Low demand growth will continue into 2020, with carriers struggling to increase freight rates enough to cover the additional costs of the IMO 2020 sulphur cap compliance. Fleet growth is lower then last year, but still too high compared to demand growth.
The fundamental balance will continue to deteriorate in 2020, offering little support to operators hoping to pass on higher fuel costs, caused by the sulphur cap, to shippers.
Strengthening global growth could be derailed by a range of factors this year, including the coronavirus outbreak and a further escalation of trade tensions across the world.
High fleet growth in 2019 and the coronavirus in China are clouding the outlook for 2020, despite the expected lower fleet growth.
The outbreak of the novel coronavirus, recently dubbed COVID-19, continues to generate massive economic and financial uncertainty when it comes to China and global shipping.
The outbreak of the novel Coronavirus has dented market sentiment and spooked markets around the globe. When China sneezes, we all catch the flu. This especially holds true for the commercial shipping markets, which remain heavily reliant upon China, both on the import and export side.