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Fitch negative on shipping’s 2018 prospects

Fitch negative on shipping’s 2018 prospects

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Fitch Ratings’ sector outlook for global shipping remains negative as the ratings agency does not expect a material improvement in market fundamentals in 2018 due to lingering overcapacity.

“Both container and bulk show signs of a revival, but the longevity of this trend remains uncertain due to limited adherence to capacity discipline in the sector. Improving market sentiment and a focus on scale and vessel size have stimulated new orders. The supply and demand dynamics are likely to support container, bulk and LNG rates, but tanker rates could remain under pressure,” Fitch stated in a release.

The tanker shipping segment is the most exposed following a glut of new vessel deliveries in 2017, Fitch claimed.

Fitch expects demand for tankers to grow by around 4% in 2018, roughly matching the expected growth in tanker supply.

Fitch expects container supply growth to be over 5.5% in 2018, outpacing a likely over 4.5% increase in container transport volume growth.

In dry bulk, Fitch was more optimistic anticipating demand will outstrip the growth in vessel supply in 2018.

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Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.

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