Shipping outlook no longer negative says Moody’s
Moody's Investor Services has revised its outlook for the shipping sector, which reflects expectations for the coming 12-18 months, up from negative to stable today.
April 30, 2014
Prior to the update, which refers to industry conditions as "tepid," the credit rating and risk analysis corporation had held shipping as negative since June 2011.
Moody's cited cost reductions as the main driving force behind improve EBITDA in the industry. "Bunker fuel prices have receded to around $600 per tonne from their peak of nearly $740 per tonne in February 2012," stated the report. "The lower prices, combined with slow steaming and the use of newer and more efficient vessels, have reduced shippers' fuel costs, contributing to earnings growth."
The firm appraised dry bulk rates as very low but showing signs of improvement and volatility was highlighted, with rates between $10,000 per day and $35,000 per day for capesizes in 2013.
For containers, downward rate pressure from overcapacity was recognised from and scrapping, order cancellation an delays as well as idling vessels were listed as remedies for market symptoms.
Slow GDP growth hampers the fortunes of crude tankers, with Moody's seeing no meaningful sustained increase in rates over the next 18 months.
In its evaluation of listed shipping companies, no entity received a positive outlook, with most hovering at stable. Hapag-Lloyd, Mistui OSK Lines, NYK, Teekay Corporation and both Navios Holdings and Navios Partners hold negative outlooks, with Sovcomflot's ratings currently under review.
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