Despite low oil prices dampening fuel costs, Standard & Poor’s new research report on the outlook for the shipping industry suggests that 2016 will not be plain sailing. Oversupply in global fleets will not be adequately matched by demand for trade in goods or commodities, mainly as a result of slower than expected Chinese economic growth and trade.
In addition, charter rates – the costs of hiring ships – will remain below break-even costs for operators, while expensive lending to the sector will further constrain outlooks. Any potential rise in oil prices, meanwhile, will worsen conditions, as fuel prices with rise and demand for ‘floating storage’ – that is, ships hired for the primary use of storing oil in an environment of inexpensive commodities – will decrease.
After targeted outreach from Moorgate, the report was picked up across the specialist shipping press, including Ships and Ports, SeaTrade Martime News, Trade Winds (behind a paywall), Hellenic Shipping News Worldwide, and the International Transport Journal.