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Moody's Investors Service has revised its outlook for the global shipping industry from neutral to negative, saying that while the dry bulk sector is most vulnerable in 2011, it also believes the tanker market faces challenges and the container segment could deteriorate in 2012.
"Even though the demand for shipping services is likely to remain solid in 2011, underpinned by positive trends in world trade, we believe industry conditions will deteriorate over the next 12 to 18 months, primarily because of a continuing oversupply of vessels," the report said.
The rating house said the dry bulk segment is likely to be the hardest hit this year because of a large order book equal to 46 percent of the tonnage on the water, with 80 percent of those ships due for delivery in 2011 and 2012.
That, it predicts, will create supply/demand imbalance that will continue to depress freight rates. Carriers with large numbers of ships on spot charter are likely to be most vulnerable to lower rates than firms with long-term contracts.
The tanker market, Moody's said, has been weak for two years and it doesn't anticipate a sustained recovery until the second half of 2012.
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