JEDDAH — The outlook for the global shipping sector into 2020 will remain stable as higher expected earnings are counterbalanced by US/China trade tensions and worldwide regulatory risks, said Moody's Investors Service in a sector report published Tuesday.

The key drivers of the stable outlook are a combination of anticipated EBITDA growth of 16%-18% into 2020 (although from a relatively low base in 2018) and largely balanced demand and supply growth. These positives are offset by downside risks from protectionist trade policies and increasing regulation.

"The global shipping industry is facing a number of challenges into 2020, including the effects of IMO 2020, which will likely lead to rising fuel costs, as well as geopolitical uncertainties, such as trade conflicts, especially the US-China trade dispute," said Maria Maslovsky, a Moody's Vice President – Senior Analyst.

The outlook on the tanker segment has turned stable from negative with charter rates rising as demand improves and oversupply becoming less of an issue as a result of reduced ordering and increased idling. — SG