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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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Sunday, 10 September 23
CHINA AUGUST COAL IMPORTS OF 44.3 MLN T HIT RECORD - REUTERS
China, the world’s top coal consumer, imported 44.3 million metric tons of the fuel last month, customs data showed, the highest amount in an ...
Tuesday, 22 August 23
CHINA'S COAL PRODUCTION LOGS STEADY GROWTH IN JANUARY-JULY: XINHUA
China’s output of raw coal went up 3.6 percent year on year in the first seven months of this year, official data showed.
The ...
Sunday, 13 August 23
THE COMMODITIES FEED: LNG SUPPLY RISKS LINGER - ING
Energy – OPEC sees deficit over remainder of 2023
Oil prices came under some pressure yesterday with ICE Brent settling a litt ...
Wednesday, 09 August 23
COAL TRADE TO RETURN TO 2019 LEVELS - BALTIC EXCHANGE
The International Energy Agency’s mid-year Coal Market Update for 2023 brings both positive and concerning news for the global coal industry. ...
Sunday, 23 July 23
ANALYSIS-INDIA'S COAL MINING BET STUMBLES AS WARY BANKS WEIGH RISING RISKS - REUTERS
India’s drive to ramp up coal output to meet growing energy demand is faltering due to banks’ reluctance to finance newly auctioned min ...
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- Mjunction Services Limited - India
- London Commodity Brokers - England
- Indonesian Coal Mining Association
- Deloitte Consulting - India
- Merrill Lynch Commodities Europe
- Offshore Bulk Terminal Pte Ltd, Singapore
- Larsen & Toubro Limited - India
- Mercuria Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Global Green Power PLC Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Mercator Lines Limited - India
- Banpu Public Company Limited - Thailand
- Xindia Steels Limited - India
- Global Business Power Corporation, Philippines
- GMR Energy Limited - India
- Renaissance Capital - South Africa
- Tata Chemicals Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Rio Tinto Coal - Australia
- Posco Energy - South Korea
- Videocon Industries ltd - India
- Trasteel International SA, Italy
- PNOC Exploration Corporation - Philippines
- Electricity Generating Authority of Thailand
- SMG Consultants - Indonesia
- Australian Coal Association
- The Treasury - Australian Government
- Asia Pacific Energy Resources Ventures Inc, Philippines
- VISA Power Limited - India
- Bharathi Cement Corporation - India
- Sojitz Corporation - Japan
- Ministry of Finance - Indonesia
- Mintek Dendrill Indonesia
- Eastern Coal Council - USA
- Siam City Cement PLC, Thailand
- MS Steel International - UAE
- Kaltim Prima Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- Latin American Coal - Colombia
- Coal and Oil Company - UAE
- Lanco Infratech Ltd - India
- European Bulk Services B.V. - Netherlands
- Bhushan Steel Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Billiton Holdings Pty Ltd - Australia
- Carbofer General Trading SA - India
- Timah Investasi Mineral - Indoneisa
- Ministry of Transport, Egypt
- Price Waterhouse Coopers - Russia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Orica Australia Pty. Ltd.
- Indo Tambangraya Megah - Indonesia
- Altura Mining Limited, Indonesia
- Kobexindo Tractors - Indoneisa
- Malabar Cements Ltd - India
- Ministry of Mines - Canada
- Oldendorff Carriers - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Rashtriya Ispat Nigam Limited - India
- IHS Mccloskey Coal Group - USA
- Wood Mackenzie - Singapore
- Global Coal Blending Company Limited - Australia
- ASAPP Information Group - India
- India Bulls Power Limited - India
- Wilmar Investment Holdings
- Sical Logistics Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Independent Power Producers Association of India
- ICICI Bank Limited - India
- Kepco SPC Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Cigading International Bulk Terminal - Indonesia
- Indika Energy - Indonesia
- Energy Development Corp, Philippines
- Standard Chartered Bank - UAE
- Kapuas Tunggal Persada - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Karaikal Port Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Planning Commission, India
- CIMB Investment Bank - Malaysia
- Star Paper Mills Limited - India
- Sinarmas Energy and Mining - Indonesia
- Barasentosa Lestari - Indonesia
- International Coal Ventures Pvt Ltd - India
- Minerals Council of Australia
- Manunggal Multi Energi - Indonesia
- Eastern Energy - Thailand
- IEA Clean Coal Centre - UK
- Grasim Industreis Ltd - India
- Chettinad Cement Corporation Ltd - India
- Directorate Of Revenue Intelligence - India
- Riau Bara Harum - Indonesia
- Semirara Mining Corp, Philippines
- Agrawal Coal Company - India
- Thiess Contractors Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- TeaM Sual Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Intertek Mineral Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Sarangani Energy Corporation, Philippines
- Madhucon Powers Ltd - India
- Formosa Plastics Group - Taiwan
- Petron Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Cement Manufacturers Association - India
- Sree Jayajothi Cements Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- San Jose City I Power Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Sindya Power Generating Company Private Ltd
- Coalindo Energy - Indonesia
- Parry Sugars Refinery, India
- Maheswari Brothers Coal Limited - India
- Marubeni Corporation - India
- PetroVietnam Power Coal Import and Supply Company
- Therma Luzon, Inc, Philippines
- Makarim & Taira - Indonesia
- LBH Netherlands Bv - Netherlands
- Uttam Galva Steels Limited - India
- CNBM International Corporation - China
- Central Electricity Authority - India
- Ind-Barath Power Infra Limited - India
- PowerSource Philippines DevCo
- Vijayanagar Sugar Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- The University of Queensland
- Indian Oil Corporation Limited
- Electricity Authority, New Zealand
- Coastal Gujarat Power Limited - India
- GVK Power & Infra Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Orica Mining Services - Indonesia
- Central Java Power - Indonesia
- Iligan Light & Power Inc, Philippines
- Tamil Nadu electricity Board
- Antam Resourcindo - Indonesia
- Baramulti Group, Indonesia
- White Energy Company Limited
- Bukit Baiduri Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Port Waratah Coal Services - Australia
- Kartika Selabumi Mining - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Chamber of Mines of South Africa
- Parliament of New Zealand
- Medco Energi Mining Internasional
- Bhoruka Overseas - Indonesia
- Aboitiz Power Corporation - Philippines
- Singapore Mercantile Exchange
- Edison Trading Spa - Italy
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Australian Commodity Traders Exchange
- Neyveli Lignite Corporation Ltd, - India
- Karbindo Abesyapradhi - Indoneisa
- Commonwealth Bank - Australia
- Georgia Ports Authority, United States
- Ambuja Cements Ltd - India
- Vedanta Resources Plc - India
- New Zealand Coal & Carbon
- Indian Energy Exchange, India
- Simpson Spence & Young - Indonesia
- Romanian Commodities Exchange
- Kalimantan Lumbung Energi - Indonesia
- Interocean Group of Companies - India
- Ceylon Electricity Board - Sri Lanka
- Bhatia International Limited - India
- Toyota Tsusho Corporation, Japan
- Africa Commodities Group - South Africa
- Attock Cement Pakistan Limited
- Bangladesh Power Developement Board
- Goldman Sachs - Singapore
- Bulk Trading Sa - Switzerland
- Krishnapatnam Port Company Ltd. - India
- Heidelberg Cement - Germany
- SMC Global Power, Philippines
- McConnell Dowell - Australia
- Jaiprakash Power Ventures ltd
- South Luzon Thermal Energy Corporation
- Thai Mozambique Logistica
- Anglo American - United Kingdom
- Essar Steel Hazira Ltd - India
- Kumho Petrochemical, South Korea
- Globalindo Alam Lestari - Indonesia
- Siam City Cement - Thailand
- Savvy Resources Ltd - HongKong
- Sakthi Sugars Limited - India
- PTC India Limited - India
- Aditya Birla Group - India
- AsiaOL BioFuels Corp., Philippines
- Straits Asia Resources Limited - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Metalloyd Limited - United Kingdom
- SN Aboitiz Power Inc, Philippines
- Borneo Indobara - Indonesia
- Pendopo Energi Batubara - Indonesia
- Energy Link Ltd, New Zealand
- Economic Council, Georgia
- Power Finance Corporation Ltd., India
- Leighton Contractors Pty Ltd - Australia
- Miang Besar Coal Terminal - Indonesia
- Bukit Makmur.PT - Indonesia
- Salva Resources Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Gujarat Sidhee Cement - India
- Samtan Co., Ltd - South Korea
- OPG Power Generation Pvt Ltd - India
- Dalmia Cement Bharat India
- Indogreen Group - Indonesia
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