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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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Thursday, 05 November 20
THE INDONESIA COAL PRICE REFERENCE RISES FOR SECOND CONSECUTIVE MONTH
COALspot.com: The Indonesia Coal Price Reference rose for a 2nd month by 9.24% month on month. The Indonesia Coal Price Reference for the month of ...
Wednesday, 04 November 20
PHILIPPINES COAL MORATORIUM HIGHLIGHTS DRAMATIC PIVOT TO RENEWABLE ENERGY INVESTMENT FOR LOWER PRICES AND POWER SYSTEM RESILIENCE - IEEFA
Policymakers and industry leaders ready to embrace new energy technologies
The Department of Energy’s call for a moratorium on ...
Wednesday, 04 November 20
FOREIGN INVESTORS FACE TOUGH TIMES CLOSING VIETNAM’S REMAINING COAL POWER DEALS - IEEFA
Project bankability at risk as new regulations threaten usual contractual terms
Foreign investors will face higher-than-usual risks ...
Wednesday, 04 November 20
MARKET INSIGHT - INTERMODAL
As the end of the year approaches, one would definitely notice that the newbuilding orderbook for bulk carriers is significantly smaller compared t ...
Monday, 02 November 20
PHILIPPINES GOVERNMENT SAYS NO TO NEW COAL PLANT PROPOSALS - IEEFA | 24 PILIPINAS
The Duterte administration will no longer accept proposals to construct new coal power plants, a dramatic shift in energy policy that counts on dec ...
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- Gujarat Electricity Regulatory Commission - India
- Asmin Koalindo Tuhup - Indonesia
- Port Waratah Coal Services - Australia
- Sinarmas Energy and Mining - Indonesia
- GAC Shipping (India) Pvt Ltd
- Siam City Cement PLC, Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Rio Tinto Coal - Australia
- Karaikal Port Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Indo Tambangraya Megah - Indonesia
- VISA Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- European Bulk Services B.V. - Netherlands
- Planning Commission, India
- TNB Fuel Sdn Bhd - Malaysia
- Kobexindo Tractors - Indoneisa
- Mintek Dendrill Indonesia
- Bayan Resources Tbk. - Indonesia
- Parry Sugars Refinery, India
- Wood Mackenzie - Singapore
- Semirara Mining Corp, Philippines
- Ministry of Transport, Egypt
- Essar Steel Hazira Ltd - India
- Kepco SPC Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- Timah Investasi Mineral - Indoneisa
- Orica Mining Services - Indonesia
- Grasim Industreis Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Mjunction Services Limited - India
- Bulk Trading Sa - Switzerland
- Globalindo Alam Lestari - Indonesia
- Trasteel International SA, Italy
- Holcim Trading Pte Ltd - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Directorate General of MIneral and Coal - Indonesia
- The State Trading Corporation of India Ltd
- Pendopo Energi Batubara - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Standard Chartered Bank - UAE
- IHS Mccloskey Coal Group - USA
- Gujarat Mineral Development Corp Ltd - India
- GVK Power & Infra Limited - India
- Deloitte Consulting - India
- Edison Trading Spa - Italy
- Antam Resourcindo - Indonesia
- Samtan Co., Ltd - South Korea
- Sojitz Corporation - Japan
- Energy Link Ltd, New Zealand
- Kohat Cement Company Ltd. - Pakistan
- Coastal Gujarat Power Limited - India
- Merrill Lynch Commodities Europe
- ICICI Bank Limited - India
- Ind-Barath Power Infra Limited - India
- Tamil Nadu electricity Board
- Rashtriya Ispat Nigam Limited - India
- Bharathi Cement Corporation - India
- Vijayanagar Sugar Pvt Ltd - India
- Sakthi Sugars Limited - India
- Kumho Petrochemical, South Korea
- Therma Luzon, Inc, Philippines
- SMG Consultants - Indonesia
- Bukit Makmur.PT - Indonesia
- Central Java Power - Indonesia
- Jaiprakash Power Ventures ltd
- Indian Energy Exchange, India
- Metalloyd Limited - United Kingdom
- Attock Cement Pakistan Limited
- Straits Asia Resources Limited - Singapore
- Marubeni Corporation - India
- Lanco Infratech Ltd - India
- Heidelberg Cement - Germany
- Central Electricity Authority - India
- Bahari Cakrawala Sebuku - Indonesia
- Bhatia International Limited - India
- Ministry of Finance - Indonesia
- Toyota Tsusho Corporation, Japan
- Semirara Mining and Power Corporation, Philippines
- Star Paper Mills Limited - India
- Kaltim Prima Coal - Indonesia
- Renaissance Capital - South Africa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Wilmar Investment Holdings
- Binh Thuan Hamico - Vietnam
- McConnell Dowell - Australia
- Meralco Power Generation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Carbofer General Trading SA - India
- SN Aboitiz Power Inc, Philippines
- Simpson Spence & Young - Indonesia
- Parliament of New Zealand
- Vedanta Resources Plc - India
- PNOC Exploration Corporation - Philippines
- Uttam Galva Steels Limited - India
- Makarim & Taira - Indonesia
- Ministry of Mines - Canada
- Madhucon Powers Ltd - India
- Dalmia Cement Bharat India
- Jindal Steel & Power Ltd - India
- Economic Council, Georgia
- Borneo Indobara - Indonesia
- Baramulti Group, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Vizag Seaport Private Limited - India
- Thiess Contractors Indonesia
- Cigading International Bulk Terminal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Salva Resources Pvt Ltd - India
- Siam City Cement - Thailand
- Billiton Holdings Pty Ltd - Australia
- Jorong Barutama Greston.PT - Indonesia
- Iligan Light & Power Inc, Philippines
- Price Waterhouse Coopers - Russia
- Orica Australia Pty. Ltd.
- Medco Energi Mining Internasional
- Agrawal Coal Company - India
- Cement Manufacturers Association - India
- Bukit Asam (Persero) Tbk - Indonesia
- LBH Netherlands Bv - Netherlands
- MS Steel International - UAE
- OPG Power Generation Pvt Ltd - India
- Sical Logistics Limited - India
- Kapuas Tunggal Persada - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Formosa Plastics Group - Taiwan
- Gujarat Sidhee Cement - India
- Eastern Energy - Thailand
- New Zealand Coal & Carbon
- Altura Mining Limited, Indonesia
- Australian Commodity Traders Exchange
- Global Business Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Sarangani Energy Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Eastern Coal Council - USA
- IEA Clean Coal Centre - UK
- Kartika Selabumi Mining - Indonesia
- Kideco Jaya Agung - Indonesia
- ASAPP Information Group - India
- PetroVietnam Power Coal Import and Supply Company
- Ambuja Cements Ltd - India
- Commonwealth Bank - Australia
- Bhushan Steel Limited - India
- The Treasury - Australian Government
- Posco Energy - South Korea
- Larsen & Toubro Limited - India
- Coal and Oil Company - UAE
- India Bulls Power Limited - India
- San Jose City I Power Corp, Philippines
- Xindia Steels Limited - India
- Romanian Commodities Exchange
- SMC Global Power, Philippines
- Aditya Birla Group - India
- Sindya Power Generating Company Private Ltd
- Directorate Of Revenue Intelligence - India
- Africa Commodities Group - South Africa
- Sree Jayajothi Cements Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Electricity Authority, New Zealand
- Banpu Public Company Limited - Thailand
- Bangladesh Power Developement Board
- Mercuria Energy - Indonesia
- Indogreen Group - Indonesia
- Bukit Baiduri Energy - Indonesia
- Minerals Council of Australia
- Georgia Ports Authority, United States
- TeaM Sual Corporation - Philippines
- CNBM International Corporation - China
- Malabar Cements Ltd - India
- Goldman Sachs - Singapore
- Riau Bara Harum - Indonesia
- Anglo American - United Kingdom
- Electricity Generating Authority of Thailand
- Oldendorff Carriers - Singapore
- Latin American Coal - Colombia
- Maheswari Brothers Coal Limited - India
- Global Green Power PLC Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Chamber of Mines of South Africa
- Indonesian Coal Mining Association
- Singapore Mercantile Exchange
- Videocon Industries ltd - India
- Barasentosa Lestari - Indonesia
- Indika Energy - Indonesia
- Interocean Group of Companies - India
- Miang Besar Coal Terminal - Indonesia
- Independent Power Producers Association of India
- Aboitiz Power Corporation - Philippines
- PowerSource Philippines DevCo
- Intertek Mineral Services - Indonesia
- Tata Chemicals Ltd - India
- The University of Queensland
- Mercator Lines Limited - India
- Chettinad Cement Corporation Ltd - India
- White Energy Company Limited
- Indian Oil Corporation Limited
- AsiaOL BioFuels Corp., Philippines
- International Coal Ventures Pvt Ltd - India
- Energy Development Corp, Philippines
- CIMB Investment Bank - Malaysia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhoruka Overseas - Indonesia
- Australian Coal Association
- PTC India Limited - India
- Meenaskhi Energy Private Limited - India
- Leighton Contractors Pty Ltd - Australia
- Thai Mozambique Logistica
- London Commodity Brokers - England
- GMR Energy Limited - India
- Alfred C Toepfer International GmbH - Germany
- Petron Corporation, Philippines
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