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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, 15 July 20
MARKET INSIGHT - INTERMODAL
The Covid-19 virus spread around the world has obviously impacted the global oil demand while the situation remains fluid. The overall constraint ...
Tuesday, 14 July 20
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The index, released by China ...
Tuesday, 14 July 20
TURKEY - A CASE OF UNDECLARED BUNKER - GARD
KNOWLEDGE TO ELEVATE
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Monday, 13 July 20
PANAMAX: A TUMULTUOUS WEEK IN THE PANAMAX MARKET ENSURED ALL MARKETS GAINED VALUE ON THE WEEK - BALTIC BRIEFING
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Friday, 10 July 20
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - XINHUA
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
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- Energy Link Ltd, New Zealand
- Carbofer General Trading SA - India
- Coalindo Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Samtan Co., Ltd - South Korea
- McConnell Dowell - Australia
- Malabar Cements Ltd - India
- Kaltim Prima Coal - Indonesia
- Sarangani Energy Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Tata Chemicals Ltd - India
- MS Steel International - UAE
- Kohat Cement Company Ltd. - Pakistan
- GVK Power & Infra Limited - India
- Merrill Lynch Commodities Europe
- Kepco SPC Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Directorate General of MIneral and Coal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Energy Development Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Sical Logistics Limited - India
- Siam City Cement PLC, Thailand
- Eastern Coal Council - USA
- Meenaskhi Energy Private Limited - India
- Kapuas Tunggal Persada - Indonesia
- Wilmar Investment Holdings
- PowerSource Philippines DevCo
- Thiess Contractors Indonesia
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- Alfred C Toepfer International GmbH - Germany
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- Parry Sugars Refinery, India
- Parliament of New Zealand
- Edison Trading Spa - Italy
- Bhoruka Overseas - Indonesia
- Metalloyd Limited - United Kingdom
- Gujarat Electricity Regulatory Commission - India
- Neyveli Lignite Corporation Ltd, - India
- Banpu Public Company Limited - Thailand
- Jorong Barutama Greston.PT - Indonesia
- CNBM International Corporation - China
- London Commodity Brokers - England
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- Leighton Contractors Pty Ltd - Australia
- Orica Mining Services - Indonesia
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- Thai Mozambique Logistica
- Medco Energi Mining Internasional
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- Intertek Mineral Services - Indonesia
- CIMB Investment Bank - Malaysia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Timah Investasi Mineral - Indoneisa
- Wood Mackenzie - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Australian Commodity Traders Exchange
- Siam City Cement - Thailand
- Deloitte Consulting - India
- Australian Coal Association
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bharathi Cement Corporation - India
- The University of Queensland
- Global Coal Blending Company Limited - Australia
- LBH Netherlands Bv - Netherlands
- Directorate Of Revenue Intelligence - India
- Vizag Seaport Private Limited - India
- Toyota Tsusho Corporation, Japan
- Central Electricity Authority - India
- European Bulk Services B.V. - Netherlands
- Petrochimia International Co. Ltd.- Taiwan
- White Energy Company Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Cement Manufacturers Association - India
- Indian Energy Exchange, India
- Antam Resourcindo - Indonesia
- Aboitiz Power Corporation - Philippines
- Renaissance Capital - South Africa
- Sakthi Sugars Limited - India
- IEA Clean Coal Centre - UK
- Grasim Industreis Ltd - India
- Bulk Trading Sa - Switzerland
- PTC India Limited - India
- Bhatia International Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- Planning Commission, India
- Romanian Commodities Exchange
- Coastal Gujarat Power Limited - India
- GAC Shipping (India) Pvt Ltd
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- Vijayanagar Sugar Pvt Ltd - India
- Africa Commodities Group - South Africa
- Jindal Steel & Power Ltd - India
- Mintek Dendrill Indonesia
- Uttam Galva Steels Limited - India
- Ministry of Transport, Egypt
- Anglo American - United Kingdom
- Sojitz Corporation - Japan
- Trasteel International SA, Italy
- Global Business Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
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- GMR Energy Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Lanco Infratech Ltd - India
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- PetroVietnam Power Coal Import and Supply Company
- SMG Consultants - Indonesia
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- Orica Australia Pty. Ltd.
- Electricity Authority, New Zealand
- Chamber of Mines of South Africa
- Minerals Council of Australia
- Mercator Lines Limited - India
- The Treasury - Australian Government
- Agrawal Coal Company - India
- Gujarat Sidhee Cement - India
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- Kumho Petrochemical, South Korea
- Ambuja Cements Ltd - India
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- Borneo Indobara - Indonesia
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- Salva Resources Pvt Ltd - India
- Singapore Mercantile Exchange
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- Rashtriya Ispat Nigam Limited - India
- Indonesian Coal Mining Association
- Goldman Sachs - Singapore
- Bukit Baiduri Energy - Indonesia
- Meralco Power Generation, Philippines
- Jaiprakash Power Ventures ltd
- SMC Global Power, Philippines
- Barasentosa Lestari - Indonesia
- Standard Chartered Bank - UAE
- SN Aboitiz Power Inc, Philippines
- Bangladesh Power Developement Board
- Posco Energy - South Korea
- Binh Thuan Hamico - Vietnam
- VISA Power Limited - India
- Indo Tambangraya Megah - Indonesia
- Georgia Ports Authority, United States
- Power Finance Corporation Ltd., India
- Asmin Koalindo Tuhup - Indonesia
- Bukit Makmur.PT - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Kobexindo Tractors - Indoneisa
- Economic Council, Georgia
- GN Power Mariveles Coal Plant, Philippines
- Dalmia Cement Bharat India
- San Jose City I Power Corp, Philippines
- Simpson Spence & Young - Indonesia
- Riau Bara Harum - Indonesia
- Chettinad Cement Corporation Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Price Waterhouse Coopers - Russia
- Bhushan Steel Limited - India
- Videocon Industries ltd - India
- Rio Tinto Coal - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Interocean Group of Companies - India
- Mjunction Services Limited - India
- Globalindo Alam Lestari - Indonesia
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- Essar Steel Hazira Ltd - India
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- Coal and Oil Company - UAE
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- Savvy Resources Ltd - HongKong
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- Madhucon Powers Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Sindya Power Generating Company Private Ltd
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- Maheswari Brothers Coal Limited - India
- Bayan Resources Tbk. - Indonesia
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