The multipurpose shipping market is expected to see the first signs of recovery by the end of 2017, following in the steps of the dry bulk and container shipping markets, according to shipping consultancy Drewry.
Dry cargo demand is weak but strengthening with multipurpose shipping market share expected to grow at just under 2% per year to 2020. Demolition levels are up in both the multipurpose and competing sectors, while newbuilding ordering has waned, which will result in minimal aggregate multipurpose fleet growth to 2020, Drewry said.
“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,” Susan Oatway, lead analyst for multipurpose shipping at Drewry, said.
The new International Maritime Organisation (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. At the same time any investment in this sector will be in project carriers producing fleet growth in this segment of almost 3% pa to 2020, whilst the general cargo segment will contract at around 2% pa over the same period, leading to overall MPV fleet growth of less than 1% pa to 2020.
“On the face of it, the supply-demand balance is levelling out, demand is growing faster than supply and the market is improving,” Oatway said, adding that 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.”