Moody’s Investors Service has changed its view of shipping against a background of strong demand for goods and commodities. The US credit ratings agency upgraded its outlook to positive over the next year to 18 months, from stable previously, as the global economy recovers from the Covid-19 pandemic.

Moody’s expects the aggregate Ebitda of shipping companies it assesses to grow by around 29% this year. “The change in outlook to positive reflects our view that demand will significantly outpace supply in key shipping segments for the rest of this year and likely into 2022, as growth in the global fleet remains muted,” said Daniel Harlid, Moody’s vice president and senior analyst.

“The pandemic has also put the vulnerability of just-in-time supply chains back on the corporate agenda and could potentially lead to more regionalization, resulting in both supply and production moving closer to the end customer and a reconfiguration of a number of shipping routes.” Moody’s is tipping bulker fleet growth of 1% this year to 925m dwt, but vessel demand is set to increase between 3% and 5%.

The agency also expects the boxship fleet to grow 4% this year to 24.55m teu, with demand rising between 5% to 7%. And tankers should see supply growth of 2% to 527m dwt, with demand increasing 6%, Moody’s said. “We believe demand will outstrip supply significantly in the container shipping and dry bulk segments, driven not only by robust demand but also by historically low orderbooks for new vessels,” the agency said. “Weaker market conditions for the tanker segment could improve towards year-end.”

The upgrade is another positive sign for owners enjoying record rates in some sectors. Moody’s had maintained a stable outlook on the industry since November 2020. The agency expects further strengthening of bulker markets. The company assesses average rates as 70% higher than before the Covid-19 outbreak early last year. “Charter rates will likely remain high, especially over the next six months,” Moody’s said. The same goes for boxships, with Moody’s saying: “We expect freight rates to remain at their current record levels throughout the remainder of this year and possibly continue at high levels during 2022.”

Tankers are expected to continue on a stable footing at worse. Financial performance in 2020 was inflated by extremely high charter rates during the second quarter as oil prices plummeted and demand for floating storage peaked, Moody’s argued. “Charter rates have subsequently fallen back to pre-coronavirus levels or below, but could improve towards the end of 2021,” the company said. “As coronavirus-induced restrictions abate globally during the course of this year demand for oil should continue to pick up, offering an increasingly supportive environment for the tanker market.”

The International Energy Agency (IEA) expects global oil demand to reach pre-pandemic levels in 2022, growing by around 6% in 2021 and 3% next year. However, Moody’s warned all its forecasts are based on the assumption that the global economy will continue to recover from the pandemic as vaccinations are rolled out.