June 29 - According to the latest Multipurpose Shipping Market Review and Forecaster report published by Drewry, the demand outlook for the multipurpose fleet has not improved since the first quarter of 2016.
The report claims that the breakbulk and project cargo sector remains weak, with little suggestion that volumes will improve significantly until the end of 2017.
On the other side of the coin, Drewry notes that the supply of multipurpose vessels is currently under control, with an order book equivalent to just 5 percent of the operating fleet and growth estimated at less than 0.5 percent per year between now and 2020.
However, according to the shipping consultancy, it is the oversupply of the competing fleets that continues to erode the market share available to the multipurpose sector and in turn any positive growth
Drewry believes that improvement in this sector is under way, but still some way off, noting that the multipurpose shipping community can do little to improve the demand for these vessels, at a time when projects are being cancelled and steel production halted.
Despite this, Drewry feels that there is something that can be done on the supply side, with many viewing the market overcapacity in the bulk and container sectors as a problem that is not 'theirs'. The consultancy points out that there are over 600 multipurpose vessels trading that are over 25 years old - amounting to 20 percent of the operating fleet (in numbers).
Although these vessels generally only compete in the breakbulk trades, that is where the cargo is at the moment, and so, they compete across the majority of the fleet, stated Drewry.
"This competition will impact rates across the sector as high specification project carriers will need to carry any cargo to fulfil their investors' requirements," commented Susan Oatway, lead analyst for multipurpose shipping at Drewry.