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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, 17 November 20
AUSTRALIAN COAL EXPORTS TO CHINA SLUMP, BUT PRICES ARE MIXED - REUTERS
China’s unofficial ban on coal imports from Australia is starting to take its toll on volumes, with departing cargoes down sharply so far in ...
Friday, 13 November 20
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - XINHUA
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Monday, 09 November 20
INDONESIA MAY CUT BIODIESEL USE TARGET AS SUBSIDY FUND DEPLETES - FITCH
The Indonesian government may rein in its push to increase use of biodiesel as it now comes at higher cost following a fall in crude oil prices and ...
Monday, 09 November 20
SOUTH AFRICA: COAL MARKET CONDITIONS HAVE ' DETERIORATED MATERIALLY' - IEEFA
The Asian seaborne thermal coal pool is drying out
Resource Generation Ltd’s proposed but long delayed Boikarabelo coal mine i ...
Friday, 06 November 20
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - XINHUA
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
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- Toyota Tsusho Corporation, Japan
- Samtan Co., Ltd - South Korea
- PowerSource Philippines DevCo
- Intertek Mineral Services - Indonesia
- Central Electricity Authority - India
- Heidelberg Cement - Germany
- Kohat Cement Company Ltd. - Pakistan
- Bangladesh Power Developement Board
- Malabar Cements Ltd - India
- Orica Australia Pty. Ltd.
- Electricity Authority, New Zealand
- Riau Bara Harum - Indonesia
- Carbofer General Trading SA - India
- Asmin Koalindo Tuhup - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Rio Tinto Coal - Australia
- PetroVietnam Power Coal Import and Supply Company
- Therma Luzon, Inc, Philippines
- Kideco Jaya Agung - Indonesia
- South Luzon Thermal Energy Corporation
- Petrochimia International Co. Ltd.- Taiwan
- International Coal Ventures Pvt Ltd - India
- Eastern Energy - Thailand
- Indo Tambangraya Megah - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Maheswari Brothers Coal Limited - India
- Mercuria Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Dalmia Cement Bharat India
- SMC Global Power, Philippines
- Essar Steel Hazira Ltd - India
- Cement Manufacturers Association - India
- Merrill Lynch Commodities Europe
- Wood Mackenzie - Singapore
- Aboitiz Power Corporation - Philippines
- Ministry of Finance - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Videocon Industries ltd - India
- Chamber of Mines of South Africa
- Lanco Infratech Ltd - India
- Uttam Galva Steels Limited - India
- Altura Mining Limited, Indonesia
- Singapore Mercantile Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ind-Barath Power Infra Limited - India
- Trasteel International SA, Italy
- Barasentosa Lestari - Indonesia
- Iligan Light & Power Inc, Philippines
- Orica Mining Services - Indonesia
- Straits Asia Resources Limited - Singapore
- Agrawal Coal Company - India
- Sindya Power Generating Company Private Ltd
- Neyveli Lignite Corporation Ltd, - India
- Kepco SPC Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Gujarat Sidhee Cement - India
- McConnell Dowell - Australia
- Mintek Dendrill Indonesia
- Global Coal Blending Company Limited - Australia
- Australian Coal Association
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- OPG Power Generation Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Savvy Resources Ltd - HongKong
- Romanian Commodities Exchange
- Anglo American - United Kingdom
- Ministry of Mines - Canada
- Offshore Bulk Terminal Pte Ltd, Singapore
- Marubeni Corporation - India
- Kartika Selabumi Mining - Indonesia
- Parry Sugars Refinery, India
- Makarim & Taira - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Directorate Of Revenue Intelligence - India
- Aditya Birla Group - India
- Kalimantan Lumbung Energi - Indonesia
- TeaM Sual Corporation - Philippines
- Mjunction Services Limited - India
- Metalloyd Limited - United Kingdom
- IEA Clean Coal Centre - UK
- Medco Energi Mining Internasional
- Karaikal Port Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Georgia Ports Authority, United States
- LBH Netherlands Bv - Netherlands
- Vedanta Resources Plc - India
- Xindia Steels Limited - India
- Timah Investasi Mineral - Indoneisa
- Bhatia International Limited - India
- MS Steel International - UAE
- Indogreen Group - Indonesia
- Tata Chemicals Ltd - India
- Sical Logistics Limited - India
- Oldendorff Carriers - Singapore
- ASAPP Information Group - India
- Planning Commission, India
- Jorong Barutama Greston.PT - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Semirara Mining Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Africa Commodities Group - South Africa
- Renaissance Capital - South Africa
- Indian Energy Exchange, India
- Meenaskhi Energy Private Limited - India
- Billiton Holdings Pty Ltd - Australia
- India Bulls Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Independent Power Producers Association of India
- PNOC Exploration Corporation - Philippines
- San Jose City I Power Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Deloitte Consulting - India
- Indonesian Coal Mining Association
- SMG Consultants - Indonesia
- Energy Link Ltd, New Zealand
- Maharashtra Electricity Regulatory Commission - India
- Globalindo Alam Lestari - Indonesia
- Thai Mozambique Logistica
- Sarangani Energy Corporation, Philippines
- Coalindo Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Wilmar Investment Holdings
- Cigading International Bulk Terminal - Indonesia
- Larsen & Toubro Limited - India
- Jindal Steel & Power Ltd - India
- Sakthi Sugars Limited - India
- Energy Development Corp, Philippines
- Bukit Makmur.PT - Indonesia
- Star Paper Mills Limited - India
- Tamil Nadu electricity Board
- TNB Fuel Sdn Bhd - Malaysia
- Coastal Gujarat Power Limited - India
- Vizag Seaport Private Limited - India
- Siam City Cement - Thailand
- Formosa Plastics Group - Taiwan
- White Energy Company Limited
- Global Business Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Sojitz Corporation - Japan
- Pipit Mutiara Jaya. PT, Indonesia
- Interocean Group of Companies - India
- Madhucon Powers Ltd - India
- Meralco Power Generation, Philippines
- Pendopo Energi Batubara - Indonesia
- Posco Energy - South Korea
- Thiess Contractors Indonesia
- Bhushan Steel Limited - India
- Salva Resources Pvt Ltd - India
- Edison Trading Spa - Italy
- Gujarat Mineral Development Corp Ltd - India
- Global Green Power PLC Corporation, Philippines
- The State Trading Corporation of India Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Coal and Oil Company - UAE
- The University of Queensland
- SN Aboitiz Power Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Indika Energy - Indonesia
- Economic Council, Georgia
- Goldman Sachs - Singapore
- Banpu Public Company Limited - Thailand
- Sree Jayajothi Cements Limited - India
- Minerals Council of Australia
- Gujarat Electricity Regulatory Commission - India
- Kobexindo Tractors - Indoneisa
- Kaltim Prima Coal - Indonesia
- The Treasury - Australian Government
- Central Java Power - Indonesia
- Siam City Cement PLC, Thailand
- Ambuja Cements Ltd - India
- London Commodity Brokers - England
- Grasim Industreis Ltd - India
- Attock Cement Pakistan Limited
- Petron Corporation, Philippines
- ICICI Bank Limited - India
- Mercator Lines Limited - India
- Parliament of New Zealand
- VISA Power Limited - India
- IHS Mccloskey Coal Group - USA
- CNBM International Corporation - China
- Kumho Petrochemical, South Korea
- Karbindo Abesyapradhi - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Latin American Coal - Colombia
- Australian Commodity Traders Exchange
- Antam Resourcindo - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- PTC India Limited - India
- Manunggal Multi Energi - Indonesia
- New Zealand Coal & Carbon
- European Bulk Services B.V. - Netherlands
- Ministry of Transport, Egypt
- Port Waratah Coal Services - Australia
- Semirara Mining and Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Standard Chartered Bank - UAE
- GN Power Mariveles Coal Plant, Philippines
- Chettinad Cement Corporation Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Eastern Coal Council - USA
- Bharathi Cement Corporation - India
- GVK Power & Infra Limited - India
- Baramulti Group, Indonesia
- Bhoruka Overseas - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Indian Oil Corporation Limited
- GMR Energy Limited - India
- CIMB Investment Bank - Malaysia
- Power Finance Corporation Ltd., India
- Electricity Generating Authority of Thailand
- Holcim Trading Pte Ltd - Singapore
- Commonwealth Bank - Australia
- Sinarmas Energy and Mining - Indonesia
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