Sluggish container trade outlook with slowdown in world trade

Time:2015-10-26 Browse:60 Author:RISINGSUN
THE outlook for the container shipping industry will remain sluggish for another three years, according to Drewry Maritime Research.

The industry this year is forecast to grow by 2.2 per cent, down from an earlier forecast of 4.3 per cent growth mainly due to a slowdown in world trade and the bloated box ship orderbook.

Macro-economic headwinds in China coupled with volatility in global markets prompted the US Federal Reserve to hold the federal funds rate near the zero level in its September meeting. Economists expect that there is a thin possibility of the Fed raising rates this year with muted third quarter job growth data and lower-than-expected retail sales.

Meanwhile, the International Monetary Fund (IMF) has downgraded the global economic forecast for 2015 and 2016 alluding to the deceleration in major emerging markets, falling commodity prices and an expected increase in US interest rates.

The weak macro environment was reflected by the throughput figures of most of the terminal operators at sea ports in Drewry`s coverage. The slowing global growth has severely affected shares of port operators, which are already trading at levels near their 52-week lows. Sector volatility is set to continue as companies report their third quarter results in the coming weeks.