES NEXT YEAR: MINISTER - REUTERS
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Saturday, 05 September 20
PAKISTAN'S NEW 27-YEAR POWER PLAN RISKS LOCKING IN LONG-TERM OVERCAPACITY, LEAVING IMPORTED COAL AND LNG PLANTS STRANDED - IEEFA
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Pakistan risks locking itself into building m ...
Friday, 04 September 20
IN A DEEPENING DEBT HOLE OF $34 BILLION, INDONESIA’S PLN MUST STOP DIGGING - IEEFA
The utility has added IDR100 trillion in debt annually for the last five years
Utilities globally started changing the way they do business ye ...
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- Toyota Tsusho Corporation, Japan
- Dalmia Cement Bharat India
- Carbofer General Trading SA - India
- Coal and Oil Company - UAE
- Billiton Holdings Pty Ltd - Australia
- Petron Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Bharathi Cement Corporation - India
- Gujarat Mineral Development Corp Ltd - India
- Merrill Lynch Commodities Europe
- Meralco Power Generation, Philippines
- Savvy Resources Ltd - HongKong
- Salva Resources Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- New Zealand Coal & Carbon
- Posco Energy - South Korea
- Manunggal Multi Energi - Indonesia
- Intertek Mineral Services - Indonesia
- Wilmar Investment Holdings
- London Commodity Brokers - England
- Goldman Sachs - Singapore
- Baramulti Group, Indonesia
- PTC India Limited - India
- Kapuas Tunggal Persada - Indonesia
- Thiess Contractors Indonesia
- Ind-Barath Power Infra Limited - India
- Banpu Public Company Limited - Thailand
- Bayan Resources Tbk. - Indonesia
- Central Electricity Authority - India
- TNB Fuel Sdn Bhd - Malaysia
- Jaiprakash Power Ventures ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Price Waterhouse Coopers - Russia
- Cigading International Bulk Terminal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Xindia Steels Limited - India
- Parry Sugars Refinery, India
- Ministry of Transport, Egypt
- Indian Energy Exchange, India
- Aditya Birla Group - India
- Electricity Generating Authority of Thailand
- Miang Besar Coal Terminal - Indonesia
- VISA Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Sojitz Corporation - Japan
- Sarangani Energy Corporation, Philippines
- Borneo Indobara - Indonesia
- Port Waratah Coal Services - Australia
- GN Power Mariveles Coal Plant, Philippines
- Riau Bara Harum - Indonesia
- Metalloyd Limited - United Kingdom
- Georgia Ports Authority, United States
- Sinarmas Energy and Mining - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Madhucon Powers Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Chamber of Mines of South Africa
- Agrawal Coal Company - India
- Coastal Gujarat Power Limited - India
- Semirara Mining Corp, Philippines
- ICICI Bank Limited - India
- Mintek Dendrill Indonesia
- Aboitiz Power Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bulk Trading Sa - Switzerland
- Binh Thuan Hamico - Vietnam
- Mercator Lines Limited - India
- Bhushan Steel Limited - India
- LBH Netherlands Bv - Netherlands
- Maheswari Brothers Coal Limited - India
- Globalindo Alam Lestari - Indonesia
- The State Trading Corporation of India Ltd
- Global Green Power PLC Corporation, Philippines
- Uttam Galva Steels Limited - India
- The Treasury - Australian Government
- Bangladesh Power Developement Board
- Pendopo Energi Batubara - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Cement Manufacturers Association - India
- Global Coal Blending Company Limited - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- PowerSource Philippines DevCo
- Parliament of New Zealand
- Mjunction Services Limited - India
- Simpson Spence & Young - Indonesia
- Rio Tinto Coal - Australia
- Kartika Selabumi Mining - Indonesia
- Vizag Seaport Private Limited - India
- McConnell Dowell - Australia
- Kaltim Prima Coal - Indonesia
- Sical Logistics Limited - India
- Iligan Light & Power Inc, Philippines
- Grasim Industreis Ltd - India
- Samtan Co., Ltd - South Korea
- Straits Asia Resources Limited - Singapore
- Lanco Infratech Ltd - India
- Deloitte Consulting - India
- Timah Investasi Mineral - Indoneisa
- White Energy Company Limited
- Krishnapatnam Port Company Ltd. - India
- GAC Shipping (India) Pvt Ltd
- Altura Mining Limited, Indonesia
- Medco Energi Mining Internasional
- TeaM Sual Corporation - Philippines
- Bhatia International Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Africa Commodities Group - South Africa
- Indonesian Coal Mining Association
- Antam Resourcindo - Indonesia
- Siam City Cement PLC, Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Formosa Plastics Group - Taiwan
- Asmin Koalindo Tuhup - Indonesia
- IHS Mccloskey Coal Group - USA
- Bhoruka Overseas - Indonesia
- Kumho Petrochemical, South Korea
- Wood Mackenzie - Singapore
- The University of Queensland
- Minerals Council of Australia
- GMR Energy Limited - India
- Power Finance Corporation Ltd., India
- Indo Tambangraya Megah - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Ambuja Cements Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Malabar Cements Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Independent Power Producers Association of India
- CNBM International Corporation - China
- Coalindo Energy - Indonesia
- Ministry of Mines - Canada
- Meenaskhi Energy Private Limited - India
- Kepco SPC Power Corporation, Philippines
- Economic Council, Georgia
- SMG Consultants - Indonesia
- OPG Power Generation Pvt Ltd - India
- Planning Commission, India
- Directorate Of Revenue Intelligence - India
- Energy Link Ltd, New Zealand
- Sree Jayajothi Cements Limited - India
- Marubeni Corporation - India
- Singapore Mercantile Exchange
- India Bulls Power Limited - India
- Global Business Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Bukit Makmur.PT - Indonesia
- Electricity Authority, New Zealand
- Heidelberg Cement - Germany
- Central Java Power - Indonesia
- Orica Mining Services - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Romanian Commodities Exchange
- Interocean Group of Companies - India
- Kohat Cement Company Ltd. - Pakistan
- Tamil Nadu electricity Board
- Thai Mozambique Logistica
- Ceylon Electricity Board - Sri Lanka
- Essar Steel Hazira Ltd - India
- Australian Coal Association
- Trasteel International SA, Italy
- SMC Global Power, Philippines
- Indogreen Group - Indonesia
- Gujarat Sidhee Cement - India
- ASAPP Information Group - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Leighton Contractors Pty Ltd - Australia
- Indika Energy - Indonesia
- Videocon Industries ltd - India
- Star Paper Mills Limited - India
- European Bulk Services B.V. - Netherlands
- Oldendorff Carriers - Singapore
- Bukit Baiduri Energy - Indonesia
- Anglo American - United Kingdom
- MS Steel International - UAE
- Eastern Coal Council - USA
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Renaissance Capital - South Africa
- South Luzon Thermal Energy Corporation
- Energy Development Corp, Philippines
- Australian Commodity Traders Exchange
- Edison Trading Spa - Italy
- Standard Chartered Bank - UAE
- Kideco Jaya Agung - Indonesia
- Ministry of Finance - Indonesia
- Barasentosa Lestari - Indonesia
- Eastern Energy - Thailand
- SN Aboitiz Power Inc, Philippines
- Indian Oil Corporation Limited
- Jindal Steel & Power Ltd - India
- Orica Australia Pty. Ltd.
- CIMB Investment Bank - Malaysia
- Neyveli Lignite Corporation Ltd, - India
- Maharashtra Electricity Regulatory Commission - India
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Electricity Regulatory Commission - India
- Attock Cement Pakistan Limited
- Makarim & Taira - Indonesia
- Chettinad Cement Corporation Ltd - India
- PNOC Exploration Corporation - Philippines
- Siam City Cement - Thailand
- Sakthi Sugars Limited - India
- Larsen & Toubro Limited - India
- GVK Power & Infra Limited - India
- Commonwealth Bank - Australia
- Vedanta Resources Plc - India
- Petrochimia International Co. Ltd.- Taiwan
- San Jose City I Power Corp, Philippines
- Latin American Coal - Colombia
- International Coal Ventures Pvt Ltd - India
- Mercuria Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- IEA Clean Coal Centre - UK
- Dong Bac Coal Mineral Investment Coporation - Vietnam
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