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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, 29 July 20
2019 U.S. COAL PRODUCTION FALLS TO ITS LOWEST LEVEL SINCE 1978 - EIA
In 2019, U.S. coal production totaled 706 million short tons (MMst), a 7% decrease from the 756 MMst mined in 2018. Last year’s production wa ...
Wednesday, 29 July 20
MARKET INSIGHT - INTERMODAL
The dry bulk sector is beginning to recover from reduced SnP activity recorded in the first quarter of 2020. The table below illustrates that appro ...
Tuesday, 28 July 20
DEUTSCHE BANK TO END GLOBAL BUSINESS ACTIVITIES IN COAL MINING BY 2025 - REUTERS
Deutsche Bank, in a revamp of its policies for fossil fuels, said on Monday that it would end business activities worldwide related to coal mining ...
Monday, 27 July 20
IEEFA ENERGY FINANCE CONFERENCE 2020: COAL, LNG, PETROCHEMICAL SECTORS FACE POOR OUTLOOK AND UPHILL BATTLE FOR INVESTORS
Fossil fuel industries were becoming less financially attractive even before the global coronavirus pandemic
Three major fossil fuel ...
Friday, 24 July 20
IPA: THERMAL COAL IMPORTS AT MAJOR PORTS DECLINE 35 PC TO 17.71 MT IN APR TO JUNE - ECONOMIC TIMES
These ports had handled 27.13 MT of thermal coal and 14.95 MT of coking coal in the April-June period of the previous financial year
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- Indo Tambangraya Megah - Indonesia
- Aditya Birla Group - India
- Georgia Ports Authority, United States
- The State Trading Corporation of India Ltd
- Renaissance Capital - South Africa
- McConnell Dowell - Australia
- Mercuria Energy - Indonesia
- Altura Mining Limited, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- GAC Shipping (India) Pvt Ltd
- Star Paper Mills Limited - India
- Pendopo Energi Batubara - Indonesia
- Globalindo Alam Lestari - Indonesia
- Ind-Barath Power Infra Limited - India
- Agrawal Coal Company - India
- Gujarat Mineral Development Corp Ltd - India
- Power Finance Corporation Ltd., India
- Anglo American - United Kingdom
- Economic Council, Georgia
- Oldendorff Carriers - Singapore
- Bhatia International Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Ceylon Electricity Board - Sri Lanka
- Price Waterhouse Coopers - Russia
- Xindia Steels Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhoruka Overseas - Indonesia
- Edison Trading Spa - Italy
- Riau Bara Harum - Indonesia
- Global Business Power Corporation, Philippines
- Australian Coal Association
- Indian Energy Exchange, India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Metalloyd Limited - United Kingdom
- MS Steel International - UAE
- Ministry of Finance - Indonesia
- Latin American Coal - Colombia
- OPG Power Generation Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Tata Chemicals Ltd - India
- Thiess Contractors Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PNOC Exploration Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Gujarat Sidhee Cement - India
- Salva Resources Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Barasentosa Lestari - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Kumho Petrochemical, South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Semirara Mining Corp, Philippines
- Siam City Cement - Thailand
- Indonesian Coal Mining Association
- Tamil Nadu electricity Board
- Samtan Co., Ltd - South Korea
- Uttam Galva Steels Limited - India
- Toyota Tsusho Corporation, Japan
- Chamber of Mines of South Africa
- Global Green Power PLC Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Kohat Cement Company Ltd. - Pakistan
- Deloitte Consulting - India
- Videocon Industries ltd - India
- Romanian Commodities Exchange
- Electricity Generating Authority of Thailand
- Bukit Makmur.PT - Indonesia
- Mjunction Services Limited - India
- Sojitz Corporation - Japan
- Malabar Cements Ltd - India
- Essar Steel Hazira Ltd - India
- Formosa Plastics Group - Taiwan
- Kideco Jaya Agung - Indonesia
- Bayan Resources Tbk. - Indonesia
- Bhushan Steel Limited - India
- Sindya Power Generating Company Private Ltd
- Heidelberg Cement - Germany
- Coastal Gujarat Power Limited - India
- Coalindo Energy - Indonesia
- GVK Power & Infra Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Trasteel International SA, Italy
- Intertek Mineral Services - Indonesia
- PTC India Limited - India
- IEA Clean Coal Centre - UK
- Jorong Barutama Greston.PT - Indonesia
- Chettinad Cement Corporation Ltd - India
- Billiton Holdings Pty Ltd - Australia
- GMR Energy Limited - India
- Bukit Baiduri Energy - Indonesia
- Interocean Group of Companies - India
- Neyveli Lignite Corporation Ltd, - India
- Orica Mining Services - Indonesia
- Central Electricity Authority - India
- International Coal Ventures Pvt Ltd - India
- Sical Logistics Limited - India
- IHS Mccloskey Coal Group - USA
- ASAPP Information Group - India
- Directorate Of Revenue Intelligence - India
- Maheswari Brothers Coal Limited - India
- Parry Sugars Refinery, India
- Meralco Power Generation, Philippines
- San Jose City I Power Corp, Philippines
- Indogreen Group - Indonesia
- Bharathi Cement Corporation - India
- Antam Resourcindo - Indonesia
- The Treasury - Australian Government
- Maharashtra Electricity Regulatory Commission - India
- Parliament of New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Transport, Egypt
- Energy Development Corp, Philippines
- Goldman Sachs - Singapore
- Holcim Trading Pte Ltd - Singapore
- Ambuja Cements Ltd - India
- Karaikal Port Pvt Ltd - India
- Medco Energi Mining Internasional
- Directorate General of MIneral and Coal - Indonesia
- Dalmia Cement Bharat India
- Vizag Seaport Private Limited - India
- Makarim & Taira - Indonesia
- Sakthi Sugars Limited - India
- Alfred C Toepfer International GmbH - Germany
- Posco Energy - South Korea
- Sree Jayajothi Cements Limited - India
- Semirara Mining and Power Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Vedanta Resources Plc - India
- Siam City Cement PLC, Thailand
- Africa Commodities Group - South Africa
- TeaM Sual Corporation - Philippines
- SMG Consultants - Indonesia
- Coal and Oil Company - UAE
- Indika Energy - Indonesia
- CNBM International Corporation - China
- Borneo Indobara - Indonesia
- Orica Australia Pty. Ltd.
- SN Aboitiz Power Inc, Philippines
- Marubeni Corporation - India
- Commonwealth Bank - Australia
- VISA Power Limited - India
- Larsen & Toubro Limited - India
- Rio Tinto Coal - Australia
- GN Power Mariveles Coal Plant, Philippines
- Carbofer General Trading SA - India
- Therma Luzon, Inc, Philippines
- Petron Corporation, Philippines
- Cement Manufacturers Association - India
- Mercator Lines Limited - India
- Grasim Industreis Ltd - India
- Attock Cement Pakistan Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- Rashtriya Ispat Nigam Limited - India
- Bangladesh Power Developement Board
- Port Waratah Coal Services - Australia
- PowerSource Philippines DevCo
- Planning Commission, India
- Lanco Infratech Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Jaiprakash Power Ventures ltd
- AsiaOL BioFuels Corp., Philippines
- Central Java Power - Indonesia
- Energy Link Ltd, New Zealand
- PetroVietnam Power Coal Import and Supply Company
- Standard Chartered Bank - UAE
- Jindal Steel & Power Ltd - India
- Global Coal Blending Company Limited - Australia
- SMC Global Power, Philippines
- Thai Mozambique Logistica
- Cigading International Bulk Terminal - Indonesia
- Indian Oil Corporation Limited
- Iligan Light & Power Inc, Philippines
- Eastern Coal Council - USA
- Krishnapatnam Port Company Ltd. - India
- Kapuas Tunggal Persada - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Bank of Tokyo Mitsubishi UFJ Ltd
- Binh Thuan Hamico - Vietnam
- Straits Asia Resources Limited - Singapore
- Aboitiz Power Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- London Commodity Brokers - England
- Madhucon Powers Ltd - India
- CIMB Investment Bank - Malaysia
- Kalimantan Lumbung Energi - Indonesia
- The University of Queensland
- Sarangani Energy Corporation, Philippines
- ICICI Bank Limited - India
- Ministry of Mines - Canada
- Kaltim Prima Coal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Kobexindo Tractors - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Savvy Resources Ltd - HongKong
- Banpu Public Company Limited - Thailand
- Wood Mackenzie - Singapore
- Wilmar Investment Holdings
- Baramulti Group, Indonesia
- South Luzon Thermal Energy Corporation
- Independent Power Producers Association of India
- New Zealand Coal & Carbon
- Eastern Energy - Thailand
- Electricity Authority, New Zealand
- Minerals Council of Australia
- Mintek Dendrill Indonesia
- India Bulls Power Limited - India
- Meenaskhi Energy Private Limited - India
- Singapore Mercantile Exchange
- Timah Investasi Mineral - Indoneisa
- White Energy Company Limited
- Gujarat Electricity Regulatory Commission - India
- Merrill Lynch Commodities Europe
- Australian Commodity Traders Exchange
- Bukit Asam (Persero) Tbk - Indonesia
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