Global Maritime Industry Update: December 2021
The global maritime industry is undergoing stiff challenges on the back of the ongoing COVID-19 pandemic, which has severely impacted global demand and stalled manufacturing activities (Exhibit 1).
Exhibit 1: Forecast for Main Shipping Markets
Source: BIMCO; Team analysis SG and JBR
The impact of COVID-19 is being witnessed largely on the Chinese manufacturing output that exerted negative pressure on demand for coal and iron ore during the first half of 2020 in line with decline in manufacturing activities. Such a downward shift in manufacturing and production activities have adverse ripple effects on the supply chain that is now being felt by the global shipping industry. Global credit rating agency Moody’s has downgraded the outlook for the global shipping industry from “stable” to “negative” due to the coronavirus outbreak. Further, decline in demand for container and dry bulk shipping services is anticipated to exert downward pressure on the EBITDA of market participants. Oxford Economics predicts that “despite renewed restrictions in a number of economies in recent months, the growth rate of trade in 2021 will be strong.” They expect world trade volumes to expand by around 9 percent in 2021, after slumping by 7 percent in 2020.
Figure 1: Development of International Maritime Trade and Global Output (2006–2021)
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