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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, 14 December 20
PHILIPPINE BANK RCBC TO STOP LENDING FOR NEW COAL-FIRED POWER PROJECTS - MANILA BULLETIN
Yuchengco-led Rizal Commercial Banking Corporation (RCBC) has forthrightly declared that it will no longer extend financing to new coal-fired power ...
Sunday, 13 December 20
LONGSTANDING DOWNSIDE RISKS TO TRADE OUTLOOK - BALTIC EXCHANGE
The OECD has attempted to put a positive spin on the trade message emanating from its latest economic outlook, released last week.
The ...
Sunday, 13 December 20
INDONESIA COAL OUTPUT AT 514 MILLION TONNES THIS YEAR, 2021 TARGET UNCHANGED - REUTERS
Indonesia coal output in the period to Dec. 10 stood at 514.2 million tonnes, official data from the energy ministry’s website showed.
&n ...
Thursday, 10 December 20
MALAYSIA'S CIMB ANNOUNCES COAL FINANCING PHASE-OUT BY 2040 AS ASIA'S FOSSIL FUEL DIVESTMENT DRIVE ACCELERATES - IEEFA
The first emerging markets bank to announce a progressive coal exit policy
Malaysia’s CIMB Group Holdings (CIMB) has announced ...
Wednesday, 09 December 20
MARKET INSIGHT - INTERMODAL
Heading towards the end of a difficult year and with the entire planet under the shadow of the covid-19 virus, it is interesting to proceed with a ...
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- Straits Asia Resources Limited - Singapore
- Ministry of Transport, Egypt
- Binh Thuan Hamico - Vietnam
- Ministry of Finance - Indonesia
- Vizag Seaport Private Limited - India
- Independent Power Producers Association of India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Attock Cement Pakistan Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Standard Chartered Bank - UAE
- Parliament of New Zealand
- Central Electricity Authority - India
- Madhucon Powers Ltd - India
- Kumho Petrochemical, South Korea
- Bharathi Cement Corporation - India
- Energy Development Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- SMG Consultants - Indonesia
- Petron Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ASAPP Information Group - India
- Chettinad Cement Corporation Ltd - India
- Orica Australia Pty. Ltd.
- Australian Coal Association
- Mjunction Services Limited - India
- Coastal Gujarat Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- Kideco Jaya Agung - Indonesia
- Economic Council, Georgia
- Iligan Light & Power Inc, Philippines
- India Bulls Power Limited - India
- Central Java Power - Indonesia
- Australian Commodity Traders Exchange
- Anglo American - United Kingdom
- Vedanta Resources Plc - India
- Directorate General of MIneral and Coal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Therma Luzon, Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Siam City Cement - Thailand
- Commonwealth Bank - Australia
- Oldendorff Carriers - Singapore
- Singapore Mercantile Exchange
- Sree Jayajothi Cements Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Heidelberg Cement - Germany
- IEA Clean Coal Centre - UK
- Orica Mining Services - Indonesia
- Global Business Power Corporation, Philippines
- GMR Energy Limited - India
- Bhushan Steel Limited - India
- Alfred C Toepfer International GmbH - Germany
- Dalmia Cement Bharat India
- IHS Mccloskey Coal Group - USA
- Neyveli Lignite Corporation Ltd, - India
- Bhatia International Limited - India
- Renaissance Capital - South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- Medco Energi Mining Internasional
- Cement Manufacturers Association - India
- Energy Link Ltd, New Zealand
- Ceylon Electricity Board - Sri Lanka
- Bukit Makmur.PT - Indonesia
- Thai Mozambique Logistica
- Directorate Of Revenue Intelligence - India
- Kaltim Prima Coal - Indonesia
- Larsen & Toubro Limited - India
- Jaiprakash Power Ventures ltd
- Jorong Barutama Greston.PT - Indonesia
- Uttam Galva Steels Limited - India
- Eastern Energy - Thailand
- Kalimantan Lumbung Energi - Indonesia
- Deloitte Consulting - India
- Gujarat Mineral Development Corp Ltd - India
- Posco Energy - South Korea
- GN Power Mariveles Coal Plant, Philippines
- Sindya Power Generating Company Private Ltd
- OPG Power Generation Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- PetroVietnam Power Coal Import and Supply Company
- Maheswari Brothers Coal Limited - India
- Manunggal Multi Energi - Indonesia
- Georgia Ports Authority, United States
- Planning Commission, India
- Ministry of Mines - Canada
- Baramulti Group, Indonesia
- Barasentosa Lestari - Indonesia
- Indika Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Africa Commodities Group - South Africa
- Bangladesh Power Developement Board
- Ambuja Cements Ltd - India
- Altura Mining Limited, Indonesia
- Rio Tinto Coal - Australia
- Riau Bara Harum - Indonesia
- Kepco SPC Power Corporation, Philippines
- Mintek Dendrill Indonesia
- Indo Tambangraya Megah - Indonesia
- Mercator Lines Limited - India
- McConnell Dowell - Australia
- SN Aboitiz Power Inc, Philippines
- Wood Mackenzie - Singapore
- Kapuas Tunggal Persada - Indonesia
- MS Steel International - UAE
- CIMB Investment Bank - Malaysia
- Mercuria Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Vijayanagar Sugar Pvt Ltd - India
- Parry Sugars Refinery, India
- Simpson Spence & Young - Indonesia
- Wilmar Investment Holdings
- Gujarat Electricity Regulatory Commission - India
- Makarim & Taira - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Kartika Selabumi Mining - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Borneo Indobara - Indonesia
- Goldman Sachs - Singapore
- Coalindo Energy - Indonesia
- Salva Resources Pvt Ltd - India
- The Treasury - Australian Government
- Marubeni Corporation - India
- Malabar Cements Ltd - India
- Timah Investasi Mineral - Indoneisa
- Latin American Coal - Colombia
- Antam Resourcindo - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Metalloyd Limited - United Kingdom
- GVK Power & Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Trasteel International SA, Italy
- Grasim Industreis Ltd - India
- The State Trading Corporation of India Ltd
- Sarangani Energy Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Electricity Generating Authority of Thailand
- Toyota Tsusho Corporation, Japan
- Bahari Cakrawala Sebuku - Indonesia
- Tata Chemicals Ltd - India
- Star Paper Mills Limited - India
- PowerSource Philippines DevCo
- PNOC Exploration Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Bulk Trading Sa - Switzerland
- European Bulk Services B.V. - Netherlands
- Banpu Public Company Limited - Thailand
- Sakthi Sugars Limited - India
- PTC India Limited - India
- Thiess Contractors Indonesia
- Essar Steel Hazira Ltd - India
- Siam City Cement PLC, Thailand
- Electricity Authority, New Zealand
- Tamil Nadu electricity Board
- Price Waterhouse Coopers - Russia
- Aditya Birla Group - India
- Indonesian Coal Mining Association
- Intertek Mineral Services - Indonesia
- Xindia Steels Limited - India
- SMC Global Power, Philippines
- Semirara Mining and Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- TNB Fuel Sdn Bhd - Malaysia
- London Commodity Brokers - England
- Sinarmas Energy and Mining - Indonesia
- San Jose City I Power Corp, Philippines
- Carbofer General Trading SA - India
- Cigading International Bulk Terminal - Indonesia
- ICICI Bank Limited - India
- Gujarat Sidhee Cement - India
- Interocean Group of Companies - India
- Indian Energy Exchange, India
- Samtan Co., Ltd - South Korea
- Indogreen Group - Indonesia
- Sical Logistics Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Edison Trading Spa - Italy
- Bank of Tokyo Mitsubishi UFJ Ltd
- White Energy Company Limited
- Romanian Commodities Exchange
- CNBM International Corporation - China
- Minerals Council of Australia
- AsiaOL BioFuels Corp., Philippines
- Sojitz Corporation - Japan
- Power Finance Corporation Ltd., India
- Meenaskhi Energy Private Limited - India
- Holcim Trading Pte Ltd - Singapore
- Eastern Coal Council - USA
- Videocon Industries ltd - India
- Savvy Resources Ltd - HongKong
- Indian Oil Corporation Limited
- Meralco Power Generation, Philippines
- Bayan Resources Tbk. - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Lanco Infratech Ltd - India
- Port Waratah Coal Services - Australia
- Agrawal Coal Company - India
- VISA Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Ind-Barath Power Infra Limited - India
- The University of Queensland
- Chamber of Mines of South Africa
- Globalindo Alam Lestari - Indonesia
- Bhoruka Overseas - Indonesia
- New Zealand Coal & Carbon
- Formosa Plastics Group - Taiwan
- Global Green Power PLC Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Karbindo Abesyapradhi - Indoneisa
- Merrill Lynch Commodities Europe
- Semirara Mining Corp, Philippines
- Coal and Oil Company - UAE
- Asmin Koalindo Tuhup - Indonesia
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