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Standard & Poor’s issues negative outlook on shipping prospects

A 10-page report into shipping prospects for 2016 issued today by ratings agency Standard & Poor’s makes for grim reading.

The company, which tracks 16 shipping companies across the world, only had positive words to say about tanker firms.

“[W]e 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,” S&P warned.

As well as slowing China growth, S&P said ship operators will continue to face “structural and chronic oversupply” in their markets. The report hit out at the “poor supply discipline” among shipowners.

On dry bulk, S&P does not anticipate any year-on-year rebound in average charter rates in 2016 because it does not see any immediate demand-side stimulus or supply-side relief.

For containerlines, S&P said they are experiencing “severe freight-rate volatility and downward pressure on the primary and secondary routes that has intensified in recent months”, a trend the agency expects to continue into the next year.

“Another round of consolidation is likely among container liners in search of cost efficiencies and stronger bargaining positions,” S&P suggested.



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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