Moody's sees dip in global shipping earnings in 2022 but still robust

Moody's Investors Service on Monday cut its outlook on the global shipping industry to stable from positive, but said the business will still remain more robust than it did prior to supply disruptions caused by the COVID-19 lockdown. "Earnings for container and dry bulk carriers are at record levels because high demand for goods has overwhelmed supply chains," Moody's analyst Daniel Harlid said in a research note. Earnings will fall from their peak in 2021, but will remain elevated, he said. Demand for goods will remain strong in 2022, but growth rates will likely decline. However, oil tanker charter rates remain at "very low levels" despite an expected recovery in oil demand. "Our expectation is that earnings have troughed and that the next 12 months will at least show a steady development for tanker carriers," Harlid said. Capital spending in the broad shipping sector will continue to increase amid demand for newer and more energy efficient ships in preparation for tougher environmental standards phasing in starting in 2023. Meanwhile, strong demand for iron ore, coal and grains will push up charter rates. Overall, average charter rates for dry bulk vessels are up about 143% in the last 12 months, Moody's said.

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