Shipping industry at start of 2-year rally: Morgan Stanley

[LONDON] Shipping is at the start of a two-year rally, led by advancing rates to haul coal, iron ore and grains, as fleet growth slows and China's strengthening economy boosts cargoes, Morgan Stanley said.

Demand for ships will expand at a faster pace than vessels in 2014, the first time in six years that will have happened, New York-based analyst Fotis Giannakoulis said in an e-mailed report on Friday. He upgraded estimates for the industry to "in-line" from "cautious", and said that demand for ships to haul everything from iron ore to grains will benefit most.

The more positive forecast mirrors wider predictions by shipping analysts that the worst of an industry rout is ending. Rates for 10 out of 11 commodity-carrying ships will advance next year, led by a 53 per cent rally for Panamaxes hauling coal and ore, according to the averages of more than 50 analyst estimates compiled by Bloomberg News.