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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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- Ceylon Electricity Board - Sri Lanka
- ICICI Bank Limited - India
- Economic Council, Georgia
- Standard Chartered Bank - UAE
- Maheswari Brothers Coal Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Bharathi Cement Corporation - India
- Indo Tambangraya Megah - Indonesia
- Sree Jayajothi Cements Limited - India
- Parry Sugars Refinery, India
- Thai Mozambique Logistica
- Global Green Power PLC Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- ASAPP Information Group - India
- Port Waratah Coal Services - Australia
- Jorong Barutama Greston.PT - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Jaiprakash Power Ventures ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Leighton Contractors Pty Ltd - Australia
- Eastern Coal Council - USA
- Xindia Steels Limited - India
- Bukit Baiduri Energy - Indonesia
- Ministry of Mines - Canada
- Bukit Asam (Persero) Tbk - Indonesia
- Chettinad Cement Corporation Ltd - India
- Central Electricity Authority - India
- Orica Mining Services - Indonesia
- Lanco Infratech Ltd - India
- Energy Link Ltd, New Zealand
- CIMB Investment Bank - Malaysia
- Marubeni Corporation - India
- Goldman Sachs - Singapore
- PTC India Limited - India
- Binh Thuan Hamico - Vietnam
- Bulk Trading Sa - Switzerland
- Coal and Oil Company - UAE
- IEA Clean Coal Centre - UK
- Toyota Tsusho Corporation, Japan
- Tamil Nadu electricity Board
- European Bulk Services B.V. - Netherlands
- PowerSource Philippines DevCo
- Baramulti Group, Indonesia
- Banpu Public Company Limited - Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Madhucon Powers Ltd - India
- Mercator Lines Limited - India
- Grasim Industreis Ltd - India
- Orica Australia Pty. Ltd.
- Trasteel International SA, Italy
- Wilmar Investment Holdings
- Indian Oil Corporation Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- San Jose City I Power Corp, Philippines
- Thiess Contractors Indonesia
- GVK Power & Infra Limited - India
- Intertek Mineral Services - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Price Waterhouse Coopers - Russia
- Central Java Power - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Jindal Steel & Power Ltd - India
- Antam Resourcindo - Indonesia
- Sakthi Sugars Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Karbindo Abesyapradhi - Indoneisa
- Star Paper Mills Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- LBH Netherlands Bv - Netherlands
- Malabar Cements Ltd - India
- Merrill Lynch Commodities Europe
- Bhushan Steel Limited - India
- Energy Development Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Mjunction Services Limited - India
- Posco Energy - South Korea
- Commonwealth Bank - Australia
- Billiton Holdings Pty Ltd - Australia
- Neyveli Lignite Corporation Ltd, - India
- Miang Besar Coal Terminal - Indonesia
- Electricity Authority, New Zealand
- Africa Commodities Group - South Africa
- Vizag Seaport Private Limited - India
- Coalindo Energy - Indonesia
- Salva Resources Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Riau Bara Harum - Indonesia
- Savvy Resources Ltd - HongKong
- Interocean Group of Companies - India
- Georgia Ports Authority, United States
- Kumho Petrochemical, South Korea
- Planning Commission, India
- The University of Queensland
- Directorate General of MIneral and Coal - Indonesia
- Bangladesh Power Developement Board
- Global Business Power Corporation, Philippines
- Ministry of Transport, Egypt
- Heidelberg Cement - Germany
- London Commodity Brokers - England
- Renaissance Capital - South Africa
- Meralco Power Generation, Philippines
- Krishnapatnam Port Company Ltd. - India
- The State Trading Corporation of India Ltd
- Kartika Selabumi Mining - Indonesia
- Mintek Dendrill Indonesia
- Carbofer General Trading SA - India
- Electricity Generating Authority of Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Parliament of New Zealand
- MS Steel International - UAE
- Larsen & Toubro Limited - India
- Rashtriya Ispat Nigam Limited - India
- IHS Mccloskey Coal Group - USA
- Edison Trading Spa - Italy
- Straits Asia Resources Limited - Singapore
- Sinarmas Energy and Mining - Indonesia
- Pendopo Energi Batubara - Indonesia
- Eastern Energy - Thailand
- Iligan Light & Power Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Agrawal Coal Company - India
- Borneo Indobara - Indonesia
- Sojitz Corporation - Japan
- Kohat Cement Company Ltd. - Pakistan
- GMR Energy Limited - India
- New Zealand Coal & Carbon
- Deloitte Consulting - India
- Alfred C Toepfer International GmbH - Germany
- Indonesian Coal Mining Association
- Kaltim Prima Coal - Indonesia
- Cement Manufacturers Association - India
- Dalmia Cement Bharat India
- Kobexindo Tractors - Indoneisa
- Coastal Gujarat Power Limited - India
- Semirara Mining Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- SMG Consultants - Indonesia
- McConnell Dowell - Australia
- Gujarat Mineral Development Corp Ltd - India
- Manunggal Multi Energi - Indonesia
- Bayan Resources Tbk. - Indonesia
- India Bulls Power Limited - India
- Gujarat Sidhee Cement - India
- Gujarat Electricity Regulatory Commission - India
- Formosa Plastics Group - Taiwan
- Videocon Industries ltd - India
- Cigading International Bulk Terminal - Indonesia
- South Luzon Thermal Energy Corporation
- Ambuja Cements Ltd - India
- Indogreen Group - Indonesia
- White Energy Company Limited
- GAC Shipping (India) Pvt Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Tata Chemicals Ltd - India
- Metalloyd Limited - United Kingdom
- Semirara Mining and Power Corporation, Philippines
- Rio Tinto Coal - Australia
- GN Power Mariveles Coal Plant, Philippines
- TeaM Sual Corporation - Philippines
- Therma Luzon, Inc, Philippines
- Medco Energi Mining Internasional
- Siam City Cement PLC, Thailand
- Wood Mackenzie - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Kepco SPC Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Timah Investasi Mineral - Indoneisa
- Mercuria Energy - Indonesia
- Attock Cement Pakistan Limited
- Bhatia International Limited - India
- CNBM International Corporation - China
- Altura Mining Limited, Indonesia
- Aditya Birla Group - India
- Australian Commodity Traders Exchange
- Singapore Mercantile Exchange
- Indika Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Minerals Council of Australia
- Sindya Power Generating Company Private Ltd
- The Treasury - Australian Government
- Barasentosa Lestari - Indonesia
- Kideco Jaya Agung - Indonesia
- Sarangani Energy Corporation, Philippines
- Petron Corporation, Philippines
- Chamber of Mines of South Africa
- Ind-Barath Power Infra Limited - India
- Vedanta Resources Plc - India
- Directorate Of Revenue Intelligence - India
- Ministry of Finance - Indonesia
- Power Finance Corporation Ltd., India
- Makarim & Taira - Indonesia
- Aboitiz Power Corporation - Philippines
- Uttam Galva Steels Limited - India
- Australian Coal Association
- VISA Power Limited - India
- Essar Steel Hazira Ltd - India
- Simpson Spence & Young - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Latin American Coal - Colombia
- SN Aboitiz Power Inc, Philippines
- Indian Energy Exchange, India
- Bukit Makmur.PT - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Independent Power Producers Association of India
- International Coal Ventures Pvt Ltd - India
- Romanian Commodities Exchange
- Globalindo Alam Lestari - Indonesia
- Bhoruka Overseas - Indonesia
- SMC Global Power, Philippines
- Sical Logistics Limited - India
- Anglo American - United Kingdom
- Siam City Cement - Thailand
- Oldendorff Carriers - Singapore
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