Drewry: No Significant Recovery for Multipurpose Shipping before 2018

Image Courtesy: AAL Shipping

Rates in the multipurpose shipping sector seem to have bottomed out as signs of market recovery emerge after ten years, with momentum expected to build over the next few years, Drewry’s latest Multipurpose Shipping Market Annual Review and Forecast 2017 says.

Dry cargo demand is forecast to grow by around 3% in 2018, but within that figure it is the market share available to multipurpose vessels which is more interesting. Drewry estimates that the multipurpose (MPV) share of bulk trades in the peak year of 2007 was about 17%, while the share of general cargo trades was nearer 20%.

“Over the intervening period, both these shares have eroded and we estimate the bulk cargo share for 2016 to be nearer 14% and 12% for general cargo. However, Drewry believes that this is the bottom of this particular cycle and that the MPV market share in both areas should improve, albeit marginally, over the next five years,” Drewry added.

Although MPV demand fell slightly over 2016 compared to 2015, it is expected to grow at an average annual rate of 3.4% to 2021.

On the other side of the equation vessel supply is expected to contract over the same period, albeit by only 0.1%.

Over the last five years the percentage of project carriers being delivered to the fleet has risen to an average 58%. However, in 2016 a staggering 93% of all newbuildings had heavylift capability, sounding a death knell for the simple MPV fleet.

With about 63% of the orderbook declaring heavylift capability, the future decline of the simple MPV section of the fleet is almost assured. There is very little, if any, new investment in this sector with those new orders without lift capacity seen as simple replacements for an aging fleet. According to Drewry, owners are taking significant decisions to build higher specification vessels with bigger lift capacity, in order to give them an advantage in the appalling market.

“Drewry expects to see a decline of almost 4% in the ‘simple’ MPV fleet to 2018, balanced against growth of 4% 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. For the larger sectors, which have a bigger correlation to Handysize rates, there could be a more significant uptick in 2017 before rates settle over 2018,” added Oatway.

Share this article

Follow World Maritime News

In Depth>

Events>

<< Jun 2017 >>
MTWTFSS
29 30 31 1 2 3 4
5 6 7 8 9 10 11
12 13 14 15 16 17 18
19 20 21 22 23 24 25
26 27 28 29 30 1 2

DSM17

Donsö Shipping Meet 2017 is an all inclusive exhibition. Meals, electricity, meeting schedule and banquette dinner is included…

read more >

TOC Europe

TOC (The Terminal Operations Conference) has long been considered best in class by container terminal operators and their suppliers…

read more >

Marine Philippines 2017

The 4th edition of PHILIPPINES MARINE 2017, SHIPBUILD PHILIPPINES 2017 and OFFSHORE PHILIPPINES 2017 is the only specialized Shipbuilding…

read more >

Bunkering Week 2017

IBC’s biennial Bunkering Week is back with its successful series of 3 co-located events: 8th Bunkering in Asia, 4th LNG Bunkering and EMTECH: Ship Emissions Technology Conference.

With a proven track record of bringing together top decision makers from various industry sectors, this remains the go to event for ship owners, fuel suppliers, traders and technology solution providers. Get in-depth and detailed market insights from experts who are taking the decisions, assess peer strategies and give shape to your own in this unrivalled gathering of shipping and marine fuel industry leaders.

Key Highlights for 2017:

* 3 Co-located Conferences

* 12+ Hours of Networking Time

* In-depth Review of Shipping Markets by Segment

* Ship Owner Positions on Emissions Compliance Scenarios

* Pricing Differentials and Availability across Different Fuels

* Technology and Analytics in Fuel Management and Emissions MRV

More info

read more >