June 8 - In a webinar yesterday, Drewry analyst Susan Oatway suggested that the current overcapacity in the multipurpose shipping market can only be improved in the short term if operators of bulk carriers start scrapping some of their older ships.
Competition from the bulk, container and ro-ro sectors is an ongoing problem for the operators of multipurpose project vessels and Drewry has previously said that real recovery in the latter is highly dependent on improvements in the former markets.
Oatway noted that the shipping industry cannot do anything about the demand, but shipowners do have the ability to influence supply - "so either demolish the ships, consolidate fleets, or make sure that the only ships that are built have demand tied in."
She added that in the bulk trades, there are still a large number of ships that are over 25 years old and prime candidates for demolition, and in the general cargo side of the multipurpose fleet, the average age is around 17 years.
With regards to competition from the container sector, Oatway suggested that when conditions improve in that market - and Drewry predicts they will - the focus of the container lines will return to their core business, which gives them less trouble than project cargo shipments. However, she noted that competition will always be there from bulk carriers and ro-ro ships.
When asked if now is the right time to invest in multipurpose ships, Oatway stated: "Not newbuilds! But there are some real bargains out there", with a number of modern vessels available at relatively low prices. She described a 15,000 dwt ship with a 100-tonne lift capacity as a "perfect" buy for anyone with the wherewithal to weather the current state of the market for the next 18 months.
Commenting on the idea that the sector needs its own index, like the Baltic Dry Index, to help all sides evaluate the market better, Oatway confirmed that Drewry has been looking into whether it is possible to create one. HLPFI wonders if a sector as opaque as the multipurpose shipping market would ever be willing to submit figures on time-charter hire rates, which would be needed to create such an index.