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