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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, 06 August 20
SUPRAMAX MARKET CONTINUED SIDEWAYS TREND, AND LITTLE INSPIRING NEWS APPEAR - FEARNLEYS
Capesize
There is presently a small correction in rates, but overall levels are up from previous week mainly due to increased demand in the Eas ...
Thursday, 06 August 20
KOREA SOUTH-EAST POWER INVITING BIDS FOR MIN 3,600-MAX 3,800 NCV COAL
COALspot.com: South Korea’s KOREA SOUTH-EAST POWER CO., LTD. (KOEN) inviting bids for 80,000 Tons (MT) Min 3,600~Max 3,800 kcal/kg NCV coal f ...
Wednesday, 05 August 20
NO NEW MINING LICENSES - A REMINDER TO GOVERNORS IN INDONESIA - SSEK
Indonesia’s acting Director General of Mining and Coal (“DGMC”) has issued a letter to the country’s provincial Governors t ...
Wednesday, 05 August 20
AUGUST 2020 HBA HITTING ITS LOWEST LEVELS IN HISTORY
COALspot.com: The Indonesia Coal Price Reference for the month of August plunged 30.73% YoY, hitting its lowest levels in history and highlighting ...
Wednesday, 05 August 20
SLUMP IN OIL REVENUE CHALLENGES MIDDLE EAST OIL EXPORTERS - INTERMODAL
The Covid-19 pandemic has had far-reaching consequences on the global capital markets. Despite the US government’s efforts for a quick and de ...
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- Standard Chartered Bank - UAE
- New Zealand Coal & Carbon
- VISA Power Limited - India
- Simpson Spence & Young - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bukit Baiduri Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Indogreen Group - Indonesia
- Karaikal Port Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Mercuria Energy - Indonesia
- Planning Commission, India
- Petron Corporation, Philippines
- Baramulti Group, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Wilmar Investment Holdings
- McConnell Dowell - Australia
- Gujarat Sidhee Cement - India
- Eastern Coal Council - USA
- Electricity Generating Authority of Thailand
- MS Steel International - UAE
- International Coal Ventures Pvt Ltd - India
- Bhatia International Limited - India
- Wood Mackenzie - Singapore
- Sinarmas Energy and Mining - Indonesia
- Merrill Lynch Commodities Europe
- Indian Oil Corporation Limited
- OPG Power Generation Pvt Ltd - India
- Xindia Steels Limited - India
- Indo Tambangraya Megah - Indonesia
- Tata Chemicals Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- AsiaOL BioFuels Corp., Philippines
- Global Business Power Corporation, Philippines
- The Treasury - Australian Government
- Maheswari Brothers Coal Limited - India
- Orica Mining Services - Indonesia
- Star Paper Mills Limited - India
- Australian Coal Association
- Bhoruka Overseas - Indonesia
- Intertek Mineral Services - Indonesia
- Kartika Selabumi Mining - Indonesia
- South Luzon Thermal Energy Corporation
- Globalindo Alam Lestari - Indonesia
- Vizag Seaport Private Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Singapore Mercantile Exchange
- Ambuja Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bangladesh Power Developement Board
- Eastern Energy - Thailand
- Energy Development Corp, Philippines
- Salva Resources Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Rio Tinto Coal - Australia
- Madhucon Powers Ltd - India
- Medco Energi Mining Internasional
- Coalindo Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Meralco Power Generation, Philippines
- PTC India Limited - India
- Alfred C Toepfer International GmbH - Germany
- Trasteel International SA, Italy
- Borneo Indobara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Africa Commodities Group - South Africa
- Ind-Barath Power Infra Limited - India
- Semirara Mining Corp, Philippines
- Energy Link Ltd, New Zealand
- Grasim Industreis Ltd - India
- Therma Luzon, Inc, Philippines
- CNBM International Corporation - China
- Siam City Cement PLC, Thailand
- Commonwealth Bank - Australia
- India Bulls Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Ministry of Mines - Canada
- Independent Power Producers Association of India
- Renaissance Capital - South Africa
- Mercator Lines Limited - India
- Oldendorff Carriers - Singapore
- Siam City Cement - Thailand
- PowerSource Philippines DevCo
- Vedanta Resources Plc - India
- Jindal Steel & Power Ltd - India
- San Jose City I Power Corp, Philippines
- Sree Jayajothi Cements Limited - India
- IHS Mccloskey Coal Group - USA
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Transport, Egypt
- Coastal Gujarat Power Limited - India
- The University of Queensland
- Marubeni Corporation - India
- LBH Netherlands Bv - Netherlands
- Ceylon Electricity Board - Sri Lanka
- Uttam Galva Steels Limited - India
- Miang Besar Coal Terminal - Indonesia
- Banpu Public Company Limited - Thailand
- Malabar Cements Ltd - India
- Chamber of Mines of South Africa
- Posco Energy - South Korea
- Asmin Koalindo Tuhup - Indonesia
- Bharathi Cement Corporation - India
- Interocean Group of Companies - India
- Attock Cement Pakistan Limited
- Minerals Council of Australia
- Bahari Cakrawala Sebuku - Indonesia
- Mjunction Services Limited - India
- Orica Australia Pty. Ltd.
- Bhushan Steel Limited - India
- Altura Mining Limited, Indonesia
- Semirara Mining and Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- GVK Power & Infra Limited - India
- Binh Thuan Hamico - Vietnam
- Mintek Dendrill Indonesia
- Formosa Plastics Group - Taiwan
- Makarim & Taira - Indonesia
- Indika Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Central Java Power - Indonesia
- Sakthi Sugars Limited - India
- Heidelberg Cement - Germany
- Gujarat Electricity Regulatory Commission - India
- Price Waterhouse Coopers - Russia
- Pendopo Energi Batubara - Indonesia
- Sarangani Energy Corporation, Philippines
- Kumho Petrochemical, South Korea
- Cigading International Bulk Terminal - Indonesia
- Bulk Trading Sa - Switzerland
- Gujarat Mineral Development Corp Ltd - India
- SMG Consultants - Indonesia
- Metalloyd Limited - United Kingdom
- Videocon Industries ltd - India
- IEA Clean Coal Centre - UK
- Kobexindo Tractors - Indoneisa
- Timah Investasi Mineral - Indoneisa
- Goldman Sachs - Singapore
- Lanco Infratech Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Straits Asia Resources Limited - Singapore
- Indian Energy Exchange, India
- Larsen & Toubro Limited - India
- SMC Global Power, Philippines
- Chettinad Cement Corporation Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Essar Steel Hazira Ltd - India
- GAC Shipping (India) Pvt Ltd
- Thiess Contractors Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Kapuas Tunggal Persada - Indonesia
- Barasentosa Lestari - Indonesia
- Billiton Holdings Pty Ltd - Australia
- GN Power Mariveles Coal Plant, Philippines
- Rashtriya Ispat Nigam Limited - India
- Parry Sugars Refinery, India
- Petrochimia International Co. Ltd.- Taiwan
- Georgia Ports Authority, United States
- Central Electricity Authority - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Antam Resourcindo - Indonesia
- Romanian Commodities Exchange
- Edison Trading Spa - Italy
- Aboitiz Power Corporation - Philippines
- White Energy Company Limited
- Maharashtra Electricity Regulatory Commission - India
- Cement Manufacturers Association - India
- Parliament of New Zealand
- Directorate Of Revenue Intelligence - India
- Manunggal Multi Energi - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Dalmia Cement Bharat India
- PetroVietnam Power Coal Import and Supply Company
- Thai Mozambique Logistica
- ASAPP Information Group - India
- Jaiprakash Power Ventures ltd
- Global Green Power PLC Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Agrawal Coal Company - India
- Coal and Oil Company - UAE
- Sindya Power Generating Company Private Ltd
- Sical Logistics Limited - India
- Anglo American - United Kingdom
- European Bulk Services B.V. - Netherlands
- Global Coal Blending Company Limited - Australia
- Riau Bara Harum - Indonesia
- Savvy Resources Ltd - HongKong
- CIMB Investment Bank - Malaysia
- Port Waratah Coal Services - Australia
- ICICI Bank Limited - India
- London Commodity Brokers - England
- Aditya Birla Group - India
- Kideco Jaya Agung - Indonesia
- Bukit Makmur.PT - Indonesia
- Indonesian Coal Mining Association
- Latin American Coal - Colombia
- Carbofer General Trading SA - India
- Vijayanagar Sugar Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- PNOC Exploration Corporation - Philippines
- SN Aboitiz Power Inc, Philippines
- Tamil Nadu electricity Board
- The State Trading Corporation of India Ltd
- Economic Council, Georgia
- Directorate General of MIneral and Coal - Indonesia
- Electricity Authority, New Zealand
- GMR Energy Limited - India
- Deloitte Consulting - India
- Sojitz Corporation - Japan
- Australian Commodity Traders Exchange
- Samtan Co., Ltd - South Korea
- Ministry of Finance - Indonesia
- TeaM Sual Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
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