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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, 12 August 20
U.S. COAL PRODUCTION IN 2020 WILL DECREASE BY 29% FROM 2019 LEVELS TO 502 MMST - EIA
U.S. coal consumption, which dropped to its lowest point since April, totaled 95 MMst in the second quarter of 2020.
EIA expec ...
Tuesday, 11 August 20
BHP COAL ASSETS WORTH A BILLION LESS THAN JUST TWO YEARS AGO - IEEFA
Another global investor, the UK’s biggest public pension fund NEST, has withdrawn funds from BHP this week because the company is profiting & ...
Monday, 10 August 20
COAL IMPORT DROPS 43% IN JULY OWING TO HIGH STOCKPILE AT PITHEADS, PLANTS - PTI
“The market participants seem to have adopted a wait and watch approach and are currently looking for a direction. We do not expect to see an ...
Saturday, 08 August 20
GLOBAL COAL POWER PUZZLE - BALTIC EXCHANGE
Global Energy Monitor’s latest Global Coal Plant Tracker has put another nail in the coffin for the coal-carrying fleet with its finding that ...
Friday, 07 August 20
PEABODY'S $1.42 BILLION WRITE-DOWN CONCEDES COAL MINES HAVE LITTLE VALUE AND DIM FUTURE - IEEFA
Trouble at biggest mine in Powder River Basin speaks volumes about state of industry
Peabody Energy, the world’s largest priva ...
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- Mercator Lines Limited - India
- Central Electricity Authority - India
- Ceylon Electricity Board - Sri Lanka
- Formosa Plastics Group - Taiwan
- Eastern Coal Council - USA
- Ministry of Transport, Egypt
- IHS Mccloskey Coal Group - USA
- Ind-Barath Power Infra Limited - India
- Borneo Indobara - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- The State Trading Corporation of India Ltd
- Maharashtra Electricity Regulatory Commission - India
- Petrochimia International Co. Ltd.- Taiwan
- India Bulls Power Limited - India
- Madhucon Powers Ltd - India
- Bhatia International Limited - India
- Kepco SPC Power Corporation, Philippines
- Larsen & Toubro Limited - India
- SMC Global Power, Philippines
- Mintek Dendrill Indonesia
- Toyota Tsusho Corporation, Japan
- ASAPP Information Group - India
- Bahari Cakrawala Sebuku - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Pipit Mutiara Jaya. PT, Indonesia
- Xindia Steels Limited - India
- Commonwealth Bank - Australia
- Bhushan Steel Limited - India
- Energy Development Corp, Philippines
- Meralco Power Generation, Philippines
- Simpson Spence & Young - Indonesia
- SMG Consultants - Indonesia
- MS Steel International - UAE
- Directorate Of Revenue Intelligence - India
- Grasim Industreis Ltd - India
- Star Paper Mills Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- London Commodity Brokers - England
- CIMB Investment Bank - Malaysia
- Cement Manufacturers Association - India
- European Bulk Services B.V. - Netherlands
- Medco Energi Mining Internasional
- Sical Logistics Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Straits Asia Resources Limited - Singapore
- Indogreen Group - Indonesia
- The University of Queensland
- Therma Luzon, Inc, Philippines
- Standard Chartered Bank - UAE
- Wood Mackenzie - Singapore
- Orica Mining Services - Indonesia
- Posco Energy - South Korea
- Latin American Coal - Colombia
- Malabar Cements Ltd - India
- Kapuas Tunggal Persada - Indonesia
- SN Aboitiz Power Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Deloitte Consulting - India
- Marubeni Corporation - India
- Central Java Power - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Jaiprakash Power Ventures ltd
- GVK Power & Infra Limited - India
- Siam City Cement PLC, Thailand
- Barasentosa Lestari - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Siam City Cement - Thailand
- Karaikal Port Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Price Waterhouse Coopers - Russia
- Coal and Oil Company - UAE
- Rio Tinto Coal - Australia
- Sakthi Sugars Limited - India
- Sojitz Corporation - Japan
- Makarim & Taira - Indonesia
- Mercuria Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Lanco Infratech Ltd - India
- Thiess Contractors Indonesia
- Riau Bara Harum - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Goldman Sachs - Singapore
- Africa Commodities Group - South Africa
- VISA Power Limited - India
- ICICI Bank Limited - India
- Singapore Mercantile Exchange
- Romanian Commodities Exchange
- Ministry of Mines - Canada
- Semirara Mining Corp, Philippines
- Bukit Makmur.PT - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Electricity Authority, New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Antam Resourcindo - Indonesia
- PNOC Exploration Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Mjunction Services Limited - India
- Planning Commission, India
- Gujarat Sidhee Cement - India
- Baramulti Group, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GMR Energy Limited - India
- Manunggal Multi Energi - Indonesia
- Samtan Co., Ltd - South Korea
- Australian Coal Association
- Salva Resources Pvt Ltd - India
- Thai Mozambique Logistica
- Cigading International Bulk Terminal - Indonesia
- Global Coal Blending Company Limited - Australia
- Carbofer General Trading SA - India
- Jindal Steel & Power Ltd - India
- New Zealand Coal & Carbon
- Directorate General of MIneral and Coal - Indonesia
- White Energy Company Limited
- Kobexindo Tractors - Indoneisa
- Sindya Power Generating Company Private Ltd
- Bangladesh Power Developement Board
- Binh Thuan Hamico - Vietnam
- Heidelberg Cement - Germany
- Coalindo Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Orica Australia Pty. Ltd.
- Agrawal Coal Company - India
- Metalloyd Limited - United Kingdom
- Bukit Baiduri Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- International Coal Ventures Pvt Ltd - India
- Dalmia Cement Bharat India
- Indonesian Coal Mining Association
- Alfred C Toepfer International GmbH - Germany
- Interocean Group of Companies - India
- Chamber of Mines of South Africa
- Bhoruka Overseas - Indonesia
- Timah Investasi Mineral - Indoneisa
- Kaltim Prima Coal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Videocon Industries ltd - India
- Vedanta Resources Plc - India
- Billiton Holdings Pty Ltd - Australia
- Altura Mining Limited, Indonesia
- San Jose City I Power Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Anglo American - United Kingdom
- Sarangani Energy Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Kumho Petrochemical, South Korea
- Savvy Resources Ltd - HongKong
- Bayan Resources Tbk. - Indonesia
- South Luzon Thermal Energy Corporation
- Intertek Mineral Services - Indonesia
- Ambuja Cements Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- The Treasury - Australian Government
- Aditya Birla Group - India
- Ministry of Finance - Indonesia
- Eastern Energy - Thailand
- Chettinad Cement Corporation Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Attock Cement Pakistan Limited
- Gujarat Mineral Development Corp Ltd - India
- Kideco Jaya Agung - Indonesia
- Merrill Lynch Commodities Europe
- Aboitiz Power Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Vizag Seaport Private Limited - India
- Renaissance Capital - South Africa
- Pendopo Energi Batubara - Indonesia
- Maheswari Brothers Coal Limited - India
- Petron Corporation, Philippines
- Indian Energy Exchange, India
- Edison Trading Spa - Italy
- PTC India Limited - India
- Gujarat Electricity Regulatory Commission - India
- Neyveli Lignite Corporation Ltd, - India
- Indika Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Georgia Ports Authority, United States
- McConnell Dowell - Australia
- Tamil Nadu electricity Board
- Trasteel International SA, Italy
- Indian Oil Corporation Limited
- Parry Sugars Refinery, India
- Global Green Power PLC Corporation, Philippines
- Global Business Power Corporation, Philippines
- Australian Commodity Traders Exchange
- Leighton Contractors Pty Ltd - Australia
- Electricity Generating Authority of Thailand
- Coastal Gujarat Power Limited - India
- Parliament of New Zealand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Iligan Light & Power Inc, Philippines
- Bharathi Cement Corporation - India
- Minerals Council of Australia
- PowerSource Philippines DevCo
- Port Waratah Coal Services - Australia
- Uttam Galva Steels Limited - India
- IEA Clean Coal Centre - UK
- Oldendorff Carriers - Singapore
- Banpu Public Company Limited - Thailand
- Economic Council, Georgia
- Krishnapatnam Port Company Ltd. - India
- Sinarmas Energy and Mining - Indonesia
- Indo Tambangraya Megah - Indonesia
- Wilmar Investment Holdings
- Globalindo Alam Lestari - Indonesia
- TeaM Sual Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Tata Chemicals Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- CNBM International Corporation - China
- Kartika Selabumi Mining - Indonesia
- Meenaskhi Energy Private Limited - India
- Essar Steel Hazira Ltd - India
- Independent Power Producers Association of India
- Power Finance Corporation Ltd., India
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