Analyst Sea-Intelligence experts expect container shipping to see the current low demand levels persisting, consequently leading to high levels of capacity withdrawals. With the IMF recently updating its outlook for the global economy revising a negative 3% recession for 2020 to a deeper minus 4%, demand for global container shipping is anticipated to take a hit.
In terms of world trade, a previous projection of negative 11% for 2020 is now revised to negative 11.9%, with the 2021 rebound revised down from 8.4% to 8%. The Euro area saw GDP growth projections drop from an already low of negative 7.5% to negative 10.2%.
“This is especially concerning since the region will drive demand to fill the newest generation of ultra-large container vessels,” said Alan Murphy, CEO of Sea-Intelligence.
The IMF projection – if it turns out to be correct – is telling us that the current low demand levels are likely to persist for a while. Consequently, the high levels of capacity withdrawals are also likely to persist. This is a view that is also backed up by the actual capacity withdrawals thus far seen in Q3,” Murphy told seatrade-maritime.com.