Fresh research by shipping consultant Drewry and latest commodity market trends have raised hopes that the embattled multipurpose shipping market[ds_preview] is finally moving out of the doldrums. Both transportation demand from project and breakbulk shippers and market conditions in competing sectors are showing signs of improvement, Drewry points out in its latest MPP market outlook and forecaster. »The expectations for global GDP, coupled with those for global PMI [purchasing manager indices] and the rising oil price, are likely to lead to improved investment and therefore increased demand for breakbulk and project cargo,« commented the firm’s lead analyst for multipurpose shipping, Susan Oatway. Hence the share of multipurpose vessels against bulk carriers and container vessels in the overall dry and general cargo mix is expected to rise next year, from this year’s circa 1 billion tons. Improvements in the utilisation of the mpp fleet will be assisted by a likely retreat from breakbulk and project cargoes by container lines and bulk carriers. Both these are expected to focus more on their core cargo types as fleet overcapacity in their sectors eases, Drewry explains. Freight rates for both container lines and handysize bulk carriers are forecast to continue firming into 2018.
Drewry’s new forecast follows the release of an improved shortrange outlook for the global steel industry whose products constitute important volume cargoes for multipurpose project carriers on various trade routes. The World Steel Association said last week that global steel demand is now projected to grow by 2.8% this year and by 1.6% in 2018. Its previous shortrange outlook released back in spring showed only 1.3% and 0.9% expected steel demand growth for 2017 and 2018. The markup was prompted by increased demand in China related to infrastructure spending as well as in the US, Europe and Japan, the World Steel Association said.
Rising US oil production with its needs for equipment and material, much of it shipped in from suppliers in Europe, South America and Asia, is another positive for multipurpose shipping. The latest count of active drilling rigs in the US by consultancy Baker Hughes showed a circa 40% rise year-on-year to 928 units as per 13 October.