Standard and Poor have reported that shipping rates will increase over the next year after banks imposed tougher lending conditions. Rates for shipping vessels have fallen below their 10 year average by between 30 and 80%.
Ships that were ordered during the industry’s boom and now entering the merchant fleet, and with rising fuel costs and a sbdued global trade market, the value of assets is declining, and lending is harder to find.
S&P analyst Izabela Listowska said;
‘We think further shipping company defaults and financial restructurings are likely over the next few quarters. We expect asset values and the performance and credit quality of shipping companies to remain weak.’