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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, 01 July 20
MARKET INSIGHT - INTERMODAL
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Monday, 29 June 20
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For India, the coal demand indicators have clearly turned negative.
According to Argus Media, since the government declared a ...
Monday, 29 June 20
CHINA COAL IMPORT OUTLOOK: MANY MOVING PARTS, FORECAST TO FALL 10% YOY - GHEE PEH | IEEFA
China’s coal demand declined in the first quarter of 2020. According to the China National Coal Association, the country consumed 870mt in th ...
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- Global Green Power PLC Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Renaissance Capital - South Africa
- LBH Netherlands Bv - Netherlands
- Ind-Barath Power Infra Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Madhucon Powers Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Carbofer General Trading SA - India
- Bharathi Cement Corporation - India
- Mintek Dendrill Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Planning Commission, India
- Thai Mozambique Logistica
- South Luzon Thermal Energy Corporation
- Ambuja Cements Ltd - India
- Central Electricity Authority - India
- Kobexindo Tractors - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Wood Mackenzie - Singapore
- Sakthi Sugars Limited - India
- Sinarmas Energy and Mining - Indonesia
- London Commodity Brokers - England
- GVK Power & Infra Limited - India
- SMC Global Power, Philippines
- Gujarat Sidhee Cement - India
- ASAPP Information Group - India
- Bayan Resources Tbk. - Indonesia
- Eastern Coal Council - USA
- Minerals Council of Australia
- Jindal Steel & Power Ltd - India
- Kideco Jaya Agung - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- White Energy Company Limited
- Riau Bara Harum - Indonesia
- Bhushan Steel Limited - India
- Therma Luzon, Inc, Philippines
- McConnell Dowell - Australia
- Savvy Resources Ltd - HongKong
- Altura Mining Limited, Indonesia
- Samtan Co., Ltd - South Korea
- PowerSource Philippines DevCo
- Vedanta Resources Plc - India
- Posco Energy - South Korea
- Metalloyd Limited - United Kingdom
- Cement Manufacturers Association - India
- Vizag Seaport Private Limited - India
- Manunggal Multi Energi - Indonesia
- India Bulls Power Limited - India
- Malabar Cements Ltd - India
- Jaiprakash Power Ventures ltd
- Agrawal Coal Company - India
- Wilmar Investment Holdings
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Sarangani Energy Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Sindya Power Generating Company Private Ltd
- Power Finance Corporation Ltd., India
- Indian Energy Exchange, India
- Directorate General of MIneral and Coal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- Essar Steel Hazira Ltd - India
- Commonwealth Bank - Australia
- Global Coal Blending Company Limited - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Larsen & Toubro Limited - India
- Economic Council, Georgia
- Meralco Power Generation, Philippines
- Bhatia International Limited - India
- Bukit Baiduri Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- GMR Energy Limited - India
- Africa Commodities Group - South Africa
- Banpu Public Company Limited - Thailand
- Indonesian Coal Mining Association
- Energy Link Ltd, New Zealand
- TeaM Sual Corporation - Philippines
- IEA Clean Coal Centre - UK
- Vijayanagar Sugar Pvt Ltd - India
- Romanian Commodities Exchange
- Interocean Group of Companies - India
- Mjunction Services Limited - India
- Petron Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Deloitte Consulting - India
- Bulk Trading Sa - Switzerland
- Mercator Lines Limited - India
- Sree Jayajothi Cements Limited - India
- Grasim Industreis Ltd - India
- Trasteel International SA, Italy
- Barasentosa Lestari - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Videocon Industries ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Borneo Indobara - Indonesia
- Toyota Tsusho Corporation, Japan
- Central Java Power - Indonesia
- Baramulti Group, Indonesia
- Kalimantan Lumbung Energi - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Uttam Galva Steels Limited - India
- Energy Development Corp, Philippines
- Iligan Light & Power Inc, Philippines
- Thiess Contractors Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Star Paper Mills Limited - India
- Intertek Mineral Services - Indonesia
- Timah Investasi Mineral - Indoneisa
- Sical Logistics Limited - India
- Georgia Ports Authority, United States
- Port Waratah Coal Services - Australia
- Parry Sugars Refinery, India
- Pendopo Energi Batubara - Indonesia
- Indogreen Group - Indonesia
- San Jose City I Power Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sojitz Corporation - Japan
- Attock Cement Pakistan Limited
- Jorong Barutama Greston.PT - Indonesia
- Lanco Infratech Ltd - India
- Formosa Plastics Group - Taiwan
- European Bulk Services B.V. - Netherlands
- CNBM International Corporation - China
- Kapuas Tunggal Persada - Indonesia
- Tamil Nadu electricity Board
- Ministry of Finance - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Xindia Steels Limited - India
- Edison Trading Spa - Italy
- Coastal Gujarat Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- Standard Chartered Bank - UAE
- MS Steel International - UAE
- Bangladesh Power Developement Board
- Siam City Cement - Thailand
- Bhoruka Overseas - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Mercuria Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Simpson Spence & Young - Indonesia
- Marubeni Corporation - India
- Rio Tinto Coal - Australia
- Straits Asia Resources Limited - Singapore
- Holcim Trading Pte Ltd - Singapore
- Price Waterhouse Coopers - Russia
- Chamber of Mines of South Africa
- Coal and Oil Company - UAE
- SN Aboitiz Power Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Independent Power Producers Association of India
- Pipit Mutiara Jaya. PT, Indonesia
- Tata Chemicals Ltd - India
- GAC Shipping (India) Pvt Ltd
- SMG Consultants - Indonesia
- Goldman Sachs - Singapore
- AsiaOL BioFuels Corp., Philippines
- Semirara Mining Corp, Philippines
- Global Business Power Corporation, Philippines
- VISA Power Limited - India
- Antam Resourcindo - Indonesia
- Makarim & Taira - Indonesia
- PTC India Limited - India
- OPG Power Generation Pvt Ltd - India
- Orica Mining Services - Indonesia
- Heidelberg Cement - Germany
- Electricity Authority, New Zealand
- Singapore Mercantile Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dalmia Cement Bharat India
- Australian Commodity Traders Exchange
- Kumho Petrochemical, South Korea
- The Treasury - Australian Government
- Maheswari Brothers Coal Limited - India
- ICICI Bank Limited - India
- Chettinad Cement Corporation Ltd - India
- Indika Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Medco Energi Mining Internasional
- Indian Oil Corporation Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Krishnapatnam Port Company Ltd. - India
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- Aditya Birla Group - India
- Cigading International Bulk Terminal - Indonesia
- Anglo American - United Kingdom
- Oldendorff Carriers - Singapore
- The University of Queensland
- Salva Resources Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Parliament of New Zealand
- Alfred C Toepfer International GmbH - Germany
- Merrill Lynch Commodities Europe
- Karaikal Port Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Binh Thuan Hamico - Vietnam
- Coalindo Energy - Indonesia
- Latin American Coal - Colombia
- CIMB Investment Bank - Malaysia
- Australian Coal Association
- Electricity Generating Authority of Thailand
- Bukit Makmur.PT - Indonesia
- Ministry of Mines - Canada
- Ministry of Transport, Egypt
- Orica Australia Pty. Ltd.
- New Zealand Coal & Carbon
- Aboitiz Power Corporation - Philippines
- Eastern Energy - Thailand
- PNOC Exploration Corporation - Philippines
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