January 4 - According to the latest Multipurpose Shipping Market Review and Forecaster report, published by Drewry, the multipurpose shipping market will see the first signs of recovery by the end of 2017.
Susan Oatway, lead analyst for multipurpose shipping at Drewry stated: "Slow growth in supply, alongside better growth in demand, is expected to help multipurpose charter rates in 2017 and beyond, supported by a recovery in the dry bulk market, albeit a slow one. In particular, the oversupply situation, which has dogged this sector for many years, is expected to level out in the medium term."
The report claims that dry cargo demand is weak but is strengthening with the multipurpose shipping market's share expected to grow at just under 2 percent per year to 2020. Demolition levels are up in both the multipurpose and competing sectors, whilst newbuilding ordering has declined, which will result in minimal multipurpose fleet growth to 2020.
According to the report, the future market prospects for the multipurpose shipping sector are not only dependent on the supply-demand balance for that segment, but also on the other vessels that compete for breakbulk and project cargo, in particular Handy bulk carriers and container vessels.
Drewry's report suggests that the new International Maritime Organization (IMO) regulation on ballast water management is likely to have a small effect on demolition levels in the multipurpose sector, and even more so for the bulk carrier sector.
Drewry notes that, at the same time any investment in this sector will be in project carriers (with a lift of 100 tonnes or more) producing fleet growth in this segment of almost 3 percent per annum to 2020, whilst the general cargo segment will contract at around 2 percent annually over the same period, leading to overall MPV multipurpose fleet growth of less than 1 percent per year to 2020.
Oatway added: "On the face of it, the supply-demand balance is levelling out, demand is growing faster than supply and the market is improving. As ever, it is the competition for cargoes from bulk carriers and containerships that will keep rates in this section of the market subdued for at least another 12 months. Until rate increases are sustained in the bulk carrier and container ship sectors, there will be little reprieve in their drive to obtain further market share."