SINGAPORE: The global shipping market is set for a recovery, benefiting from new global rules on marine fuels that came into effect at the beginning of the year after more than a decade of tough market conditions, according to IHS Markit.
In the biggest shake-up for the oil and shipping industries in decades, the IMO banned from the start of 2020 ships from using fuels with a sulphur content above 0.5%, compared with 3.5% previously, unless they are equipped with sulphur-stripping devices known as scrubbers. “Considering the fact that fleet supply will likely tighten due to scrubber retrofitting and potential demolitions, given that demand remains healthy, we may see stronger freight rates this year,” said Dalibor Gogic, principal analyst at IHS Markit.The dry bulk market, whose fleet is expected to grow 3% in 2020 compared with 3.8% in 2019, is on a long-term recovery cycle, primarily driven by supply normalisation, said IHS.
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