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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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Wednesday, 02 September 20
INDONESIA COAL PRICE REFERENCE DIVES FURTHER IN SEPTEMBER DUE TO SUBDUED DEMAND & GLOBAL OVERSUPPLY
Subdued demand & global oversupply pushed down this month's HBA
COALspot.com: The Indonesia Coal Price Reference ...
Tuesday, 01 September 20
WHY INDIA CAN'T MATCH THE GULF REGION'S RECORD-LOW SOLAR TARIFFS - IEEFA
5-10% annual decline in tariffs estimated for the next decade
A number of countries in the Gulf region have set record-low prices for solar in ...
Tuesday, 01 September 20
COVID-19 PUSHES US LNG INTO A TIGHT SPOT - DREWRY
The pandemic-led weak projections for economic growth will derail US LNG exports in full-year 2020 with the country also losing ground in the long ...
Monday, 31 August 20
DEFECTIVE PASSAGE PLANNING: UNSEAWORTHINESS OR A NAVIGATIONAL DECISION? THE CMA CGM LIBRA QUESTION SAILS ON TO THE UK SUPREME COURT - GARD
KNOWLEDGE TO ELEVATE
The UK Supreme Court has granted leave to appeal the recent decision in Alize 1954 v Allianz Elementar Versicherungs AG ( ...
Sunday, 30 August 20
PANAMAX - THIS WEEK THE DEMAND HAS PICKED UP, BUT THE TONNAGE LIST IS INCREASING DAY BY DAY - FEARNLEYS
Cape Size
More or less flat from previous week, with cape rates moving from US$ 19,500 to 18,900 on average. West Australia however being more ...
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- GVK Power & Infra Limited - India
- Indogreen Group - Indonesia
- Chettinad Cement Corporation Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vijayanagar Sugar Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Romanian Commodities Exchange
- Global Green Power PLC Corporation, Philippines
- Larsen & Toubro Limited - India
- Miang Besar Coal Terminal - Indonesia
- Mintek Dendrill Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Economic Council, Georgia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- New Zealand Coal & Carbon
- SMG Consultants - Indonesia
- Singapore Mercantile Exchange
- Electricity Generating Authority of Thailand
- Binh Thuan Hamico - Vietnam
- Baramulti Group, Indonesia
- ICICI Bank Limited - India
- CNBM International Corporation - China
- Antam Resourcindo - Indonesia
- Interocean Group of Companies - India
- Cigading International Bulk Terminal - Indonesia
- Medco Energi Mining Internasional
- Krishnapatnam Port Company Ltd. - India
- AsiaOL BioFuels Corp., Philippines
- Trasteel International SA, Italy
- India Bulls Power Limited - India
- Aboitiz Power Corporation - Philippines
- Intertek Mineral Services - Indonesia
- Coal and Oil Company - UAE
- Planning Commission, India
- Price Waterhouse Coopers - Russia
- GAC Shipping (India) Pvt Ltd
- Oldendorff Carriers - Singapore
- London Commodity Brokers - England
- Sarangani Energy Corporation, Philippines
- Petron Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Sical Logistics Limited - India
- Goldman Sachs - Singapore
- Manunggal Multi Energi - Indonesia
- Banpu Public Company Limited - Thailand
- Kepco SPC Power Corporation, Philippines
- Videocon Industries ltd - India
- Bayan Resources Tbk. - Indonesia
- Coastal Gujarat Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Orica Australia Pty. Ltd.
- Indo Tambangraya Megah - Indonesia
- Agrawal Coal Company - India
- Thai Mozambique Logistica
- Altura Mining Limited, Indonesia
- TeaM Sual Corporation - Philippines
- Central Java Power - Indonesia
- Wilmar Investment Holdings
- Kapuas Tunggal Persada - Indonesia
- Edison Trading Spa - Italy
- Directorate Of Revenue Intelligence - India
- Carbofer General Trading SA - India
- PowerSource Philippines DevCo
- Energy Development Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Karaikal Port Pvt Ltd - India
- Ministry of Finance - Indonesia
- Jindal Steel & Power Ltd - India
- GMR Energy Limited - India
- Mercuria Energy - Indonesia
- Australian Commodity Traders Exchange
- Tamil Nadu electricity Board
- Sojitz Corporation - Japan
- Simpson Spence & Young - Indonesia
- Bharathi Cement Corporation - India
- MS Steel International - UAE
- The State Trading Corporation of India Ltd
- Essar Steel Hazira Ltd - India
- OPG Power Generation Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Star Paper Mills Limited - India
- Merrill Lynch Commodities Europe
- Vedanta Resources Plc - India
- Ministry of Mines - Canada
- Jorong Barutama Greston.PT - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Anglo American - United Kingdom
- Eastern Coal Council - USA
- Semirara Mining Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Rio Tinto Coal - Australia
- Bukit Baiduri Energy - Indonesia
- Commonwealth Bank - Australia
- IEA Clean Coal Centre - UK
- Riau Bara Harum - Indonesia
- Bhoruka Overseas - Indonesia
- Standard Chartered Bank - UAE
- Energy Link Ltd, New Zealand
- Toyota Tsusho Corporation, Japan
- Bhatia International Limited - India
- Indian Energy Exchange, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- IHS Mccloskey Coal Group - USA
- Bulk Trading Sa - Switzerland
- SN Aboitiz Power Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Heidelberg Cement - Germany
- Mjunction Services Limited - India
- Posco Energy - South Korea
- Cement Manufacturers Association - India
- Semirara Mining and Power Corporation, Philippines
- Parliament of New Zealand
- Kartika Selabumi Mining - Indonesia
- Siam City Cement - Thailand
- Formosa Plastics Group - Taiwan
- Barasentosa Lestari - Indonesia
- Borneo Indobara - Indonesia
- Pendopo Energi Batubara - Indonesia
- White Energy Company Limited
- Attock Cement Pakistan Limited
- Maheswari Brothers Coal Limited - India
- Australian Coal Association
- Orica Mining Services - Indonesia
- Central Electricity Authority - India
- Siam City Cement PLC, Thailand
- CIMB Investment Bank - Malaysia
- Rashtriya Ispat Nigam Limited - India
- San Jose City I Power Corp, Philippines
- ASAPP Information Group - India
- Therma Luzon, Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Neyveli Lignite Corporation Ltd, - India
- Metalloyd Limited - United Kingdom
- Samtan Co., Ltd - South Korea
- Indian Oil Corporation Limited
- Sindya Power Generating Company Private Ltd
- Port Waratah Coal Services - Australia
- Kaltim Prima Coal - Indonesia
- Independent Power Producers Association of India
- Karbindo Abesyapradhi - Indoneisa
- Wood Mackenzie - Singapore
- Directorate General of MIneral and Coal - Indonesia
- South Luzon Thermal Energy Corporation
- Vizag Seaport Private Limited - India
- Indonesian Coal Mining Association
- SMC Global Power, Philippines
- Kideco Jaya Agung - Indonesia
- Madhucon Powers Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Globalindo Alam Lestari - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Sidhee Cement - India
- Mercator Lines Limited - India
- Lanco Infratech Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Kobexindo Tractors - Indoneisa
- Makarim & Taira - Indonesia
- PNOC Exploration Corporation - Philippines
- The University of Queensland
- Electricity Authority, New Zealand
- Grasim Industreis Ltd - India
- Timah Investasi Mineral - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Africa Commodities Group - South Africa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- McConnell Dowell - Australia
- PTC India Limited - India
- Sree Jayajothi Cements Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Salva Resources Pvt Ltd - India
- Ministry of Transport, Egypt
- Iligan Light & Power Inc, Philippines
- Ambuja Cements Ltd - India
- Chamber of Mines of South Africa
- Global Business Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Dalmia Cement Bharat India
- European Bulk Services B.V. - Netherlands
- Minerals Council of Australia
- VISA Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Indika Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Billiton Holdings Pty Ltd - Australia
- Tata Chemicals Ltd - India
- Latin American Coal - Colombia
- Deloitte Consulting - India
- Bhushan Steel Limited - India
- Georgia Ports Authority, United States
- Aditya Birla Group - India
- The Treasury - Australian Government
- Asmin Koalindo Tuhup - Indonesia
- Bangladesh Power Developement Board
- Sakthi Sugars Limited - India
- Eastern Energy - Thailand
- Gujarat Electricity Regulatory Commission - India
- Xindia Steels Limited - India
- Malabar Cements Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Global Coal Blending Company Limited - Australia
- Savvy Resources Ltd - HongKong
- Ind-Barath Power Infra Limited - India
- Parry Sugars Refinery, India
- Uttam Galva Steels Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Thiess Contractors Indonesia
- Meralco Power Generation, Philippines
- Marubeni Corporation - India
- Renaissance Capital - South Africa
- Power Finance Corporation Ltd., India
- Coalindo Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- PetroVietnam Power Coal Import and Supply Company
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