March 29 - Following another poor year for multipurpose shipping with further erosion of rates making it the worst market in over 10 years, signs of recovery are now evident with momentum expected to build over the next few years, according to global ship
According to Drewry's latest Multipurpose Shipping Market Annual Review and Forecast 2017, dry cargo demand is forecast to grow by around 3 percent in 2018, and the multipurpose (MPV) share of bulk trades, and general cargo, should improve, albeit marginally, over the next five years.
Although MPV demand fell slightly over 2016 compared to 2015, it is expected to grow at an average annual rate of 3.4 percent until 2021.
The report also stated that vessel supply is expected to contract over the same period by 0.1 percent. However, for both newbuilding orders and demolition activity there is a big difference between simple MPV and project carriers. Over the last five years the percentage of project carriers being delivered to the fleet has risen to an average 58 percent.
According to Drewry, in 2016 a staggering 93 percent of all newbuildings had heavylift capability.
The future decline of the simple MPV section of the fleet is almost assured, claims Drewry. There is very little, if any, new investment in this sector with those new orders without lift capacity seen as simple replacements for an ageing fleet. Owners are taking significant decisions to build higher specification vessels with bigger lift capacity, in order to give them an advantage in the market.
"Drewry expects to see a decline of almost 4 percent in the 'simple' MPV fleet to 2018, balanced against growth of 4 percent in the project carrier fleet," comments Susan Oatway, lead analyst for multipurpose shipping at Drewry.
"Add these two together and you get an improving supply and demand balance. We expect to see only a slight improvement in the market over 2017 with rate rises gathering momentum after 2018," Oatway added.