With the onset of the Covid-19 pandemic since March 2020, the shipping industry has been adversely impacted due to the adverse impact on demand for segments like containers and dry bulk, ICRA has said in a report.
"While the charter rates in these segments have witnessed pressure with the intensification of pandemic, in recent months with some easing of containment measures and pick-up in economic activity there has been some recovery in rates for the dry bulk segment. The container segment has also witnessed improvement in rates, despite the container volumes continuing to witness contraction. This has been on account of fleet management by liners by idling and blank sailing of vessels," the rating agency has said in its latest report in the shipping sector.
According to it the outlook for both dry bulk and container trade remains negative in the near term due to uncertainty pertaining to the economic recovery, the risks of re-intensification of the pandemic and the containment measures, changes in supply chain and trade patterns.
"The rates are expected to remain volatile and sustainability of recent rate improvement remains
uncertain. The tanker segment had witnessed spike in rates during April and May 2020, despite the steep fall in crude oil prices. This was mainly on account of the increased demand for storage as there was a strong contango witnessed in crude prices making it more favourable to store it," the rating agency has noted.