Multipurpose shipping has got off to a positive start this year thanks to increased demand and less competition. According to Susan Oatway, lead analyst for multipurpose shipping at Drewry Shipping Consultants, the tide started to change midway through 2017 after what has arguably been the longest downturn experienced in decades – and this led to an outlook of cautious optimism. But, with projects starting to take off again, particularly in Africa, the Middle East and Asia, she said the outlook was now optimistic. “We see a definite positive upturn in 2018 and 2019,” said Oatway. This as a result of the improved supply-demand balance as well as reduced competition from container and dry-bulk ships which were, due to flat rates in their own sectors, aggressively competing for breakbulk cargoes. She said the improving global economy was further contributing to the situation and expectations were that breakbulk rates would start to rise within the next few months. According to Oatway, this will encourage container ship and bulk carrier operators to focus on their primary markets as opposed to competing in the multipurpose shipping sector where rates have been depressed due to the oversupply of vessels. Commenting on what was driving the improved outlook, Oatway said the slow rise of the oil price had played a major role. “While we are not quite yet at $60 per barrel, it is recovering which is good news for this sector,” she said. The lacklustre oil price over the past few years has slowed project cargo growth significantly. “We have been encouraged by the announcement of projects in Africa and the Middle East and not just in the oil and gas sector. There is also movement in the mining and construction sectors.” Oatway said power projects were also taking off again – especially in the renewable sector with a real resurgence of wind and solar power. “There has been a definite increase in the number of projects,” she said. “Of course, it takes a number of years before projects result in actual cargo on ships. We are not saying that we are going to see these higher volumes immediately but we are going to see a rise in multipurpose cargo volumes going forward.” According to Oatway, while demand growth dropped by a half percent in 2017 it was expected to grow by 2% in 2018. Drewry estimates that overall dry bulk demand will rise by 1.4% in 2019.
