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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, 09 November 23
GREEK AND CHINESE COMPANIES OWN 34% OF THE GLOBAL FLEET’S CARGO CAPACITY - BIMCO
“The global fleet of cargo carrying ships consists of around 61,000 ships with a deadweight capacity of about 2,200 million tonnes. The ships ...
Monday, 23 October 23
CHINA SEPT COAL OUTPUT HITS SIX-MONTH HIGH ON RISING POWER DEMAND - REUTERS
China’s September coal output rose 0.4% from August to the highest level since March, official data showed on Wednesday, on rising power dema ...
Monday, 23 October 23
INDIA COAL INVENTORIES DROP AT FASTEST PACE IN TWO YEARS, BOOSTING IMPORTS - REUTERS
Coal inventories at Indian power plants in the first half of October fell at their fastest rate in two years, an analysis of government data showed ...
Tuesday, 19 September 23
LNG SHIPPING STOCKS: THE ASIAN GROWTH UP-INDICES
Last week, the UP World LNG Shipping Index (UPI) gained 3.81 points or 2.51%, closing at 155.85 points. This index tracks the performance of LNG sh ...
Sunday, 10 September 23
GOLDMAN SACHS PREDICTS OIL PRICE TO HIT $100 ON OPEC CUTS - YAHOO FINANCE
Oil supply cuts by Saudi Arabia and Russia could lead to Brent crude jumping as high as $107 a barrel in 2024, Goldman Sachs Commodities Research h ...
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- Vedanta Resources Plc - India
- Power Finance Corporation Ltd., India
- Grasim Industreis Ltd - India
- Wilmar Investment Holdings
- Siam City Cement PLC, Thailand
- Trasteel International SA, Italy
- Maheswari Brothers Coal Limited - India
- Holcim Trading Pte Ltd - Singapore
- Aboitiz Power Corporation - Philippines
- Global Business Power Corporation, Philippines
- New Zealand Coal & Carbon
- Agrawal Coal Company - India
- Xindia Steels Limited - India
- Banpu Public Company Limited - Thailand
- Singapore Mercantile Exchange
- Parry Sugars Refinery, India
- OPG Power Generation Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Deloitte Consulting - India
- Kepco SPC Power Corporation, Philippines
- Posco Energy - South Korea
- Meralco Power Generation, Philippines
- San Jose City I Power Corp, Philippines
- Interocean Group of Companies - India
- Ministry of Transport, Egypt
- Carbofer General Trading SA - India
- Samtan Co., Ltd - South Korea
- Aditya Birla Group - India
- ASAPP Information Group - India
- Iligan Light & Power Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Mintek Dendrill Indonesia
- Therma Luzon, Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Bulk Trading Sa - Switzerland
- India Bulls Power Limited - India
- White Energy Company Limited
- Tamil Nadu electricity Board
- Intertek Mineral Services - Indonesia
- Borneo Indobara - Indonesia
- VISA Power Limited - India
- Indika Energy - Indonesia
- GVK Power & Infra Limited - India
- Renaissance Capital - South Africa
- Electricity Generating Authority of Thailand
- Videocon Industries ltd - India
- Larsen & Toubro Limited - India
- Barasentosa Lestari - Indonesia
- Kideco Jaya Agung - Indonesia
- Semirara Mining Corp, Philippines
- Energy Development Corp, Philippines
- SMC Global Power, Philippines
- Dalmia Cement Bharat India
- Antam Resourcindo - Indonesia
- LBH Netherlands Bv - Netherlands
- Neyveli Lignite Corporation Ltd, - India
- Rio Tinto Coal - Australia
- TeaM Sual Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Ministry of Mines - Canada
- Ambuja Cements Ltd - India
- Mjunction Services Limited - India
- Kumho Petrochemical, South Korea
- Mercator Lines Limited - India
- Standard Chartered Bank - UAE
- Wood Mackenzie - Singapore
- Salva Resources Pvt Ltd - India
- London Commodity Brokers - England
- Goldman Sachs - Singapore
- Chettinad Cement Corporation Ltd - India
- Madhucon Powers Ltd - India
- Ministry of Finance - Indonesia
- Eastern Energy - Thailand
- SN Aboitiz Power Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Vizag Seaport Private Limited - India
- Toyota Tsusho Corporation, Japan
- Simpson Spence & Young - Indonesia
- Heidelberg Cement - Germany
- Globalindo Alam Lestari - Indonesia
- CNBM International Corporation - China
- International Coal Ventures Pvt Ltd - India
- Tata Chemicals Ltd - India
- Parliament of New Zealand
- Billiton Holdings Pty Ltd - Australia
- Anglo American - United Kingdom
- Riau Bara Harum - Indonesia
- Sarangani Energy Corporation, Philippines
- Metalloyd Limited - United Kingdom
- ICICI Bank Limited - India
- Altura Mining Limited, Indonesia
- GMR Energy Limited - India
- Minerals Council of Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Cement Manufacturers Association - India
- Indian Energy Exchange, India
- Chamber of Mines of South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Global Coal Blending Company Limited - Australia
- Romanian Commodities Exchange
- Energy Link Ltd, New Zealand
- Coal and Oil Company - UAE
- Global Green Power PLC Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- The State Trading Corporation of India Ltd
- South Luzon Thermal Energy Corporation
- Thai Mozambique Logistica
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The Treasury - Australian Government
- Medco Energi Mining Internasional
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PTC India Limited - India
- Straits Asia Resources Limited - Singapore
- Cigading International Bulk Terminal - Indonesia
- Bhatia International Limited - India
- IHS Mccloskey Coal Group - USA
- Petron Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Gujarat Electricity Regulatory Commission - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Siam City Cement - Thailand
- PowerSource Philippines DevCo
- Kartika Selabumi Mining - Indonesia
- Jindal Steel & Power Ltd - India
- Australian Coal Association
- PNOC Exploration Corporation - Philippines
- Baramulti Group, Indonesia
- Orica Mining Services - Indonesia
- Sree Jayajothi Cements Limited - India
- Karaikal Port Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Sical Logistics Limited - India
- Oldendorff Carriers - Singapore
- Sojitz Corporation - Japan
- Leighton Contractors Pty Ltd - Australia
- Bharathi Cement Corporation - India
- Planning Commission, India
- Lanco Infratech Ltd - India
- Commonwealth Bank - Australia
- Australian Commodity Traders Exchange
- Krishnapatnam Port Company Ltd. - India
- Karbindo Abesyapradhi - Indoneisa
- Latin American Coal - Colombia
- Semirara Mining and Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- Star Paper Mills Limited - India
- Thiess Contractors Indonesia
- Miang Besar Coal Terminal - Indonesia
- Port Waratah Coal Services - Australia
- Central Electricity Authority - India
- Orica Australia Pty. Ltd.
- Kalimantan Lumbung Energi - Indonesia
- Africa Commodities Group - South Africa
- Vijayanagar Sugar Pvt Ltd - India
- The University of Queensland
- Price Waterhouse Coopers - Russia
- Asmin Koalindo Tuhup - Indonesia
- Sindya Power Generating Company Private Ltd
- CIMB Investment Bank - Malaysia
- Central Java Power - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Meenaskhi Energy Private Limited - India
- Rashtriya Ispat Nigam Limited - India
- GAC Shipping (India) Pvt Ltd
- Jorong Barutama Greston.PT - Indonesia
- Makarim & Taira - Indonesia
- Indogreen Group - Indonesia
- Kaltim Prima Coal - Indonesia
- IEA Clean Coal Centre - UK
- Kapuas Tunggal Persada - Indonesia
- MS Steel International - UAE
- Indo Tambangraya Megah - Indonesia
- Bhushan Steel Limited - India
- Malabar Cements Ltd - India
- Electricity Authority, New Zealand
- Binh Thuan Hamico - Vietnam
- Coalindo Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Sinarmas Energy and Mining - Indonesia
- Bangladesh Power Developement Board
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Sidhee Cement - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Economic Council, Georgia
- European Bulk Services B.V. - Netherlands
- Sakthi Sugars Limited - India
- Bhoruka Overseas - Indonesia
- Independent Power Producers Association of India
- Georgia Ports Authority, United States
- Indonesian Coal Mining Association
- Marubeni Corporation - India
- Directorate Of Revenue Intelligence - India
- Uttam Galva Steels Limited - India
- Bayan Resources Tbk. - Indonesia
- Edison Trading Spa - Italy
- Mercuria Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Kohat Cement Company Ltd. - Pakistan
- Jaiprakash Power Ventures ltd
- SMG Consultants - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Eastern Coal Council - USA
- Bukit Baiduri Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- McConnell Dowell - Australia
- Manunggal Multi Energi - Indonesia
- Indian Oil Corporation Limited
- Savvy Resources Ltd - HongKong
- Gujarat Mineral Development Corp Ltd - India
- Timah Investasi Mineral - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Pendopo Energi Batubara - Indonesia
- Attock Cement Pakistan Limited
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