Moody’s: Steady Winds Ahead for Global Shipping Industry

The outlook for the global shipping industry is stable, according to Moody’s Japan K.K., reflecting expectations for low single-digit percentage aggregate year-over-year EBITDA growth for its rated shipping companies during the coming 12-18 months.

“This growth rate is lower than the mid-to-high single-digit range we expected earlier in the year because some companies have reduced their demand expectations and freight rates remain low amid oversupply,” says Mariko Semetko, a Moody’s Vice President and Senior Analyst.

“The EBITDA growth will be driven primarily by continued cost reductions stemming largely from weak oil prices, which reduce shipping companies’ fuel costs and keep demand high for oil tankers,” adds Semetko.

Moody’s also expects that the prices for bunker fuel will remain low over the outlook period, in line with expectations for crude oil prices to which bunker fuel prices are correlated. Fuel is a significant expense for shipping companies and low fuel costs therefore facilitate EBITDA growth, particularly for containership operators.

However, while the outlook for each of the three main shipping segments — dry bulk, container ships and tankers — is stable, business conditions, such as demand and supply, vary.

EBITDA growth will likely be lowest for the dry bulk segment because China’s economic slowdown will keep demand low, while excess supply will remain most pronounced in the containership segment, particularly in 2015, but EBTIDA growth is expected from fuel-cost savings over the outlook period. By contrast, weak crude oil prices will continue to drive demand and EBITDA growth for tankers, Moody’s adds.

Moody’s believes that downside risks remain high and would consider changing the outlook to negative if signs emerged that the growth in shipping supply will exceed demand growth by more than 2%, or that aggregate EBITDA will decline by more than 5% year over year.

On the other hand, Moody’s would consider a change to a positive outlook if the oversupply of vessels declines materially and aggregate year-over-year EBITDA growth appears likely to exceed 10%.

The industry outlook has been stable since April 2014, when Moody’s changed it from negative.

Share this article

Follow World Maritime News

In Depth>


<< Apr 2020 >>
30 31 1 2 3 4 5
6 7 8 9 10 11 12
13 14 15 16 17 18 19
20 21 22 23 24 25 26
27 28 29 30 1 2 3

The 9th Annual Event Green Shiptech China Congress 2020

The 9th Annual Event- Green Shiptech China Congress 2020 will be held on next…

read more >

Belgian Offshore Days 2020

During this event, a conference will be held with focus on “Increasing value by data driven innovation…

read more >

Europort Romania

Europort Romania is the premier maritime networking event of the Black Sea and will connect maritime technology and service suppliers with high level professionals from Romania and surrounding shipbuilding markets.

More info

read more >


The future of the maritime sector is the point of focus during Maritime Industry 2020.

read more >