Ratings Agency Warns Ships Could Go Idle Again But So Far So Good
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In 2010, the shipping industry rebounded from the 2009 crisis, boosted by a 12 percent increase in container trade volumes and concerted efforts by players to reduce their operating costs. “While Moody’s expects volumes to grow at a more moderate pace of 5-6 percent in 2011, it believes the positive growth momentum will aid the ongoing recovery of all the main operators,” says Marco Vetulli, a Senior Vice President in Moody’s Corporate Finance Group.
In 2010, the shipping industry rebounded from the 2009 crisis, boosted by a 12 percent increase in container trade volumes and concerted efforts by players to reduce their operating costs. “While Moody’s expects volumes to grow at a more moderate pace of 5-6 percent in 2011, it believes the positive growth momentum will aid the ongoing recovery of all the main operators,” says Marco Vetulli, a Senior Vice President in Moody’s Corporate Finance Group. “Nevertheless, issuers’ credit metrics are likely to weaken slightly compared with 2010, which was a stellar year for the industry,” adds Mr Vetulli.
Infographic Source: Spiegel
While oversupply plagued the industry in 2009, Moody’s expects supply to be broadly in line with demand in 2011. However, the reactivation of idle ships could upset this fragile balance. Industry dynamics are likely to remain fragile over the next decade as the industry is entering a more mature phase in its life cycle, characterised by lower growth rates. Moody’s central scenario remains that of a sluggish rebound in advanced economies in 2011-2012, although the downside risks have recently heightened.
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