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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, 29 June 20
ULTRAMAX: A 58,000 FIXING DELIVERY SINGAPORE TRIP, VIA EAST COAST INDIA, REDELIVERY CHINA IN THE LOW $12,000S - BALTIC BRIEFING
Capesize
As the halfway mark of 2020 arrives, the capesize market is making new highs for the year. From persistent lows earlier caused by a ba ...
Saturday, 27 June 20
CHINA'S BENCHMARK POWER COAL PRICE REMAINS FLAT - XINHUA
China’s benchmark power coal price remained flat during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Friday, 26 June 20
WHAT TODAY'S BAILOUTS CAN DO FOR TOMORROW'S ECONOMIES - WORLD ECONOMIC FORUM
The COVID-19 crisis provides an opportunity for governments to build fairer, more sustainable and more resilient economies.
Governments a ...
Thursday, 25 June 20
ALL YOU WANT TO KNOW ABOUT COAL MINE AUCTIONS - THE HINDU BUSINESS LINE
Last week, Prime Minister Narendra Modi threw open the auction of 41 coal blocks for commercial mining. The decision, which was part of the announc ...
Wednesday, 24 June 20
MARKET INSIGHT - INTERMODAL
The World Bank estimates that the global economy will fall by 5.2% this year, underlining that the Covid-19 pandemic has had rapid and massive cons ...
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- Economic Council, Georgia
- European Bulk Services B.V. - Netherlands
- Energy Link Ltd, New Zealand
- SMG Consultants - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Electricity Generating Authority of Thailand
- Vedanta Resources Plc - India
- Neyveli Lignite Corporation Ltd, - India
- Bahari Cakrawala Sebuku - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Coal and Oil Company - UAE
- Salva Resources Pvt Ltd - India
- Star Paper Mills Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Singapore Mercantile Exchange
- Dalmia Cement Bharat India
- Karaikal Port Pvt Ltd - India
- Trasteel International SA, Italy
- White Energy Company Limited
- Global Coal Blending Company Limited - Australia
- Meenaskhi Energy Private Limited - India
- PNOC Exploration Corporation - Philippines
- Jaiprakash Power Ventures ltd
- Rio Tinto Coal - Australia
- Thai Mozambique Logistica
- ICICI Bank Limited - India
- Power Finance Corporation Ltd., India
- Borneo Indobara - Indonesia
- Baramulti Group, Indonesia
- India Bulls Power Limited - India
- Planning Commission, India
- Commonwealth Bank - Australia
- Orica Mining Services - Indonesia
- Coastal Gujarat Power Limited - India
- Straits Asia Resources Limited - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coalindo Energy - Indonesia
- Agrawal Coal Company - India
- Cement Manufacturers Association - India
- Indian Energy Exchange, India
- Ambuja Cements Ltd - India
- Edison Trading Spa - Italy
- AsiaOL BioFuels Corp., Philippines
- Eastern Energy - Thailand
- Altura Mining Limited, Indonesia
- Interocean Group of Companies - India
- TeaM Sual Corporation - Philippines
- McConnell Dowell - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Parliament of New Zealand
- Mintek Dendrill Indonesia
- Bhatia International Limited - India
- Tamil Nadu electricity Board
- Eastern Coal Council - USA
- Ind-Barath Power Infra Limited - India
- Bangladesh Power Developement Board
- Carbofer General Trading SA - India
- Deloitte Consulting - India
- Romanian Commodities Exchange
- Semirara Mining Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Parry Sugars Refinery, India
- SMC Global Power, Philippines
- Sree Jayajothi Cements Limited - India
- Sojitz Corporation - Japan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The Treasury - Australian Government
- Iligan Light & Power Inc, Philippines
- Mercator Lines Limited - India
- Gujarat Sidhee Cement - India
- Sarangani Energy Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Sical Logistics Limited - India
- Medco Energi Mining Internasional
- Bukit Makmur.PT - Indonesia
- Sakthi Sugars Limited - India
- Indogreen Group - Indonesia
- Latin American Coal - Colombia
- Kideco Jaya Agung - Indonesia
- Indonesian Coal Mining Association
- Thiess Contractors Indonesia
- Siam City Cement - Thailand
- Oldendorff Carriers - Singapore
- Global Green Power PLC Corporation, Philippines
- Aditya Birla Group - India
- IHS Mccloskey Coal Group - USA
- Manunggal Multi Energi - Indonesia
- ASAPP Information Group - India
- Standard Chartered Bank - UAE
- Uttam Galva Steels Limited - India
- Grasim Industreis Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Renaissance Capital - South Africa
- Port Waratah Coal Services - Australia
- PetroVietnam Power Coal Import and Supply Company
- Independent Power Producers Association of India
- Jindal Steel & Power Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Timah Investasi Mineral - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Minerals Council of Australia
- Lanco Infratech Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Metalloyd Limited - United Kingdom
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Antam Resourcindo - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Larsen & Toubro Limited - India
- Pendopo Energi Batubara - Indonesia
- Bharathi Cement Corporation - India
- Ministry of Finance - Indonesia
- Goldman Sachs - Singapore
- Australian Commodity Traders Exchange
- Krishnapatnam Port Company Ltd. - India
- Chamber of Mines of South Africa
- Sinarmas Energy and Mining - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Indika Energy - Indonesia
- GVK Power & Infra Limited - India
- Gujarat Electricity Regulatory Commission - India
- Heidelberg Cement - Germany
- CNBM International Corporation - China
- GMR Energy Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- New Zealand Coal & Carbon
- Indian Oil Corporation Limited
- Siam City Cement PLC, Thailand
- Mercuria Energy - Indonesia
- Barasentosa Lestari - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Central Java Power - Indonesia
- Global Business Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Savvy Resources Ltd - HongKong
- Simpson Spence & Young - Indonesia
- IEA Clean Coal Centre - UK
- Aboitiz Power Corporation - Philippines
- Wilmar Investment Holdings
- Formosa Plastics Group - Taiwan
- Meralco Power Generation, Philippines
- Directorate Of Revenue Intelligence - India
- Marubeni Corporation - India
- Madhucon Powers Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- International Coal Ventures Pvt Ltd - India
- Georgia Ports Authority, United States
- Directorate General of MIneral and Coal - Indonesia
- Malabar Cements Ltd - India
- GAC Shipping (India) Pvt Ltd
- South Luzon Thermal Energy Corporation
- Riau Bara Harum - Indonesia
- PowerSource Philippines DevCo
- Tata Chemicals Ltd - India
- Makarim & Taira - Indonesia
- Xindia Steels Limited - India
- Bayan Resources Tbk. - Indonesia
- Binh Thuan Hamico - Vietnam
- Bank of Tokyo Mitsubishi UFJ Ltd
- Anglo American - United Kingdom
- Australian Coal Association
- Alfred C Toepfer International GmbH - Germany
- Ceylon Electricity Board - Sri Lanka
- Kumho Petrochemical, South Korea
- Indo Tambangraya Megah - Indonesia
- VISA Power Limited - India
- Vizag Seaport Private Limited - India
- Toyota Tsusho Corporation, Japan
- Ministry of Mines - Canada
- Kaltim Prima Coal - Indonesia
- Bhoruka Overseas - Indonesia
- Wood Mackenzie - Singapore
- SN Aboitiz Power Inc, Philippines
- Banpu Public Company Limited - Thailand
- Intertek Mineral Services - Indonesia
- Samtan Co., Ltd - South Korea
- Kartika Selabumi Mining - Indonesia
- The State Trading Corporation of India Ltd
- Attock Cement Pakistan Limited
- Electricity Authority, New Zealand
- Price Waterhouse Coopers - Russia
- Ministry of Transport, Egypt
- Asmin Koalindo Tuhup - Indonesia
- Bukit Baiduri Energy - Indonesia
- Central Electricity Authority - India
- PTC India Limited - India
- Africa Commodities Group - South Africa
- Therma Luzon, Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Energy Development Corp, Philippines
- Orica Australia Pty. Ltd.
- Kobexindo Tractors - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Petron Corporation, Philippines
- MS Steel International - UAE
- Maheswari Brothers Coal Limited - India
- Chettinad Cement Corporation Ltd - India
- San Jose City I Power Corp, Philippines
- Cigading International Bulk Terminal - Indonesia
- CIMB Investment Bank - Malaysia
- London Commodity Brokers - England
- Posco Energy - South Korea
- Merrill Lynch Commodities Europe
- Bulk Trading Sa - Switzerland
- Bhushan Steel Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Videocon Industries ltd - India
- Kepco SPC Power Corporation, Philippines
- Mjunction Services Limited - India
- Essar Steel Hazira Ltd - India
- Sindya Power Generating Company Private Ltd
- OPG Power Generation Pvt Ltd - India
- The University of Queensland
- Karbindo Abesyapradhi - Indoneisa
- LBH Netherlands Bv - Netherlands
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