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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, 19 August 20
MISC MARKS ITS MAIDEN FORAY INTO MAJOR DEEP-WATER PROJECT IN LATIN AMERICA WITH MERO 3 FPSO
MISC Berhad (MISC) is pleased to announce its acceptance of Letter of Intent (LOI) from Petróleo Brasileiro S.A. (Petrobras) for the provisi ...
Wednesday, 19 August 20
MARKET INSIGHT - GEORGE LAIOS | INTERMODAL
Since the Covid-19 outbreak, governments and central banks around the globe have been using their ammunition and stimulus packages to keep their ec ...
Wednesday, 19 August 20
INDIA SAW A SHARP DECLINE IN ENERGY COAL IMPORTS IN JANUARY - JUNE 2020; –27 PER CENT YOY - BHP
Energy coal prices were weak in the second half of financial year 2020, BHP says in its Economic and Commodity Outlook FY20.
Accordi ...
Wednesday, 19 August 20
COAL PRICES TO REMAIN SUBDUED THIS FISCAL AMID WEAK DEMAND, HIGH INVENTORY - THE HINDU BUSINESS LINE
Coal offtake is improving gradually as lockdown eases
Coal prices are expected to remain subdued to weak demand and high inventory l ...
Tuesday, 18 August 20
BLACKBALLED: WILL COAL BOUNCE BACK FROM SLUMP OR IS IT TERMINAL? - SYDNEY MORNING HERALD
Even by the standards of this miserable year, 2020 has been a shocker for the global coal industry.
As the lockdown kicked in demand ...
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- Parliament of New Zealand
- Carbofer General Trading SA - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Minerals Council of Australia
- Independent Power Producers Association of India
- Central Electricity Authority - India
- Bayan Resources Tbk. - Indonesia
- Global Coal Blending Company Limited - Australia
- GN Power Mariveles Coal Plant, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Wood Mackenzie - Singapore
- Mjunction Services Limited - India
- CNBM International Corporation - China
- Semirara Mining Corp, Philippines
- Aditya Birla Group - India
- VISA Power Limited - India
- Vizag Seaport Private Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Power Finance Corporation Ltd., India
- Binh Thuan Hamico - Vietnam
- Meralco Power Generation, Philippines
- MS Steel International - UAE
- Borneo Indobara - Indonesia
- Singapore Mercantile Exchange
- Indo Tambangraya Megah - Indonesia
- Siam City Cement - Thailand
- Bharathi Cement Corporation - India
- Planning Commission, India
- Sindya Power Generating Company Private Ltd
- Posco Energy - South Korea
- Kumho Petrochemical, South Korea
- AsiaOL BioFuels Corp., Philippines
- Madhucon Powers Ltd - India
- GVK Power & Infra Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Sakthi Sugars Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Savvy Resources Ltd - HongKong
- Asmin Koalindo Tuhup - Indonesia
- Kaltim Prima Coal - Indonesia
- Baramulti Group, Indonesia
- International Coal Ventures Pvt Ltd - India
- Ambuja Cements Ltd - India
- Jindal Steel & Power Ltd - India
- Ministry of Transport, Egypt
- Eastern Coal Council - USA
- OPG Power Generation Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Star Paper Mills Limited - India
- Uttam Galva Steels Limited - India
- Lanco Infratech Ltd - India
- New Zealand Coal & Carbon
- Edison Trading Spa - Italy
- Timah Investasi Mineral - Indoneisa
- Karbindo Abesyapradhi - Indoneisa
- Karaikal Port Pvt Ltd - India
- Bhushan Steel Limited - India
- Economic Council, Georgia
- Goldman Sachs - Singapore
- Mintek Dendrill Indonesia
- Formosa Plastics Group - Taiwan
- PowerSource Philippines DevCo
- Alfred C Toepfer International GmbH - Germany
- Marubeni Corporation - India
- The Treasury - Australian Government
- Aboitiz Power Corporation - Philippines
- Therma Luzon, Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Interocean Group of Companies - India
- Thai Mozambique Logistica
- Dalmia Cement Bharat India
- Petrochimia International Co. Ltd.- Taiwan
- Tata Chemicals Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Metalloyd Limited - United Kingdom
- Kideco Jaya Agung - Indonesia
- Merrill Lynch Commodities Europe
- Indian Energy Exchange, India
- Australian Commodity Traders Exchange
- Renaissance Capital - South Africa
- Intertek Mineral Services - Indonesia
- Indika Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Makmur.PT - Indonesia
- South Luzon Thermal Energy Corporation
- Latin American Coal - Colombia
- Gujarat Electricity Regulatory Commission - India
- Orica Mining Services - Indonesia
- Rio Tinto Coal - Australia
- Larsen & Toubro Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- Agrawal Coal Company - India
- Kartika Selabumi Mining - Indonesia
- Bulk Trading Sa - Switzerland
- SMG Consultants - Indonesia
- Tamil Nadu electricity Board
- Directorate Of Revenue Intelligence - India
- Toyota Tsusho Corporation, Japan
- Indogreen Group - Indonesia
- Bhoruka Overseas - Indonesia
- Iligan Light & Power Inc, Philippines
- Cement Manufacturers Association - India
- Oldendorff Carriers - Singapore
- Bangladesh Power Developement Board
- Standard Chartered Bank - UAE
- Petron Corporation, Philippines
- Wilmar Investment Holdings
- Trasteel International SA, Italy
- Riau Bara Harum - Indonesia
- Straits Asia Resources Limited - Singapore
- Coalindo Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Eastern Energy - Thailand
- PTC India Limited - India
- Rashtriya Ispat Nigam Limited - India
- Attock Cement Pakistan Limited
- IEA Clean Coal Centre - UK
- SMC Global Power, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Parry Sugars Refinery, India
- London Commodity Brokers - England
- Holcim Trading Pte Ltd - Singapore
- Medco Energi Mining Internasional
- TeaM Sual Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Energy Development Corp, Philippines
- Electricity Authority, New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Sical Logistics Limited - India
- Kobexindo Tractors - Indoneisa
- Malabar Cements Ltd - India
- The University of Queensland
- Sree Jayajothi Cements Limited - India
- Electricity Generating Authority of Thailand
- PNOC Exploration Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- Pendopo Energi Batubara - Indonesia
- Makarim & Taira - Indonesia
- Price Waterhouse Coopers - Russia
- Globalindo Alam Lestari - Indonesia
- Romanian Commodities Exchange
- Ministry of Mines - Canada
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Mineral Development Corp Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Coal and Oil Company - UAE
- GMR Energy Limited - India
- Indonesian Coal Mining Association
- Kepco SPC Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Anglo American - United Kingdom
- Ministry of Finance - Indonesia
- Jaiprakash Power Ventures ltd
- Australian Coal Association
- Billiton Holdings Pty Ltd - Australia
- Africa Commodities Group - South Africa
- Kohat Cement Company Ltd. - Pakistan
- Central Java Power - Indonesia
- Videocon Industries ltd - India
- Krishnapatnam Port Company Ltd. - India
- Gujarat Sidhee Cement - India
- The State Trading Corporation of India Ltd
- Bhatia International Limited - India
- Samtan Co., Ltd - South Korea
- Indian Oil Corporation Limited
- Pipit Mutiara Jaya. PT, Indonesia
- Chettinad Cement Corporation Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Xindia Steels Limited - India
- Sojitz Corporation - Japan
- Deloitte Consulting - India
- Heidelberg Cement - Germany
- India Bulls Power Limited - India
- Siam City Cement PLC, Thailand
- White Energy Company Limited
- ASAPP Information Group - India
- Mercuria Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Antam Resourcindo - Indonesia
- ICICI Bank Limited - India
- Global Green Power PLC Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Chamber of Mines of South Africa
- Vedanta Resources Plc - India
- Global Business Power Corporation, Philippines
- Grasim Industreis Ltd - India
- Maheswari Brothers Coal Limited - India
- Thiess Contractors Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Essar Steel Hazira Ltd - India
- Altura Mining Limited, Indonesia
- Ind-Barath Power Infra Limited - India
- Banpu Public Company Limited - Thailand
- Port Waratah Coal Services - Australia
- IHS Mccloskey Coal Group - USA
- Energy Link Ltd, New Zealand
- Mercator Lines Limited - India
- Coastal Gujarat Power Limited - India
- CIMB Investment Bank - Malaysia
- Meenaskhi Energy Private Limited - India
- European Bulk Services B.V. - Netherlands
- Georgia Ports Authority, United States
- Barasentosa Lestari - Indonesia
- McConnell Dowell - Australia
- GAC Shipping (India) Pvt Ltd
- Sinarmas Energy and Mining - Indonesia
- Manunggal Multi Energi - Indonesia
- Sarangani Energy Corporation, Philippines
- Commonwealth Bank - Australia
- San Jose City I Power Corp, Philippines
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