Recovering demand for multipurpose shipping combined with improved market conditions for competing sectors will result in rising market share for the multipurpose shipping fleet and a recovery in freight rates in 2018, according to the latest Multipurpose Shipping Market Review and Forecaster report published by global shipping consultancy Drewry.
Drewry has projected that steel exports will slow over the short term due to China’s plan to curb steel production — an attempt to clean-up the air pollution blighting its cities, but its longer-term outlook is still positive for the multipurpose and heavy lift sector.
The clean-up campaign has resulted in a decision to cut some 50 million tons of steel production from the fourth quarter of 2017.
Drewry expects that Chinese exports will become less competitive for their South East Asian customers, compared to the Middle East or Turkey, and that trade volumes will shift accordingly.
There are also signs that the longer-term health of the competing sectors is improving.
Neil Davidson, Senior Analyst (Ports & Terminals) with Drewry Maritime Research, has written a new technical paper 'The Challenge of Fragmented Container Port Capacity' in which he offers fresh, pioneering insight into how to achieve optimal terminal efficiency via the analysis of terminal fragmentation
Freight rate forecasts for both the container and handybulk carrier sector are showing upward movement in 2017 and 2018, causing container shipping lines to lose interest in project cargo due to the extra time needed to stow this type of cargo.
Drewry has reported that although there is still a significant level of overage tonnage in the multipurpose fleet, most of newbuilding deliveries over the last five years have been heavylift capable, meaning that a modern fleet of project carriers are “well placed” to take advantage of an upturn in the sector.
Susan Oatway, Lead Analyst for Multipurpose Shipping at Drewry, said: “The improvements in many other key drivers for this market mean we remain optimistic about its future.
“The expectations for global GDP, coupled with those for global PMI and the rising oil price, are likely to lead to improved investment and therefore increased demand for breakbulk and project cargo.”