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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, 14 November 23
CHINA'S BELT AND ROAD INITIATIVE TURNS AWAY FROM COAL - WOOD MACKENZIE
Ambitious, contentious and big spending, China’s Belt and Road Initiative (BRI) is 10 years old. In that time, China has splashed more than U ...
Friday, 10 November 23
THE COMMODITIES FEED: OIL UNDER PRESSURE - ING
Energy – Brent plummets
The oil market came under significant pressure yesterday. ICE Brent settled 4.19% lower on the day and ...
Friday, 10 November 23
COAL USE AT U.S. POWER PLANTS CONTINUES DOWNWARD SPIRAL; FULL IMPACT ON MINES TO BE FELT IN 2024 - IEEFA
This year, the use of coal by the U.S.’s power producers has been so anemic that the fuel has not achieved a 20% market share in any month so ...
Friday, 10 November 23
INDIA: NATIONAL COAL INDEX RISES 3.83 POINTS IN SEPTEMBER AMID HIGHER DEMAND - LIVEMINT
The National Coal Index (NCI) rose 3.83 points to 143.91 in September amid growing demand for coal.
The union coal ministry on Tuesd ...
Thursday, 09 November 23
WE'RE PRODUCING TOO MUCH COAL, OIL AND GAS, REPORT SAYS - WSJ
World leaders pledged in 2015 to reduce emissions in a combined effort to limit climate change.
Now they are stepping up production ...
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- Port Waratah Coal Services - Australia
- Bukit Baiduri Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Marubeni Corporation - India
- Vedanta Resources Plc - India
- Madhucon Powers Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Jindal Steel & Power Ltd - India
- Metalloyd Limited - United Kingdom
- Baramulti Group, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Toyota Tsusho Corporation, Japan
- Chettinad Cement Corporation Ltd - India
- India Bulls Power Limited - India
- Coalindo Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Interocean Group of Companies - India
- Pendopo Energi Batubara - Indonesia
- Meralco Power Generation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Central Electricity Authority - India
- GN Power Mariveles Coal Plant, Philippines
- Independent Power Producers Association of India
- Indo Tambangraya Megah - Indonesia
- Bangladesh Power Developement Board
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- MS Steel International - UAE
- Vijayanagar Sugar Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Makarim & Taira - Indonesia
- Orica Mining Services - Indonesia
- Edison Trading Spa - Italy
- VISA Power Limited - India
- Mercator Lines Limited - India
- Mercuria Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Altura Mining Limited, Indonesia
- Krishnapatnam Port Company Ltd. - India
- Gujarat Electricity Regulatory Commission - India
- Bharathi Cement Corporation - India
- Gujarat Sidhee Cement - India
- Parliament of New Zealand
- GAC Shipping (India) Pvt Ltd
- Straits Asia Resources Limited - Singapore
- LBH Netherlands Bv - Netherlands
- Mjunction Services Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Grasim Industreis Ltd - India
- Sojitz Corporation - Japan
- Global Coal Blending Company Limited - Australia
- IHS Mccloskey Coal Group - USA
- SMG Consultants - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Latin American Coal - Colombia
- Tamil Nadu electricity Board
- Africa Commodities Group - South Africa
- Kobexindo Tractors - Indoneisa
- Dalmia Cement Bharat India
- Global Business Power Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Banpu Public Company Limited - Thailand
- Star Paper Mills Limited - India
- Thai Mozambique Logistica
- Price Waterhouse Coopers - Russia
- Semirara Mining Corp, Philippines
- Wood Mackenzie - Singapore
- Sakthi Sugars Limited - India
- Jaiprakash Power Ventures ltd
- Rio Tinto Coal - Australia
- Asmin Koalindo Tuhup - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Sical Logistics Limited - India
- Billiton Holdings Pty Ltd - Australia
- Attock Cement Pakistan Limited
- Xindia Steels Limited - India
- GMR Energy Limited - India
- Lanco Infratech Ltd - India
- Thiess Contractors Indonesia
- Merrill Lynch Commodities Europe
- PTC India Limited - India
- Planning Commission, India
- ASAPP Information Group - India
- Standard Chartered Bank - UAE
- Riau Bara Harum - Indonesia
- Timah Investasi Mineral - Indoneisa
- Antam Resourcindo - Indonesia
- Kartika Selabumi Mining - Indonesia
- Orica Australia Pty. Ltd.
- Essar Steel Hazira Ltd - India
- Energy Link Ltd, New Zealand
- PetroVietnam Power Coal Import and Supply Company
- Singapore Mercantile Exchange
- Vizag Seaport Private Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Videocon Industries ltd - India
- Coal and Oil Company - UAE
- Larsen & Toubro Limited - India
- Australian Coal Association
- ICICI Bank Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Heidelberg Cement - Germany
- London Commodity Brokers - England
- Bank of Tokyo Mitsubishi UFJ Ltd
- Electricity Generating Authority of Thailand
- Indika Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Energy Development Corp, Philippines
- Romanian Commodities Exchange
- Parry Sugars Refinery, India
- Medco Energi Mining Internasional
- TeaM Sual Corporation - Philippines
- The Treasury - Australian Government
- CIMB Investment Bank - Malaysia
- Agrawal Coal Company - India
- Borneo Indobara - Indonesia
- Georgia Ports Authority, United States
- Aditya Birla Group - India
- Gujarat Mineral Development Corp Ltd - India
- GVK Power & Infra Limited - India
- Aboitiz Power Corporation - Philippines
- Economic Council, Georgia
- Commonwealth Bank - Australia
- Deloitte Consulting - India
- Savvy Resources Ltd - HongKong
- Ministry of Mines - Canada
- Globalindo Alam Lestari - Indonesia
- PNOC Exploration Corporation - Philippines
- Chamber of Mines of South Africa
- International Coal Ventures Pvt Ltd - India
- Eastern Coal Council - USA
- Maheswari Brothers Coal Limited - India
- Central Java Power - Indonesia
- Iligan Light & Power Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Rashtriya Ispat Nigam Limited - India
- South Luzon Thermal Energy Corporation
- Wilmar Investment Holdings
- Mintek Dendrill Indonesia
- Ministry of Finance - Indonesia
- Simpson Spence & Young - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Oldendorff Carriers - Singapore
- Anglo American - United Kingdom
- Manunggal Multi Energi - Indonesia
- Australian Commodity Traders Exchange
- Kideco Jaya Agung - Indonesia
- Salva Resources Pvt Ltd - India
- Carbofer General Trading SA - India
- SMC Global Power, Philippines
- Sarangani Energy Corporation, Philippines
- Posco Energy - South Korea
- Indian Oil Corporation Limited
- Tata Chemicals Ltd - India
- Minerals Council of Australia
- San Jose City I Power Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Karaikal Port Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- White Energy Company Limited
- European Bulk Services B.V. - Netherlands
- Cigading International Bulk Terminal - Indonesia
- Bulk Trading Sa - Switzerland
- Sindya Power Generating Company Private Ltd
- Siam City Cement PLC, Thailand
- Ind-Barath Power Infra Limited - India
- Trasteel International SA, Italy
- Meenaskhi Energy Private Limited - India
- Electricity Authority, New Zealand
- CNBM International Corporation - China
- IEA Clean Coal Centre - UK
- Intertek Mineral Services - Indonesia
- The State Trading Corporation of India Ltd
- Sinarmas Energy and Mining - Indonesia
- Bayan Resources Tbk. - Indonesia
- Goldman Sachs - Singapore
- Cement Manufacturers Association - India
- Bukit Makmur.PT - Indonesia
- Samtan Co., Ltd - South Korea
- Uttam Galva Steels Limited - India
- Petron Corporation, Philippines
- Renaissance Capital - South Africa
- Indian Energy Exchange, India
- McConnell Dowell - Australia
- Kumho Petrochemical, South Korea
- Ceylon Electricity Board - Sri Lanka
- AsiaOL BioFuels Corp., Philippines
- OPG Power Generation Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Directorate General of MIneral and Coal - Indonesia
- Bhatia International Limited - India
- The University of Queensland
- Ministry of Transport, Egypt
- Therma Luzon, Inc, Philippines
- Malabar Cements Ltd - India
- Directorate Of Revenue Intelligence - India
- Indogreen Group - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Indonesian Coal Mining Association
- Karbindo Abesyapradhi - Indoneisa
- Bhoruka Overseas - Indonesia
- Bhushan Steel Limited - India
- Barasentosa Lestari - Indonesia
- Formosa Plastics Group - Taiwan
- Binh Thuan Hamico - Vietnam
- PowerSource Philippines DevCo
- Jorong Barutama Greston.PT - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Power Finance Corporation Ltd., India
- Ambuja Cements Ltd - India
- Eastern Energy - Thailand
- New Zealand Coal & Carbon
- Siam City Cement - Thailand
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