With a current orderbook of 63 vessels, there is little appetite for investment from the multipurpose shipping sector – a trend that has been ongoing for some time and is unlikely to change in the near future.
Of the 63 multipurpose ships on order, 35 are heavy lift capable, according to maritime consultancy Drewry. On the demolition side, Drewry said that there has been a “steady stream” of vessels heading to the beaches, albeit a thin stream. Those ships earmarked for demolition tend to be the simpler multipurpose units, but there was a brief surge in heavy lift tonnage being scrapped, although it should be noted that this was principally old Rickmers vessels.
Susan Oatway, lead analyst for multipurpose shipping at Drewry, explained that this culminates in a stagnating fleet. Overall, the multipurpose fleet is expected to retract in the next two years; there will be some growth in tonnage capable of handling super-heavy loads.
Given the environment that the multipurpose shipping sector is trading in, it is not surprising that large-scale investment has been limited. In Drewry’s June report on the multipurpose sector, the analyst “could see no upside potential at all”. Its three scenarios included “a base case, worse case and an even more worse case,” Oatway commented.
In its June forecast, Drewry said that charter rates for multipurpose ships, including breakbulk and heavy lift vessels, are unlikely to recover back to pre-Covid-19 levels until the end of 2021, as HLPFI reported here.
Now, however, there are some positive indicators.
In all its scenarios, Drewry expects trade to bounce back in 2021. However, in the worst case, a second wave of lockdowns continues to have increasing affects on risk aversion and as such the subsequent recovery is sluggish. Growth in 2021 under this scenario is subdued.
Oatway said that she is more confident about the base case playing out. This forecast outlines that the second wave, which has already arrived in Europe, comes at a time when a recovery has already started in economies. Governments under this scenario are more focused on protecting that economic activity and as such the V-shape recovery in 2021 is firmer and more settled.