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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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Monday, 20 July 20
OIL PRICE OF $40-43 PER BARREL MORE OR LESS BALANCED - NOVAK | TASS
The Russian Ministry of Energy considers the current oil price of $40-43 per barrel more or less balanced and does not expect price changes after t ...
Monday, 20 July 20
SUPRAMAX: A 63,000 OPEN NORTH CHINA FIXING AN AUSTRALIAN ROUND IN THE LOW $10,000S - BALTIC BRIEFING
Capesize
The capesize market showed some resistance this week to recent losses as all routes saw a small uptick in value to end the week. With ...
Friday, 17 July 20
MISC MALAYSIA ENTERS INTO PURCHASE AGREEMENTS AND TIME CHARTER PARTIES FOR SIX VLECS
MISC Berhad (MISC) has entered into Memorandum of Agreements (MOAs) with six indirect wholly-owned subsidiaries of Zhejiang Satellite Petrochem ...
Wednesday, 15 July 20
HOW MEANINGFUL ARE SOME ESTIMATES FOR INDIA’S COAL CONSUMPTION DATA? - IEEFA
In recent years, BP's estimates for India have contained what appears to be a record of over-optimistic projections
BP’s a ...
Wednesday, 15 July 20
CHINA'S JUNE COAL IMPORTS FALL 6.7% Y/Y ON PORT CURBS - REUTERS
China’s coal imports dropped 6.7% in June from the same period last year, as stringent import restrictions at ports impeded purchases by trad ...
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- Jindal Steel & Power Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Price Waterhouse Coopers - Russia
- Simpson Spence & Young - Indonesia
- Antam Resourcindo - Indonesia
- Lanco Infratech Ltd - India
- Iligan Light & Power Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- GMR Energy Limited - India
- European Bulk Services B.V. - Netherlands
- PowerSource Philippines DevCo
- Kepco SPC Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Carbofer General Trading SA - India
- Power Finance Corporation Ltd., India
- Bukit Baiduri Energy - Indonesia
- Orica Mining Services - Indonesia
- Kumho Petrochemical, South Korea
- Global Coal Blending Company Limited - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Commonwealth Bank - Australia
- Makarim & Taira - Indonesia
- Tata Chemicals Ltd - India
- Indonesian Coal Mining Association
- TeaM Sual Corporation - Philippines
- Africa Commodities Group - South Africa
- VISA Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Jorong Barutama Greston.PT - Indonesia
- Chamber of Mines of South Africa
- Kapuas Tunggal Persada - Indonesia
- Bhatia International Limited - India
- PNOC Exploration Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Sidhee Cement - India
- Petron Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Kohat Cement Company Ltd. - Pakistan
- Global Green Power PLC Corporation, Philippines
- Rio Tinto Coal - Australia
- Indogreen Group - Indonesia
- Ind-Barath Power Infra Limited - India
- Holcim Trading Pte Ltd - Singapore
- Indian Oil Corporation Limited
- White Energy Company Limited
- Coal and Oil Company - UAE
- ASAPP Information Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Bharathi Cement Corporation - India
- Bahari Cakrawala Sebuku - Indonesia
- Sojitz Corporation - Japan
- Bhoruka Overseas - Indonesia
- Global Business Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Heidelberg Cement - Germany
- Xindia Steels Limited - India
- SMG Consultants - Indonesia
- Medco Energi Mining Internasional
- Formosa Plastics Group - Taiwan
- The Treasury - Australian Government
- Indo Tambangraya Megah - Indonesia
- Bulk Trading Sa - Switzerland
- Bangladesh Power Developement Board
- Altura Mining Limited, Indonesia
- Australian Commodity Traders Exchange
- Bukit Makmur.PT - Indonesia
- San Jose City I Power Corp, Philippines
- Larsen & Toubro Limited - India
- Independent Power Producers Association of India
- Mercator Lines Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SN Aboitiz Power Inc, Philippines
- Metalloyd Limited - United Kingdom
- PetroVietnam Power Coal Import and Supply Company
- The University of Queensland
- Central Electricity Authority - India
- IEA Clean Coal Centre - UK
- Globalindo Alam Lestari - Indonesia
- Sakthi Sugars Limited - India
- New Zealand Coal & Carbon
- Sree Jayajothi Cements Limited - India
- IHS Mccloskey Coal Group - USA
- GAC Shipping (India) Pvt Ltd
- Energy Development Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Wood Mackenzie - Singapore
- Indika Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Aditya Birla Group - India
- Sarangani Energy Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Uttam Galva Steels Limited - India
- Grasim Industreis Ltd - India
- Orica Australia Pty. Ltd.
- ICICI Bank Limited - India
- Interocean Group of Companies - India
- Leighton Contractors Pty Ltd - Australia
- Indian Energy Exchange, India
- Planning Commission, India
- Standard Chartered Bank - UAE
- South Luzon Thermal Energy Corporation
- AsiaOL BioFuels Corp., Philippines
- Posco Energy - South Korea
- LBH Netherlands Bv - Netherlands
- Electricity Generating Authority of Thailand
- Economic Council, Georgia
- Goldman Sachs - Singapore
- PTC India Limited - India
- Parry Sugars Refinery, India
- Marubeni Corporation - India
- Merrill Lynch Commodities Europe
- Port Waratah Coal Services - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ceylon Electricity Board - Sri Lanka
- CNBM International Corporation - China
- Barasentosa Lestari - Indonesia
- Samtan Co., Ltd - South Korea
- Cigading International Bulk Terminal - Indonesia
- MS Steel International - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- McConnell Dowell - Australia
- Parliament of New Zealand
- Kaltim Prima Coal - Indonesia
- Deloitte Consulting - India
- Timah Investasi Mineral - Indoneisa
- Sical Logistics Limited - India
- International Coal Ventures Pvt Ltd - India
- Central Java Power - Indonesia
- Aboitiz Power Corporation - Philippines
- Star Paper Mills Limited - India
- CIMB Investment Bank - Malaysia
- Ambuja Cements Ltd - India
- Agrawal Coal Company - India
- Electricity Authority, New Zealand
- Semirara Mining and Power Corporation, Philippines
- Siam City Cement PLC, Thailand
- Meenaskhi Energy Private Limited - India
- Romanian Commodities Exchange
- Straits Asia Resources Limited - Singapore
- Australian Coal Association
- Eastern Energy - Thailand
- Ministry of Finance - Indonesia
- Bhushan Steel Limited - India
- Georgia Ports Authority, United States
- Neyveli Lignite Corporation Ltd, - India
- Billiton Holdings Pty Ltd - Australia
- The State Trading Corporation of India Ltd
- Chettinad Cement Corporation Ltd - India
- Directorate Of Revenue Intelligence - India
- Salva Resources Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Manunggal Multi Energi - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Vizag Seaport Private Limited - India
- Videocon Industries ltd - India
- Riau Bara Harum - Indonesia
- Kideco Jaya Agung - Indonesia
- Mintek Dendrill Indonesia
- Directorate General of MIneral and Coal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Mines - Canada
- Attock Cement Pakistan Limited
- Sindya Power Generating Company Private Ltd
- Semirara Mining Corp, Philippines
- Mjunction Services Limited - India
- Oldendorff Carriers - Singapore
- Vedanta Resources Plc - India
- Eastern Coal Council - USA
- Savvy Resources Ltd - HongKong
- Pendopo Energi Batubara - Indonesia
- Therma Luzon, Inc, Philippines
- Renaissance Capital - South Africa
- Miang Besar Coal Terminal - Indonesia
- Dalmia Cement Bharat India
- Anglo American - United Kingdom
- Jaiprakash Power Ventures ltd
- Baramulti Group, Indonesia
- Madhucon Powers Ltd - India
- Energy Link Ltd, New Zealand
- London Commodity Brokers - England
- Asmin Koalindo Tuhup - Indonesia
- Edison Trading Spa - Italy
- Binh Thuan Hamico - Vietnam
- Malabar Cements Ltd - India
- Tamil Nadu electricity Board
- Latin American Coal - Colombia
- Wilmar Investment Holdings
- Rashtriya Ispat Nigam Limited - India
- Kobexindo Tractors - Indoneisa
- Coastal Gujarat Power Limited - India
- Mercuria Energy - Indonesia
- Minerals Council of Australia
- Singapore Mercantile Exchange
- Sinarmas Energy and Mining - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Bayan Resources Tbk. - Indonesia
- SMC Global Power, Philippines
- Thiess Contractors Indonesia
- Borneo Indobara - Indonesia
- Intertek Mineral Services - Indonesia
- Cement Manufacturers Association - India
- Krishnapatnam Port Company Ltd. - India
- Thai Mozambique Logistica
- GN Power Mariveles Coal Plant, Philippines
- Trasteel International SA, Italy
- Maheswari Brothers Coal Limited - India
- India Bulls Power Limited - India
- Ministry of Transport, Egypt
- Alfred C Toepfer International GmbH - Germany
- Meralco Power Generation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- GVK Power & Infra Limited - India
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