“We expect that rating activity will continue to be weighted towards downgrades this year, as our negative outlooks on one-quarter of the rated shipping portfolio indicate,” said the agency’s report. “A sharper slowdown in Chinese economic growth, a sudden rebound in oil prices, or a more extensive ordering of new ships than we currently envisage pose the biggest downside risks to credit quality.”
S&P noted that its 16 ratings of shipping stocks were already “relatively low” at between BB and B. The agency downgraded Navios Maritime Holdings from B to B- earlier this month. It said a recovery in bulk and container charter rates was highly unlikely this year, given that any impact from increased scrapping would likely be absorbed by deliveries of new vessels, although it did point out that "stronger than expected Chinese economic growth would be a potential upside.”
Overall S&P was confident that that "the vast majority of shipping companies that we rate are relatively well-positioned to navigate the difficult operating conditions over the coming year,” it said, citing Wan Hai Lines and BW Group in particular as both having “strong” liquidity.
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