Demand for project carriers is on the increase as volumes improve and competition softens, according to Susan Oatway, senior analyst for multipurpose and breakbulk shipping at Drewry.
“The project carrier fleet has grown almost 2% per year for the period 2017 to 2019 while the smaller, simpler multipurpose vessel fleet will contract by 2.8% over that period.”
She said most of the vessels currently being demolished were the simpler, smaller vessels with a deadweight of less than 10 000 tonnes.
“Demolitions have been at historically low levels for the past few years and so far in 2018 only 165 000 deadweight has been sent for recycling. Just over half of those were the smaller vessels in the sector. On the other hand, there have only been six vessels delivered this year and only two new orders placed, but 67% of these have heavy lift capability and are in the project carrier sector.”
She said over 80% of all newbuilds in 2017 were classed as project carriers. Increased volumes were supporting this growth. Oatway said despite the multipurpose share of dry cargo volumes decreasing in 2017 expectations were that improved volumes would see a significant shift in the market that would see demand increase.
“We estimate that dry cargo volumes over 2018 will grow 2% compared to 2017,” she said. This would see many of the competitors in the multipurpose sector – including container lines – return to their traditional business,” she said. “We consider general cargo to be what is left when the specialised ships have taken their share. Drewry expects containerised cargo to grow strongly in the medium term mainly as a result of the continued containerisation of breakbulk cargoes.”
She said this would further move container lines back to traditional and higher-paying cargoes.
“We don’t see a significant rise in absolute non-containerised general cargo volumes for the short term.” The multipurpose sector share of general project breakbulk cargo has dropped to about 15% in the past few years compared to a high of 20% pre-2010. The current multipurpose share of dry bulk cargo is about 17%.
“We expect to see some stability over the medium term – along with a suspension of that erosion of market share. The multipurpose share of the dry cargo market is going to rise by a few points going forward which will equate to about 1.4 billion tonnes of cargo per year.”
She said while the total MP fleet – heavy lift and non-heavy lift capable – would contract by 1% in 2018 and another 0.5% in 2019 following trends set in 2017, demand growth would increase with the project carrier fleet growing by at least 2% per year.
