The demand outlook for the multipurpose vessel (MPV) fleet has not improved since the first quarter of 2016 and is set to remain unchanged until the end of 2017 due to persisting weakness in breakbulk and project cargo sectors, according to the latest Multipurpose Shipping Market Review and Forecaster report issued by shipping consultancy Drewry.
On the other hand, the supply of MPVs is under control, with an orderbook equivalent to just five percent of the operating fleet and growth estimated at less than a half percent per year between now and 2020.
However, the oversupply of the competing fleets continues to erode the market share available to the multipurpose sector and in turn any positive growth, Drewry said.
The improvement in this sector is under way but it is still some way off – and that is being optimistic.
The multipurpose shipping community can do little to improve the demand for these vessels, at a time when projects are being cancelled and steel production halted, but there is something to be done on the supply side, the consultancy said.
“While it is true that most of the damage is being done by the oversupply of bulk and container vessels, there is still a view in the market that the problem is not ‘ours’,” according to Drewry.
There are over 600 vessels trading that are over 25 years old, which is 20 percent of the operating fleet in number terms – 13 percent in dwt terms as the majority are less than 10,000 dwt.
Although these vessels only compete in the breakbulk trades, that is where the cargo is at the moment, and so, they compete across the majority of the fleet.
“This competition will impact rates across the sector as high spec project carriers will need to carry any cargo to fulfil their investors’ requirements,” Susan Oatway, lead analyst for multipurpose shipping, commented.