June 27 - Many key drivers for dry cargo demand have reported a significant uptick in 2017, resulting in improving conditions for vessels in the multipurpose shipping sector, according to global shipping consultancy Drewry.
The latest Multipurpose Shipping Market Review and Forecast report explained that most of the demand drivers for the breakbulk sector have strengthened from the lowest levels seen in 2016, with the trend forecast to continue in the medium term at least.
The exception is the price of oil for which forecasts suggest is unlikely to rise over USD55 a barrel for the next few years. Whether that is sufficient to rekindle investors' interests or not remains a moot point, says Drewry.
The report explains that the demand for breakbulk commodities and project cargo comes from a wide variety of sources. It is affected by drivers ranging from crude steel production and oil prices to global GDP and investor confidence, with some being more tangible than the others. Some of these drivers are also affected much more by political influences and outside events.
The report suggests that there are already signs of improvement in the competing bulk and container shipping sectors, which has led to an increase in market share for project carriers, as some container lines have shown a reduced interest in the more problematic heavy and over-dimensional cargoes.
The "simple" multipurpose fleet is declining at approximately two percent per annum, whilst project carriers with lift capability greater than 100 tonnes are growing at three percent per annum. This gives an overall fleet growth of just 0.2 percent per annum for the medium term.
"Whilst we believe that 2017 will be slow, the prospects for the second half of the year and into 2018 continue to strengthen and give rise to our optimism for this sector," comments Susan Oatway, lead analyst for multipurpose shipping at Drewry.