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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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Thursday, 20 August 20
MINER BHP CONFIRMS PLANS TO EXIT THERMAL COAL SECTOR - THE SYDNEY MORNING HERALD
The head of mining giant BHP has laid out plans for a reshaping of its global operations by seeking to quit thermal coal mining, offload some cokin ...
Thursday, 20 August 20
LONDON RETAINS ARBITER CROWN - BALTIC EXCHANGE | HFW
Fears that the UK’s decision to leave the European Union would dent the reputation of the nation’s capital as the leader in maritime ar ...
Wednesday, 19 August 20
U.S. COAL STOCKPILES STEADILY INCREASE AFTER REACHING LOWEST LEVEL IN A DECADE IN 2019 - EIA
After reaching their lowest level in more than a decade in March 2019, U.S. coal stockpiles steadily increased to 152 million tons in April 2020, r ...
Wednesday, 19 August 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.26 PCT - XINHUA
China Taiyuan coal transaction price index stood at 124.92 points Monday, down 0.26 percent week on week.
The index, released by Chi ...
Wednesday, 19 August 20
COAL INDIA TRADE UNIONS DEFER DAY-LONG STRIKE: PTI
The unions had decided to go on strike against the commercial mining and the proposed divestment or buyback of shares of Coal India Ltd (CIL).
...
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- The State Trading Corporation of India Ltd
- Maheswari Brothers Coal Limited - India
- MS Steel International - UAE
- Eastern Energy - Thailand
- Timah Investasi Mineral - Indoneisa
- CIMB Investment Bank - Malaysia
- Sojitz Corporation - Japan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jaiprakash Power Ventures ltd
- Agrawal Coal Company - India
- Star Paper Mills Limited - India
- Global Green Power PLC Corporation, Philippines
- The University of Queensland
- OPG Power Generation Pvt Ltd - India
- Malabar Cements Ltd - India
- Intertek Mineral Services - Indonesia
- LBH Netherlands Bv - Netherlands
- GVK Power & Infra Limited - India
- Larsen & Toubro Limited - India
- Ministry of Finance - Indonesia
- Bhatia International Limited - India
- IEA Clean Coal Centre - UK
- Kepco SPC Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- Manunggal Multi Energi - Indonesia
- Planning Commission, India
- Toyota Tsusho Corporation, Japan
- Renaissance Capital - South Africa
- The Treasury - Australian Government
- Coalindo Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Bukit Makmur.PT - Indonesia
- Sakthi Sugars Limited - India
- Barasentosa Lestari - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- New Zealand Coal & Carbon
- Electricity Generating Authority of Thailand
- Interocean Group of Companies - India
- Pendopo Energi Batubara - Indonesia
- Anglo American - United Kingdom
- Bank of Tokyo Mitsubishi UFJ Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Antam Resourcindo - Indonesia
- Semirara Mining Corp, Philippines
- VISA Power Limited - India
- Indo Tambangraya Megah - Indonesia
- Sarangani Energy Corporation, Philippines
- Indian Oil Corporation Limited
- Aboitiz Power Corporation - Philippines
- Videocon Industries ltd - India
- Economic Council, Georgia
- Singapore Mercantile Exchange
- Globalindo Alam Lestari - Indonesia
- Georgia Ports Authority, United States
- Posco Energy - South Korea
- Altura Mining Limited, Indonesia
- International Coal Ventures Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Bharathi Cement Corporation - India
- Vizag Seaport Private Limited - India
- Alfred C Toepfer International GmbH - Germany
- Trasteel International SA, Italy
- GMR Energy Limited - India
- Gujarat Electricity Regulatory Commission - India
- Edison Trading Spa - Italy
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ambuja Cements Ltd - India
- McConnell Dowell - Australia
- Coastal Gujarat Power Limited - India
- Latin American Coal - Colombia
- Central Java Power - Indonesia
- London Commodity Brokers - England
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Transport, Egypt
- Riau Bara Harum - Indonesia
- Semirara Mining and Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- European Bulk Services B.V. - Netherlands
- Aditya Birla Group - India
- Wood Mackenzie - Singapore
- Thai Mozambique Logistica
- Power Finance Corporation Ltd., India
- Bhushan Steel Limited - India
- Australian Coal Association
- Thiess Contractors Indonesia
- Madhucon Powers Ltd - India
- Mintek Dendrill Indonesia
- Bulk Trading Sa - Switzerland
- Global Coal Blending Company Limited - Australia
- Sree Jayajothi Cements Limited - India
- White Energy Company Limited
- Standard Chartered Bank - UAE
- Indonesian Coal Mining Association
- Kartika Selabumi Mining - Indonesia
- Bukit Baiduri Energy - Indonesia
- Sical Logistics Limited - India
- Indian Energy Exchange, India
- Holcim Trading Pte Ltd - Singapore
- Commonwealth Bank - Australia
- Asmin Koalindo Tuhup - Indonesia
- Uttam Galva Steels Limited - India
- Kideco Jaya Agung - Indonesia
- Medco Energi Mining Internasional
- Lanco Infratech Ltd - India
- CNBM International Corporation - China
- Directorate General of MIneral and Coal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Independent Power Producers Association of India
- Rio Tinto Coal - Australia
- Dalmia Cement Bharat India
- Energy Link Ltd, New Zealand
- Kohat Cement Company Ltd. - Pakistan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Karbindo Abesyapradhi - Indoneisa
- Wilmar Investment Holdings
- Miang Besar Coal Terminal - Indonesia
- ASAPP Information Group - India
- Bayan Resources Tbk. - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Minerals Council of Australia
- Tata Chemicals Ltd - India
- Kobexindo Tractors - Indoneisa
- Essar Steel Hazira Ltd - India
- Formosa Plastics Group - Taiwan
- Central Electricity Authority - India
- Tamil Nadu electricity Board
- Vijayanagar Sugar Pvt Ltd - India
- Parliament of New Zealand
- PowerSource Philippines DevCo
- Borneo Indobara - Indonesia
- Xindia Steels Limited - India
- Meralco Power Generation, Philippines
- SN Aboitiz Power Inc, Philippines
- Attock Cement Pakistan Limited
- Directorate Of Revenue Intelligence - India
- Rashtriya Ispat Nigam Limited - India
- Mercator Lines Limited - India
- Africa Commodities Group - South Africa
- Krishnapatnam Port Company Ltd. - India
- Pipit Mutiara Jaya. PT, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Ministry of Mines - Canada
- Indika Energy - Indonesia
- Coal and Oil Company - UAE
- PetroVietnam Power Coal Import and Supply Company
- Neyveli Lignite Corporation Ltd, - India
- Grasim Industreis Ltd - India
- Cement Manufacturers Association - India
- Petrochimia International Co. Ltd.- Taiwan
- Goldman Sachs - Singapore
- Banpu Public Company Limited - Thailand
- Global Business Power Corporation, Philippines
- Petron Corporation, Philippines
- Parry Sugars Refinery, India
- Savvy Resources Ltd - HongKong
- Bangladesh Power Developement Board
- Sindya Power Generating Company Private Ltd
- Deloitte Consulting - India
- Australian Commodity Traders Exchange
- Bhoruka Overseas - Indonesia
- PTC India Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Kumho Petrochemical, South Korea
- Kapuas Tunggal Persada - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Gujarat Sidhee Cement - India
- Karaikal Port Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Carbofer General Trading SA - India
- India Bulls Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Mercuria Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- South Luzon Thermal Energy Corporation
- San Jose City I Power Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Metalloyd Limited - United Kingdom
- Siam City Cement - Thailand
- Energy Development Corp, Philippines
- Romanian Commodities Exchange
- ICICI Bank Limited - India
- Makarim & Taira - Indonesia
- Siam City Cement PLC, Thailand
- PNOC Exploration Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Heidelberg Cement - Germany
- Samtan Co., Ltd - South Korea
- Simpson Spence & Young - Indonesia
- TeaM Sual Corporation - Philippines
- Price Waterhouse Coopers - Russia
- Indogreen Group - Indonesia
- Port Waratah Coal Services - Australia
- Binh Thuan Hamico - Vietnam
- Jindal Steel & Power Ltd - India
- Iligan Light & Power Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Vedanta Resources Plc - India
- TNB Fuel Sdn Bhd - Malaysia
- SMG Consultants - Indonesia
- SMC Global Power, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Eastern Coal Council - USA
- Salva Resources Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Straits Asia Resources Limited - Singapore
- Orica Mining Services - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Marubeni Corporation - India
- Sinarmas Energy and Mining - Indonesia
- Merrill Lynch Commodities Europe
- Orica Australia Pty. Ltd.
- Kaltim Prima Coal - Indonesia
- Mjunction Services Limited - India
- Electricity Authority, New Zealand
- Baramulti Group, Indonesia
- Chamber of Mines of South Africa
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