Latest news from Heavy Lift & Project Forwarding International Magazine

Bleaker outlook for multipurpose sector 

Drewry has downgraded its outlook for the multipurpose shipping market in light of weaker projected global economic growth, greater competition from dry bulk and container sectors, and a lack of ship demolition activity.

The bedrock to multipurpose demand is dry cargo, which is made up predominantly of dry bulk and general cargo, said Drewry. With the ongoing tariff war affecting Chinese steel production, expectations for dry bulk iron ore volumes have weakened over the first half of 2019.  

On the plus side, however, concerns that the same tariffs would affect steel cargoes have proved unfounded. Imports into Europe and the Far East (excluding China), meanwhile, have improved and the overall situation is improving as new trading partners are sought.

Drewry expects dry bulk and general cargo volumes to increase at an average annual rate of around 2 percent in the medium term. 

With regard to competition, the bulk and container markets continue to encroach on the multipurpose sector in both the carriage of breakbulk and project cargo, fuelled, in part, by the increasing containerisation of cargoes, according to Drewry.

Furthermore, with uncertainty rising across the globe due to tariff wars, the rise in populist policies and a slowing Chinese economy, all dry cargo sectors have been affected by slowing demand – and this means greater competition for the cargo that is available.

Ageing vessels represent approximately 12 percent of the multipurpose fleet, and over the first half of the year there has been no indication that owners are starting to scrap this tonnage, added Drewry.  

This all amalgamates into a bleaker forecast for the sector. Drewry said that average rates for a 10,000-15,000 dwt multipurpose vessel at the end of 2018 were approximately USD6,650 per day, but for 2019 they have already slipped by 4 percent to USD6,630 per day. Going forward Drewry sees little possibility of this improving before 2021, unless demolition levels suddenly increase.

Despite the negative indicators, there are reasons to remain hopeful. Project cargo volumes are expected to improve over the second half of 2019, as a number of projects get to the cargo-carrying stage. Drewry said that modern, heavy lift ships should be able to secure improved forward rates.

Equally, if Drewry’s expectations for the trade war are correct and actual cargo demand issues are limited, there is hope that container lines will take a less aggressive stance, allowing the multipurpose fleet to take back more market share. 

www.drewry.co.uk

Heavy Lift | News

Bishop takes AWRS thumbnail image

Bishop takes AWRS

July 18 - Bishop Lifting Products has completed the acquisition of American Wire Rope & Sling (AWRS), a leading provider of rigging, lifting and overhead crane solutions.
Views: 152
CITB readies for Alaska’s ice-free season thumbnail image

CITB readies for Alaska’s ice-free season

July 18 - Cook Inlet Tug & Barge (CITB), a subsidiary of Foss Maritime Company, has announced that the 2019 ice-free season on Alaska’s North Slope are under way.
Views: 123
Sutton steps up at Crowley thumbnail image

Sutton steps up at Crowley

July 18 - Crowley Maritime has appointed Peter Sutton as vice president of operations integrity and health, safety, security and environment (HSSE) for its shipping business unit.
Views: 147
Vangard in office move thumbnail image

Vangard in office move

July 18 - Chennai-based Vangard Logistics has relocated to larger premises within the city.
Views: 107

Heavy Lift Across The World

Discover heavy lift and project logistics industry news from around the world by region.