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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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Tuesday, 23 June 20
COVID-19 COULD CAUSE A BOOM IN COAL POWER - RYSTAD ENERGY | OILPRICE
COVID-19 has not only impacted the energy industry’s revenues but also its infrastructure development.
The delay of new natural gas ...
Tuesday, 23 June 20
CHINA'S COAL OUTPUT UP 0.9 PCT IN JANUARY-MAY: XINHUA
Output of raw coal in China rose 0.9 percent year on year to 1.47 billion tonnes in the first five months of this year, official data showed.
& ...
Monday, 22 June 20
KAMSARMAX TYPES REGULARLY HIT THE $9,000 PER DAY LEVEL FOR INDONESIAN COAL RUN TO CHINA, BALTIC BRIEFING SAYS
Capesize
The Capesize market trajectory this week has been one of the steepest rallies the sector has experienced. Opening at $12,410, the sect ...
Saturday, 20 June 20
WORLD OIL DEMAND IS PROJECTED TO DECREASE BY 9.1 MB/D IN 2020 - OPEC
Crude Oil Price Movements
Spot crude oil prices rebounded in May from low levels registered a month earlier, as physical market fundamentals im ...
Saturday, 20 June 20
NO ESCAPING GLOBAL TRADE SLUMP - BALTIC EXCHANGE
Those hoping for a decent recovery in trade in the second half of the year should prepare for disappointment.
New data from the Unit ...
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- Bayan Resources Tbk. - Indonesia
- Bharathi Cement Corporation - India
- Ind-Barath Power Infra Limited - India
- Borneo Indobara - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Semirara Mining Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- Bhatia International Limited - India
- Metalloyd Limited - United Kingdom
- Makarim & Taira - Indonesia
- Formosa Plastics Group - Taiwan
- Marubeni Corporation - India
- The State Trading Corporation of India Ltd
- Sarangani Energy Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Therma Luzon, Inc, Philippines
- Australian Coal Association
- Bukit Makmur.PT - Indonesia
- Intertek Mineral Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Bhoruka Overseas - Indonesia
- Cigading International Bulk Terminal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- White Energy Company Limited
- Larsen & Toubro Limited - India
- Indogreen Group - Indonesia
- Energy Link Ltd, New Zealand
- Maheswari Brothers Coal Limited - India
- Energy Development Corp, Philippines
- Coal and Oil Company - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- Attock Cement Pakistan Limited
- Manunggal Multi Energi - Indonesia
- Central Java Power - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Port Waratah Coal Services - Australia
- Meenaskhi Energy Private Limited - India
- Electricity Authority, New Zealand
- Global Coal Blending Company Limited - Australia
- Romanian Commodities Exchange
- Ambuja Cements Ltd - India
- GVK Power & Infra Limited - India
- Gujarat Sidhee Cement - India
- Kalimantan Lumbung Energi - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Banpu Public Company Limited - Thailand
- Kumho Petrochemical, South Korea
- Africa Commodities Group - South Africa
- Neyveli Lignite Corporation Ltd, - India
- Economic Council, Georgia
- Gujarat Mineral Development Corp Ltd - India
- Riau Bara Harum - Indonesia
- Tata Chemicals Ltd - India
- Cement Manufacturers Association - India
- Rio Tinto Coal - Australia
- Trasteel International SA, Italy
- Ministry of Transport, Egypt
- International Coal Ventures Pvt Ltd - India
- Eastern Energy - Thailand
- Meralco Power Generation, Philippines
- Indo Tambangraya Megah - Indonesia
- Karaikal Port Pvt Ltd - India
- Madhucon Powers Ltd - India
- Siam City Cement PLC, Thailand
- GAC Shipping (India) Pvt Ltd
- Star Paper Mills Limited - India
- Kaltim Prima Coal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Standard Chartered Bank - UAE
- Timah Investasi Mineral - Indoneisa
- Sindya Power Generating Company Private Ltd
- Singapore Mercantile Exchange
- San Jose City I Power Corp, Philippines
- Barasentosa Lestari - Indonesia
- Indika Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Central Electricity Authority - India
- Siam City Cement - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Finance - Indonesia
- Sical Logistics Limited - India
- AsiaOL BioFuels Corp., Philippines
- Pendopo Energi Batubara - Indonesia
- Kobexindo Tractors - Indoneisa
- Deloitte Consulting - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Tamil Nadu electricity Board
- Price Waterhouse Coopers - Russia
- Indian Oil Corporation Limited
- Parliament of New Zealand
- Bangladesh Power Developement Board
- Orica Mining Services - Indonesia
- Videocon Industries ltd - India
- Directorate Of Revenue Intelligence - India
- Uttam Galva Steels Limited - India
- India Bulls Power Limited - India
- Latin American Coal - Colombia
- Miang Besar Coal Terminal - Indonesia
- Australian Commodity Traders Exchange
- Indian Energy Exchange, India
- Bhushan Steel Limited - India
- Edison Trading Spa - Italy
- Thiess Contractors Indonesia
- Altura Mining Limited, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- MS Steel International - UAE
- Wilmar Investment Holdings
- Aboitiz Power Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- Baramulti Group, Indonesia
- GMR Energy Limited - India
- South Luzon Thermal Energy Corporation
- Sakthi Sugars Limited - India
- Vizag Seaport Private Limited - India
- Straits Asia Resources Limited - Singapore
- Kepco SPC Power Corporation, Philippines
- The University of Queensland
- Ministry of Mines - Canada
- Antam Resourcindo - Indonesia
- Independent Power Producers Association of India
- Carbofer General Trading SA - India
- OPG Power Generation Pvt Ltd - India
- Goldman Sachs - Singapore
- Agrawal Coal Company - India
- Petron Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- PTC India Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Mjunction Services Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Jindal Steel & Power Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Xindia Steels Limited - India
- European Bulk Services B.V. - Netherlands
- Mintek Dendrill Indonesia
- Indonesian Coal Mining Association
- Leighton Contractors Pty Ltd - Australia
- Semirara Mining and Power Corporation, Philippines
- Eastern Coal Council - USA
- Global Green Power PLC Corporation, Philippines
- Power Finance Corporation Ltd., India
- IEA Clean Coal Centre - UK
- Renaissance Capital - South Africa
- Alfred C Toepfer International GmbH - Germany
- Gujarat Electricity Regulatory Commission - India
- Kideco Jaya Agung - Indonesia
- Medco Energi Mining Internasional
- Posco Energy - South Korea
- Global Business Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Georgia Ports Authority, United States
- Essar Steel Hazira Ltd - India
- Anglo American - United Kingdom
- Chamber of Mines of South Africa
- Mercuria Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Merrill Lynch Commodities Europe
- Binh Thuan Hamico - Vietnam
- Parry Sugars Refinery, India
- SMC Global Power, Philippines
- Interocean Group of Companies - India
- London Commodity Brokers - England
- Sojitz Corporation - Japan
- Vedanta Resources Plc - India
- Jaiprakash Power Ventures ltd
- Sree Jayajothi Cements Limited - India
- Salva Resources Pvt Ltd - India
- New Zealand Coal & Carbon
- Iligan Light & Power Inc, Philippines
- Simpson Spence & Young - Indonesia
- Dalmia Cement Bharat India
- McConnell Dowell - Australia
- Krishnapatnam Port Company Ltd. - India
- CIMB Investment Bank - Malaysia
- LBH Netherlands Bv - Netherlands
- Malabar Cements Ltd - India
- CNBM International Corporation - China
- SMG Consultants - Indonesia
- PNOC Exploration Corporation - Philippines
- ICICI Bank Limited - India
- Kapuas Tunggal Persada - Indonesia
- Coastal Gujarat Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kartika Selabumi Mining - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Electricity Generating Authority of Thailand
- Jorong Barutama Greston.PT - Indonesia
- The Treasury - Australian Government
- Aditya Birla Group - India
- Ceylon Electricity Board - Sri Lanka
- Sinarmas Energy and Mining - Indonesia
- Coalindo Energy - Indonesia
- Heidelberg Cement - Germany
- Planning Commission, India
- Bukit Baiduri Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Minerals Council of Australia
- TeaM Sual Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Lanco Infratech Ltd - India
- Wood Mackenzie - Singapore
- ASAPP Information Group - India
- Mercator Lines Limited - India
- Holcim Trading Pte Ltd - Singapore
- Oldendorff Carriers - Singapore
- Rashtriya Ispat Nigam Limited - India
- Commonwealth Bank - Australia
- Toyota Tsusho Corporation, Japan
- Petrochimia International Co. Ltd.- Taiwan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- VISA Power Limited - India
- PowerSource Philippines DevCo
- Thai Mozambique Logistica
- Grasim Industreis Ltd - India
- Orica Australia Pty. Ltd.
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