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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, 17 July 23
APPROVED AMMONIA-FUELED CONTAINERSHIP - BENEFITS AND RISKS: REED SMITH
Following the news in Offshore Energy that Korea Maritime Consultants has secured approval in principle from the American Bureau of Shipping for it ...
Friday, 14 July 23
CLEAN COAL USE KEY TO DEEP CUTS IN EMISSIONS, STABLE ELECTRICITY SUPPLY - CHINA DAILY
China must push for the clean use of coal and step up integration of the dirty fuel with carbon capture, utilization and storage to achieve sustain ...
Thursday, 13 July 23
VIETNAM'S COAL EMISSIONS PRIMED FOR SURGE AFTER IMPORTS JUMP - REUTERS
Vietnam’s thermal power emissions are primed for a steep climb this summer after the country’s imports of thermal coal soared to their ...
Monday, 26 June 23
COAL PRODUCTION AND CONSUMPTION UP IN 2022 - EUROSTAT
In 2022, EU coal production and consumption continued to increase, reaching 349 million tonnes (+5% compared with the previous year) and 454 millio ...
Wednesday, 21 June 23
QATAR STRIKES SECOND BIG LNG SUPPLY DEAL WITH CHINA - REUTERS
Qatar on Tuesday secured its second large gas supply deal with a Chinese state-controlled company in less than a year, putting Asia clearly ahead i ...
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- GAC Shipping (India) Pvt Ltd
- Antam Resourcindo - Indonesia
- Latin American Coal - Colombia
- Thai Mozambique Logistica
- Trasteel International SA, Italy
- Vedanta Resources Plc - India
- Gujarat Mineral Development Corp Ltd - India
- Energy Link Ltd, New Zealand
- Commonwealth Bank - Australia
- SMC Global Power, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Siam City Cement PLC, Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Finance - Indonesia
- Bhatia International Limited - India
- Ceylon Electricity Board - Sri Lanka
- Samtan Co., Ltd - South Korea
- Jorong Barutama Greston.PT - Indonesia
- ASAPP Information Group - India
- Deloitte Consulting - India
- Jaiprakash Power Ventures ltd
- Agrawal Coal Company - India
- Tamil Nadu electricity Board
- Uttam Galva Steels Limited - India
- Merrill Lynch Commodities Europe
- Kepco SPC Power Corporation, Philippines
- Dalmia Cement Bharat India
- Formosa Plastics Group - Taiwan
- Lanco Infratech Ltd - India
- Metalloyd Limited - United Kingdom
- McConnell Dowell - Australia
- European Bulk Services B.V. - Netherlands
- Sarangani Energy Corporation, Philippines
- Parry Sugars Refinery, India
- San Jose City I Power Corp, Philippines
- Port Waratah Coal Services - Australia
- Global Green Power PLC Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Electricity Authority, New Zealand
- Interocean Group of Companies - India
- Orica Mining Services - Indonesia
- Oldendorff Carriers - Singapore
- CNBM International Corporation - China
- Bukit Makmur.PT - Indonesia
- Pendopo Energi Batubara - Indonesia
- Indika Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- AsiaOL BioFuels Corp., Philippines
- Maheswari Brothers Coal Limited - India
- Cigading International Bulk Terminal - Indonesia
- Mercator Lines Limited - India
- Bharathi Cement Corporation - India
- Independent Power Producers Association of India
- Semirara Mining and Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Electricity Regulatory Commission - India
- Holcim Trading Pte Ltd - Singapore
- Carbofer General Trading SA - India
- Romanian Commodities Exchange
- Kumho Petrochemical, South Korea
- Medco Energi Mining Internasional
- Singapore Mercantile Exchange
- Rio Tinto Coal - Australia
- Chamber of Mines of South Africa
- Larsen & Toubro Limited - India
- Price Waterhouse Coopers - Russia
- Ind-Barath Power Infra Limited - India
- Makarim & Taira - Indonesia
- Straits Asia Resources Limited - Singapore
- Power Finance Corporation Ltd., India
- Edison Trading Spa - Italy
- Sinarmas Energy and Mining - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Meralco Power Generation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indian Oil Corporation Limited
- CIMB Investment Bank - Malaysia
- Therma Luzon, Inc, Philippines
- Planning Commission, India
- Mercuria Energy - Indonesia
- Renaissance Capital - South Africa
- Attock Cement Pakistan Limited
- Marubeni Corporation - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Eastern Coal Council - USA
- Manunggal Multi Energi - Indonesia
- Bangladesh Power Developement Board
- Sindya Power Generating Company Private Ltd
- Kaltim Prima Coal - Indonesia
- Coalindo Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- Kalimantan Lumbung Energi - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Energy Development Corp, Philippines
- Star Paper Mills Limited - India
- Wood Mackenzie - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Essar Steel Hazira Ltd - India
- Eastern Energy - Thailand
- Iligan Light & Power Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Madhucon Powers Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Mines - Canada
- Georgia Ports Authority, United States
- Miang Besar Coal Terminal - Indonesia
- Central Java Power - Indonesia
- Xindia Steels Limited - India
- Petron Corporation, Philippines
- Indogreen Group - Indonesia
- Ministry of Transport, Egypt
- Tata Chemicals Ltd - India
- Timah Investasi Mineral - Indoneisa
- Sojitz Corporation - Japan
- Global Business Power Corporation, Philippines
- Sical Logistics Limited - India
- Jindal Steel & Power Ltd - India
- Indo Tambangraya Megah - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Toyota Tsusho Corporation, Japan
- Chettinad Cement Corporation Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Africa Commodities Group - South Africa
- TeaM Sual Corporation - Philippines
- Heidelberg Cement - Germany
- Bhoruka Overseas - Indonesia
- Vizag Seaport Private Limited - India
- Meenaskhi Energy Private Limited - India
- The Treasury - Australian Government
- Barasentosa Lestari - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Standard Chartered Bank - UAE
- Central Electricity Authority - India
- Semirara Mining Corp, Philippines
- Economic Council, Georgia
- The University of Queensland
- Anglo American - United Kingdom
- White Energy Company Limited
- Mintek Dendrill Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Riau Bara Harum - Indonesia
- Alfred C Toepfer International GmbH - Germany
- India Bulls Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Minerals Council of Australia
- Baramulti Group, Indonesia
- Leighton Contractors Pty Ltd - Australia
- IEA Clean Coal Centre - UK
- Altura Mining Limited, Indonesia
- Siam City Cement - Thailand
- Mjunction Services Limited - India
- International Coal Ventures Pvt Ltd - India
- Wilmar Investment Holdings
- SMG Consultants - Indonesia
- Global Coal Blending Company Limited - Australia
- Savvy Resources Ltd - HongKong
- Grasim Industreis Ltd - India
- Intertek Mineral Services - Indonesia
- GMR Energy Limited - India
- The State Trading Corporation of India Ltd
- GVK Power & Infra Limited - India
- Borneo Indobara - Indonesia
- Banpu Public Company Limited - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ambuja Cements Ltd - India
- New Zealand Coal & Carbon
- Karaikal Port Pvt Ltd - India
- Videocon Industries ltd - India
- VISA Power Limited - India
- Orica Australia Pty. Ltd.
- Kapuas Tunggal Persada - Indonesia
- London Commodity Brokers - England
- Malabar Cements Ltd - India
- Australian Commodity Traders Exchange
- Globalindo Alam Lestari - Indonesia
- PTC India Limited - India
- Indian Energy Exchange, India
- PetroVietnam Power Coal Import and Supply Company
- Kartika Selabumi Mining - Indonesia
- Bayan Resources Tbk. - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sree Jayajothi Cements Limited - India
- Krishnapatnam Port Company Ltd. - India
- Bhushan Steel Limited - India
- Cement Manufacturers Association - India
- ICICI Bank Limited - India
- South Luzon Thermal Energy Corporation
- Australian Coal Association
- Goldman Sachs - Singapore
- Billiton Holdings Pty Ltd - Australia
- Coal and Oil Company - UAE
- LBH Netherlands Bv - Netherlands
- Parliament of New Zealand
- PowerSource Philippines DevCo
- Kobexindo Tractors - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Sidhee Cement - India
- Sakthi Sugars Limited - India
- Directorate Of Revenue Intelligence - India
- IHS Mccloskey Coal Group - USA
- Aboitiz Power Corporation - Philippines
- Electricity Generating Authority of Thailand
- Coastal Gujarat Power Limited - India
- Aditya Birla Group - India
- Bulk Trading Sa - Switzerland
- Thiess Contractors Indonesia
- Posco Energy - South Korea
- Salva Resources Pvt Ltd - India
- MS Steel International - UAE
- Indonesian Coal Mining Association
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