Global dry cargo demand growth, forecast at 5% per annum from 2016 to 2019, is to be offset by falling project cargo volumes over the next twelve to eighteen months, according to Drewry’s latest edition of the Multipurpose Shipping Market Review and Forecaster.
“The fall in oil prices, coupled with growing demand and a diminishing fleet should be good news for the multipurpose shipping sector.
However, it appears that the flipside of lower bunker prices is a global decline in oil and gas investment projects. There have already been reports of fewer project cargoes available for the multipurpose fleet to carry as project investment has started to slow”, comments Susan Oatway, Lead Analyst at Drewry Maritime Research.
With the fall in prices, there is less incentive to invest in oil and gas projects – one of the largest project cargo sectors. This will, in turn, mean a reduction of available cargo and slower demand growth for the fleet.
‘‘Our analysis of the fleet shows that the simple multipurpose fleet is in decline, with little investment beyond replacement tonnage. However the more advanced vessels, the project carriers, are seeing fleet growth of around 3.5% per annum to end 2018. It is the cargo for these vessels that is directly affected by this slowdown in the sector,’’ said Oatway.
The effective demand for the multipurpose fleet is set to rise at an average rate of 5% per annum to 2019. But, there is a caveat to this positive forecast, effective over the next two years. Because of the fall in oil prices and the competition from the container fleet in particular, the growth in demand is expected to be subdued over 2015 and 2016.
“The outlook for the multipurpose sector will be largely determined by developments within the container and bulk markets and how far they will encroach on general, breakbulk and project cargo. As usual, the effect of lower oil prices has delayed the project market, but we expect 2015 to be a slow year as the sector readjusts to the idea that oil is no longer priced at $100 per barrel”, added Oatway.