Global shipping outlook stable, says Moody’s
The outlook for the global shipping sector into 2020 will remain stable, as higher expected earnings are counterbalanced by the US-China trade tensions and worldwide regulatory risks, says Moody’s Investors Service in a sector report.
It said the key drivers of the stable outlook were a combination of anticipated earnings before interest, taxes, depreciation and amortization (EBITDA) growth of 16% to 18% into 2020, (although from a relatively low base in 2018) and largely balanced demand and supply growth.
These positives were offset by downside risks from protectionist trade policies and increasing regulation, it said.
“The global shipping industry is facing a number of challenges into 2020, including the effects of International Maritime Organization’s 2020, which will likely lead to rising fuel costs, as well as geopolitical uncertainties, such as trade conflicts, especially the US-China trade dispute,” said Moody’s vice president-senior analyst, Maria Maslovsky.
“The outlook on the tanker segment has turned stable from negative, with charter rates rising as demand improves and oversupply becoming less of an issue, as a result of reduced ordering and increased idling,” it added.