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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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Friday, 10 July 20
GLOBAL SHIPPING EARNINGS FORECAST CUT AS SUPPLY SET TO OUTSTRIP DEMAND - MOODY'S
EBITDA forecast worsens, keeping outlook negative. We now expect the aggregate EBITDA of rated shipping companies to fall by around 16%-18% in 2020 ...
Friday, 10 July 20
SLOW RECOVERY IN TANKER RATES TO WEIGH ON BUANA LINTAS LAUTAN - FITCH RATINGS
Fitch Ratings believes that international tanker rates are likely improve after their sharp fall since May 2020, albeit at a slow pace. The weaknes ...
Wednesday, 08 July 20
MARKET INSIGHT - INTERMODAL
During the previous month, the dry bulk market witnessed an impressive increase in the BDI index that has reached 1800 points from 500 with a clear ...
Tuesday, 07 July 20
COAL INDIA WORKERS STRIKE CUTS OUTPUT BY 56%: OFFICIAL - REUTERS
A strike at Coal India Ltd cut production by 56% in the three days ending July 4 as workers oppose opening up coal mining to the private sector, a ...
Tuesday, 07 July 20
WHAT DOES THE PATHWAY TO A NET-ZERO ECONOMY LOOK LIKE FOR MINERS? - WOOD MACKENZIE
Wind, solar, electric vehicles, stationary storage and transmission are all central to achieving the Paris Agreement decarbonisation goals.
&nb ...
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- Karbindo Abesyapradhi - Indoneisa
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- Cement Manufacturers Association - India
- AsiaOL BioFuels Corp., Philippines
- Agrawal Coal Company - India
- Coal and Oil Company - UAE
- Vizag Seaport Private Limited - India
- Parry Sugars Refinery, India
- Ambuja Cements Ltd - India
- Sojitz Corporation - Japan
- San Jose City I Power Corp, Philippines
- European Bulk Services B.V. - Netherlands
- Singapore Mercantile Exchange
- Ind-Barath Power Infra Limited - India
- International Coal Ventures Pvt Ltd - India
- Central Electricity Authority - India
- PTC India Limited - India
- Star Paper Mills Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Parliament of New Zealand
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- Jindal Steel & Power Ltd - India
- White Energy Company Limited
- TeaM Sual Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Jaiprakash Power Ventures ltd
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- Rashtriya Ispat Nigam Limited - India
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- Bulk Trading Sa - Switzerland
- Ministry of Finance - Indonesia
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- Altura Mining Limited, Indonesia
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- Gujarat Sidhee Cement - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Global Coal Blending Company Limited - Australia
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- Merrill Lynch Commodities Europe
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- Port Waratah Coal Services - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Oldendorff Carriers - Singapore
- Global Green Power PLC Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Eastern Coal Council - USA
- Directorate Of Revenue Intelligence - India
- Kohat Cement Company Ltd. - Pakistan
- Savvy Resources Ltd - HongKong
- Anglo American - United Kingdom
- Posco Energy - South Korea
- Leighton Contractors Pty Ltd - Australia
- Thiess Contractors Indonesia
- Georgia Ports Authority, United States
- SMC Global Power, Philippines
- Pendopo Energi Batubara - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Carbofer General Trading SA - India
- Coastal Gujarat Power Limited - India
- Samtan Co., Ltd - South Korea
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- Intertek Mineral Services - Indonesia
- Lanco Infratech Ltd - India
- India Bulls Power Limited - India
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- The State Trading Corporation of India Ltd
- Maheswari Brothers Coal Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Kaltim Prima Coal - Indonesia
- Indika Energy - Indonesia
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- PNOC Exploration Corporation - Philippines
- Uttam Galva Steels Limited - India
- Baramulti Group, Indonesia
- Petron Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Mintek Dendrill Indonesia
- Ministry of Mines - Canada
- Essar Steel Hazira Ltd - India
- Indonesian Coal Mining Association
- Bhatia International Limited - India
- Billiton Holdings Pty Ltd - Australia
- Australian Commodity Traders Exchange
- Sarangani Energy Corporation, Philippines
- Meralco Power Generation, Philippines
- Bangladesh Power Developement Board
- IEA Clean Coal Centre - UK
- Timah Investasi Mineral - Indoneisa
- Karaikal Port Pvt Ltd - India
- Borneo Indobara - Indonesia
- Independent Power Producers Association of India
- Bharathi Cement Corporation - India
- Sical Logistics Limited - India
- Electricity Authority, New Zealand
- Madhucon Powers Ltd - India
- ASAPP Information Group - India
- Vijayanagar Sugar Pvt Ltd - India
- SMG Consultants - Indonesia
- GMR Energy Limited - India
- Marubeni Corporation - India
- Commonwealth Bank - Australia
- GVK Power & Infra Limited - India
- The Treasury - Australian Government
- PetroVietnam Power Coal Import and Supply Company
- Kepco SPC Power Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Tata Chemicals Ltd - India
- Antam Resourcindo - Indonesia
- Ministry of Transport, Egypt
- Kumho Petrochemical, South Korea
- Eastern Energy - Thailand
- Vedanta Resources Plc - India
- CNBM International Corporation - China
- Metalloyd Limited - United Kingdom
- Sree Jayajothi Cements Limited - India
- MS Steel International - UAE
- Chettinad Cement Corporation Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Xindia Steels Limited - India
- Indian Oil Corporation Limited
- Bhoruka Overseas - Indonesia
- VISA Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Banpu Public Company Limited - Thailand
- Ceylon Electricity Board - Sri Lanka
- Maharashtra Electricity Regulatory Commission - India
- Chamber of Mines of South Africa
- London Commodity Brokers - England
- Miang Besar Coal Terminal - Indonesia
- Toyota Tsusho Corporation, Japan
- Videocon Industries ltd - India
- The University of Queensland
- Attock Cement Pakistan Limited
- Romanian Commodities Exchange
- Gujarat Electricity Regulatory Commission - India
- Krishnapatnam Port Company Ltd. - India
- IHS Mccloskey Coal Group - USA
- PowerSource Philippines DevCo
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kapuas Tunggal Persada - Indonesia
- Interocean Group of Companies - India
- Africa Commodities Group - South Africa
- Jorong Barutama Greston.PT - Indonesia
- Economic Council, Georgia
- Aboitiz Power Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Grasim Industreis Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Formosa Plastics Group - Taiwan
- Energy Development Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Thai Mozambique Logistica
- Mercuria Energy - Indonesia
- Orica Australia Pty. Ltd.
- Simpson Spence & Young - Indonesia
- Malabar Cements Ltd - India
- Indogreen Group - Indonesia
- SN Aboitiz Power Inc, Philippines
- New Zealand Coal & Carbon
- Larsen & Toubro Limited - India
- Bhushan Steel Limited - India
- Holcim Trading Pte Ltd - Singapore
- Kartika Selabumi Mining - Indonesia
- Bukit Baiduri Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Siam City Cement - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Aditya Birla Group - India
- Kideco Jaya Agung - Indonesia
- Trasteel International SA, Italy
- Heidelberg Cement - Germany
- Medco Energi Mining Internasional
- Deloitte Consulting - India
- Renaissance Capital - South Africa
- Australian Coal Association
- Mercator Lines Limited - India
- Standard Chartered Bank - UAE
- Central Java Power - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- McConnell Dowell - Australia
- CIMB Investment Bank - Malaysia
- Salva Resources Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Indian Energy Exchange, India
- Tamil Nadu electricity Board
- Sindya Power Generating Company Private Ltd
- Indo Tambangraya Megah - Indonesia
- Sakthi Sugars Limited - India
- Alfred C Toepfer International GmbH - Germany
- Goldman Sachs - Singapore
- Energy Link Ltd, New Zealand
- Straits Asia Resources Limited - Singapore
- Global Business Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Kobexindo Tractors - Indoneisa
- ICICI Bank Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wilmar Investment Holdings
- Therma Luzon, Inc, Philippines
- Price Waterhouse Coopers - Russia
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- Electricity Generating Authority of Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Wood Mackenzie - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Makarim & Taira - Indonesia
- South Luzon Thermal Energy Corporation
- Edison Trading Spa - Italy
- Minerals Council of Australia
- Rio Tinto Coal - Australia
- Latin American Coal - Colombia
- Power Finance Corporation Ltd., India
- Mjunction Services Limited - India
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