Fitch revises shipping outlook to stable
Time：2014-12-08
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In a newly-published report, Fitch says performance will vary across segments with tanker, and, to a lesser extent, dry-bulk shipping demonstrating moderate improvements, the LNG and offshore segments maintaining their sound performance, and container shipping remaining under pressure.The ratings agency expects that overcapacity will remain the key factor underlying the shipping sector’s weakness in 2015, although to a varying degree, depending on the segment. We expect weak supply/demand fundamentals in container shipping in 2015 as capacity expansion is likely to continue to outstrip demand growth, but forecast a visible improvement in the supply/demand balance in tanker shipping.
Freight rates will likely remain volatile across all shipping segments, adds Fitch, which forecasts that container freight rates will remain weak in 2015. Nonetheless, a recovery in tanker rates, supported by moderating supply growth and growing oil consumption, is expected.
According to Fitch, rigorous cost management along with the recovery in some segments to support an improvement in shipping companies’ financial profiles in 2015. An expected moderation in bunker prices and continued slow steaming will also contribute to cost reductions.
Shipping companies that manage to achieve an operating profit are likely to improve their credit metrics in 2015. However, the ratings agency says it expects leverage ratios will remain high, keeping the companies’ creditworthiness in line with low and mid-level speculative-grade ratings