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India Ratings maintains negative-to-stable outlook for shipping

BS Reporter New Delhi
Last Updated : Aug 04 2015 | 12:38 AM IST
India Ratings and Research has maintained a negative-to-stable outlook for the shipping sector for FY16. The agency expects the performance of dry bulk and container operators to continue to be affected by weak global trade growth and persistent overcapacity, while the offshore segment will face the negative impact of lower crude oil prices.

However, the agency believes that the tanker segment, which accounts for a majority of the Indian fleet, will remain an exception due to its better demand-supply situation. In its report, it says the oversupply in the dry bulk segment along with weaker demand conditions, particularly in China, kept freight rates low throughout FY15. The agency expects the segment to be under pressure again in FY16, as overcapacity will persist and demand growth will remain subdued.

Further, continued increase in global container capacity (FY15: 6.2 per cent; FY14: 5.6 per cent) coupled with subdued demand conditions have led to a decline in container freight rates across most routes since the start of 2015. The agency expects freight rates to stay under pressure for the rest of FY16, as global capacity growth will continue to outstrip demand growth.

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As a result, the operating margins of container operators will decline in FY16. provided by the information ministry. The ministry has said the panel's mandate would be two-fold. It will 'facilitate granting of permissions for both foreign as well as domestic producers from relevant authorities of central and state governments'.

It would also meet regularly to monitor the facilitation process and issue directions to the authorities concerned.

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First Published: Aug 04 2015 | 12:15 AM IST

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