KUALA LUMPUR (Dec 6): Moody’s Investors Service has changed the outlook for the global shipping industry to stable from positive for the next 12- to 18 months due to demand slightly outstripping supply.

The credit rating agency said the change in outlook is driven by tough comparisons with the very strong cash flows generated this year, rather than a deteriorating business environment.

“Indeed, business and financial conditions will remain solid but they are unlikely to get better than they already are today.

“Earnings for container and dry bulk carriers are at record levels, however, we expect earnings to fall from their 2021 peak but remain high,” senior analyst Daniel Harlid said in a statement on Monday (Dec 6).

Nevertheless, he said limited deliveries of new vessels next year would help keep freight rates at elevated levels.

He said although demand for goods and commodities remained high and would stay robust in 2022, growth rates have most likely peaked and would start to decelerate next year and record-high profitability and cash flow generation have been used to pay down debt.

However, he said capital spending of shipping companies would continue to increase.

“Therefore, Moody’s expects orders for newer and more energy-efficient ships to continue to be a theme during 2022 as shipping companies prepare for stricter environmental regulations that will gradually be phased in from 2023,” he added.

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