Fleet Financing

Daily update: April 19, 2021

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The coal industry faces an aggravating conundrum. How can coal retain its relevance in relation to renewable energies in the face of both the acceleration of the pandemic of its decline of several years and the growing urgency of the energy transition?

The combination of the abrupt halt in activity imposed by coronavirus containment measures in 2020 and the sustainable post-economic downturn reconstruction approaches adopted by countries around the world in 2021 did not immediately eliminate coal from the mix. global energy. After global coal consumption fell by 7%, or more than 500 million tonnes, between 2018 and 2020, coal use is likely to increase by 2.6% this year and eventually stabilize by 2025, according to the International Energy Agency. In the United States, closures have already hit critical parts of the country, and the industry’s decline is expected to continue although the US Energy Information Administration predicts that coal production will increase 8.6% year-to-year. the other in 2021.

“In the United States, despite the easing of competitive pressures resulting from rising natural gas prices and the expected recovery in demand for coal in 2021, the outlook for coal is not improving over the medium term,” he said. declared the IEA in its annual outlook.

While long-term dependence on coal may remain prevalent in Asian economies, the next five years will be important in laying the groundwork for the expiration of coal in the U.S. The pro-coal Trump administration has not been able to Supporting the sector and President Joe Biden’s ambitious climate policy plans place renewable energy production at the center of the country’s economic development.

“America’s coal fleet is on the verge of extinction,” Michael Gerrard, director of the Sabin Center for Climate Change Law at Columbia University, told S&P Global Market Intelligence. “Power plants are old, expensive to maintain and increasingly unable to compete with natural gas and renewables.”

Coal companies operate in a difficult financing environment, further complicated by the COVID-19 crisis, as market forces and investor sentiment prioritize climate protection and reduce carbon emissions. Global fossil fuel funding fell 9% last year, according to a recent report from a group of global environmental organizations including Rainforest Action Network, BankTrack, the Indigenous Environmental Network, Oil Change International , Reclaim Finance and the Sierra Club. An analysis by S&P Global Market Intelligence found that the high probability of default that the US coal industry faced in March 2020 has since stabilized, but many US coal companies are still currently struggling with significant hurdles to letting them down. access to capital.

“Access to capital has not changed for the US-based coal companies. It is still very limited and very constrained… It is still difficult to raise capital. It is always difficult to make a profit because that we are faced with continuous thermal conditions. [coal] decline. This trend has not reversed and we do not expect it to reverse, ”said Vania Dimova, analyst at S&P Global Ratings. “It’s just kind of a slow decline, and companies are going to have to catch up on their balance sheets to make sure they can maintain debt levels, then keep pushing deadlines or hopefully improving the balance sheet to. power to bear these burdens.

Today it’s Monday, April 19, 2021 and here is the essential intelligence of today.

Uncertainty in the global economy

Hospitals fight burnout, compete for nurses as pandemic causes staffing problems in United States

U.S. hospitals are still seeing the effects of a tight labor market due to the COVID-19 pandemic, although federal funding and the vaccine rollout could offer some relief to the industry.

—Read the full article from S&P Global Market Intelligence

Market dynamics

Aluminum premiums are high on recovery in demand, supply chain disruption and persistent pricing impacts

If the old adage that water always finds its lowest point is correct, global aluminum markets must be dry as a bone. It’s no secret that regional aluminum premiums from Asia to Europe to the Americas are currently all at record levels for several years. So what is driving the high aluminum premiums? There is no single answer and the dynamic is global, rather than limited to one region or another.

—Read the full article from S&P Global Platts

The credit cycle

Business Risk Assessment of Local U.S. Broadcasters

The broad reach of homes allows broadcasters to better negotiate retransmission agreements with pay-TV distributors and earn more national advertising dollars.

: Read the full report from S&P Global Ratings

Technology and Media

Listen to: Episode 11: AI / ML Maturity and Pandemic Effects

The past year has seen a maturation in the use of artificial intelligence and machine learning (AI / ML). He was also whipped by the pandemic. Peter Licursi, product manager for the natural language processing team with Kensho and Nick Patience, founder of 451 Research and research director for the AI ​​Applications and Platforms practice, join host Eric Hanselman to discuss the evolution of the use of AI / ML. It turns out that there is more cloud and less need for data scientists, for those who do things right.

—Listen and subscribe to Next in Tech, a podcast from S&P Global Market Intelligence

The future of energy and raw materials

Listen: The New Regulations Have Broad Implications For Mexico’s Mid-Size Energy Sectors

The Mexican government recently released a series of regulations in the mid-size and power sectors that have had far-reaching implications. S&P Platts spoke to Diego Campa de Campa and Mendoza Associates, a Mexico City law firm, about the most relevant measures, how businesses can use the courts to end regulations, and how whose recent regulations could evolve in the legal system.

—Listen and subscribe to Commodities Focus, a podcast from S&P Global Platts

Bunkering poles to increase their market share as more and more fuel types emerge

The recent trend of large ports to take a growing share of the bunker fuel market to the detriment of small ports could accelerate in a context of increasing diversification of offers.

—Read the full article from S&P Global Platts

Taiwan’s Evergreen Weighs Arrested Goods Transfer Options

Taiwan’s Evergreen Marine Corp, operator of the container ship arrested by Suez Canal authorities and with thousands of containers stranded on it, is exploring the possibility of transferring the cargo to another vessel, while demands for compensation are currently being challenged and submitted to justice.

—Read the full article from S&P Global Platts

FERC heavy transmission meeting sparks debate on setting up RTO network incentive

On April 15, the Federal Energy Regulatory Commission announced several measures related to power grid expansion, including a new coordination effort with state regulators and a workshop to explore the possibility for businesses share consumer savings generated by network enhancement technologies.

—Read the full article from S&P Global Market Intelligence

Global steel imbalances present second quarter export opportunities

Acute coil shortages in Europe and the United States have caused steel prices to hit their highest level since 2008 and have attracted export interest from Asian factories – and the situation does not look likely to change. until steel production resumes from the second half of the year, which means export. opportunities will prevail in Q2.

—Read the full article from S&P Global Platts

Written and compiled by Molly Mintz.

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