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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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Wednesday, 02 December 20
INDONESIA CONSIDERING CLOSING 3,400MW SURALAYA COAL PLANT - THE JAKARTA POST
The government is considering to shut down the aging Suralaya coal-fired power plant (PLTU) in Cilegon, Banten, and replace it with green energy, a ...
Wednesday, 02 December 20
MARKET INSIGHT - INTERMODAL
It has been another busy week in the dry bulk secondhand market; a healthy number of sales reported predominantly from Japanese owners while owner& ...
Thursday, 26 November 20
DECLINE IN COAL EXPORTS ADDS TO NAVAJO-OWNED COMPANY'S PROBLEMS - IEEFA U.S.
Weak demand and low prices are likely creating steep losses for NTEC
U.S. coal exports to Asia—once heralded as the saving gra ...
Thursday, 26 November 20
COAL FINANCING QUICKLY DRYING UP WORLDWIDE - ANALYSTS : REUTERS
Financing for coal projects is drying up at ever increasing rates as more countries target zero carbon emissions amid an energy transition sweeping ...
Wednesday, 25 November 20
LIBOR REPLACEMENT AND SHIP FINANCE - WHERE IS IT HEADING? - WFW
The likely replacement of the LIBOR at the end of 2021 creates difficult technical and practical issues for all sectors of business and finance. Th ...
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- GN Power Mariveles Coal Plant, Philippines
- Renaissance Capital - South Africa
- Central Java Power - Indonesia
- GVK Power & Infra Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- VISA Power Limited - India
- Makarim & Taira - Indonesia
- The State Trading Corporation of India Ltd
- McConnell Dowell - Australia
- Cement Manufacturers Association - India
- Bhatia International Limited - India
- Miang Besar Coal Terminal - Indonesia
- Trasteel International SA, Italy
- SMG Consultants - Indonesia
- Mercuria Energy - Indonesia
- Attock Cement Pakistan Limited
- Thai Mozambique Logistica
- Power Finance Corporation Ltd., India
- Sarangani Energy Corporation, Philippines
- Edison Trading Spa - Italy
- Kaltim Prima Coal - Indonesia
- Larsen & Toubro Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Savvy Resources Ltd - HongKong
- AsiaOL BioFuels Corp., Philippines
- Globalindo Alam Lestari - Indonesia
- Jindal Steel & Power Ltd - India
- Kartika Selabumi Mining - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Kapuas Tunggal Persada - Indonesia
- Port Waratah Coal Services - Australia
- Salva Resources Pvt Ltd - India
- Chamber of Mines of South Africa
- ASAPP Information Group - India
- Commonwealth Bank - Australia
- Siam City Cement - Thailand
- Metalloyd Limited - United Kingdom
- Maheswari Brothers Coal Limited - India
- Ind-Barath Power Infra Limited - India
- Marubeni Corporation - India
- The Treasury - Australian Government
- Deloitte Consulting - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Standard Chartered Bank - UAE
- Leighton Contractors Pty Ltd - Australia
- Planning Commission, India
- South Luzon Thermal Energy Corporation
- Petrochimia International Co. Ltd.- Taiwan
- Cigading International Bulk Terminal - Indonesia
- Mjunction Services Limited - India
- Mercator Lines Limited - India
- Borneo Indobara - Indonesia
- Global Coal Blending Company Limited - Australia
- Central Electricity Authority - India
- Grasim Industreis Ltd - India
- Energy Development Corp, Philippines
- Ministry of Mines - Canada
- Africa Commodities Group - South Africa
- Agrawal Coal Company - India
- Australian Commodity Traders Exchange
- Chettinad Cement Corporation Ltd - India
- Bayan Resources Tbk. - Indonesia
- OPG Power Generation Pvt Ltd - India
- Dalmia Cement Bharat India
- Goldman Sachs - Singapore
- Price Waterhouse Coopers - Russia
- GMR Energy Limited - India
- Global Green Power PLC Corporation, Philippines
- PTC India Limited - India
- Semirara Mining and Power Corporation, Philippines
- Siam City Cement PLC, Thailand
- Sindya Power Generating Company Private Ltd
- Kepco SPC Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Economic Council, Georgia
- Bhushan Steel Limited - India
- CIMB Investment Bank - Malaysia
- IHS Mccloskey Coal Group - USA
- Georgia Ports Authority, United States
- Oldendorff Carriers - Singapore
- Rashtriya Ispat Nigam Limited - India
- Vizag Seaport Private Limited - India
- Indogreen Group - Indonesia
- Formosa Plastics Group - Taiwan
- Petron Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Meenaskhi Energy Private Limited - India
- TeaM Sual Corporation - Philippines
- Merrill Lynch Commodities Europe
- Krishnapatnam Port Company Ltd. - India
- Intertek Mineral Services - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Karaikal Port Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- MS Steel International - UAE
- Iligan Light & Power Inc, Philippines
- Orica Australia Pty. Ltd.
- Jorong Barutama Greston.PT - Indonesia
- Electricity Authority, New Zealand
- New Zealand Coal & Carbon
- Indian Energy Exchange, India
- International Coal Ventures Pvt Ltd - India
- Sojitz Corporation - Japan
- Indo Tambangraya Megah - Indonesia
- PowerSource Philippines DevCo
- Bahari Cakrawala Sebuku - Indonesia
- LBH Netherlands Bv - Netherlands
- Bukit Baiduri Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Bharathi Cement Corporation - India
- Eastern Energy - Thailand
- Orica Mining Services - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Anglo American - United Kingdom
- Riau Bara Harum - Indonesia
- Global Business Power Corporation, Philippines
- Malabar Cements Ltd - India
- SMC Global Power, Philippines
- San Jose City I Power Corp, Philippines
- Videocon Industries ltd - India
- SN Aboitiz Power Inc, Philippines
- Wilmar Investment Holdings
- Carbofer General Trading SA - India
- Maharashtra Electricity Regulatory Commission - India
- Heidelberg Cement - Germany
- Directorate General of MIneral and Coal - Indonesia
- Mintek Dendrill Indonesia
- Vedanta Resources Plc - India
- Independent Power Producers Association of India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Antam Resourcindo - Indonesia
- Australian Coal Association
- Singapore Mercantile Exchange
- Coalindo Energy - Indonesia
- Coal and Oil Company - UAE
- Binh Thuan Hamico - Vietnam
- Bulk Trading Sa - Switzerland
- Parliament of New Zealand
- Aboitiz Power Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Manunggal Multi Energi - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Jaiprakash Power Ventures ltd
- IEA Clean Coal Centre - UK
- Semirara Mining Corp, Philippines
- Therma Luzon, Inc, Philippines
- Tata Chemicals Ltd - India
- The University of Queensland
- Electricity Generating Authority of Thailand
- Neyveli Lignite Corporation Ltd, - India
- Rio Tinto Coal - Australia
- Ceylon Electricity Board - Sri Lanka
- London Commodity Brokers - England
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Sidhee Cement - India
- Ministry of Transport, Egypt
- Sree Jayajothi Cements Limited - India
- Ambuja Cements Ltd - India
- Samtan Co., Ltd - South Korea
- Indonesian Coal Mining Association
- Star Paper Mills Limited - India
- Bhoruka Overseas - Indonesia
- Altura Mining Limited, Indonesia
- Directorate Of Revenue Intelligence - India
- Barasentosa Lestari - Indonesia
- Meralco Power Generation, Philippines
- Baramulti Group, Indonesia
- White Energy Company Limited
- India Bulls Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Timah Investasi Mineral - Indoneisa
- Thiess Contractors Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Pendopo Energi Batubara - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Aditya Birla Group - India
- Tamil Nadu electricity Board
- Uttam Galva Steels Limited - India
- PNOC Exploration Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- Medco Energi Mining Internasional
- PetroVietnam Power Coal Import and Supply Company
- Kumho Petrochemical, South Korea
- Latin American Coal - Colombia
- Sakthi Sugars Limited - India
- Posco Energy - South Korea
- European Bulk Services B.V. - Netherlands
- Indian Oil Corporation Limited
- Eastern Coal Council - USA
- Sinarmas Energy and Mining - Indonesia
- CNBM International Corporation - China
- Essar Steel Hazira Ltd - India
- Interocean Group of Companies - India
- Bangladesh Power Developement Board
- Coastal Gujarat Power Limited - India
- Ministry of Finance - Indonesia
- Energy Link Ltd, New Zealand
- Parry Sugars Refinery, India
- Indika Energy - Indonesia
- Sical Logistics Limited - India
- Kobexindo Tractors - Indoneisa
- Karbindo Abesyapradhi - Indoneisa
- Xindia Steels Limited - India
- Toyota Tsusho Corporation, Japan
- ICICI Bank Limited - India
- Wood Mackenzie - Singapore
- Simpson Spence & Young - Indonesia
- Romanian Commodities Exchange
- Billiton Holdings Pty Ltd - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Minerals Council of Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Lanco Infratech Ltd - India
- Madhucon Powers Ltd - India
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