The global outlook for the multipurpose and heavy-lift f leet remains extremely uncertain, according to Susan Oatway, senior analyst, multipurpose and breakbulk shipping, at Drewry.This comes as the Drewry Multipurpose Time Charter Index weakened even more over June by 0.6% to $11 050 per day as spot rates in the competing sectors softened.Oatway said going forward it was expected that the weakening trend would continue in July, albeit very slowly, with rates dropping a further 1.4%, to $10 900 per day.“The Index has been falling month to month. In March it fell to $11 170 per day, representing a decrease of 0.2% compared to the previous month.”The Drewry Multipurpose Time Charter Index tracks one-year period charter rates across a basket of vessel types and sizes and forecasts the market movement over the coming month. The vessel types include breakbulk and project cargo ships.Oatway said uncertainty remained the key driver for the outlook for the multipurpose and heavy-lift f leet. Chinese exports were still hampered by Covid restrictions, and European demand remained weak due to increasing economic concerns and inf lation in the US – and coupled with the continuing supply chain issues at the major ports, consumer confidence was receding fast.“At the end of 2021 we were cautiously optimistic, but our expectations now are that 2022 will be weaker than 2021. This has to do with the uncertainty in the global economic market. The new Covid-19 lockdown restrictions the world faced earlier in the year, as well as the ongoing conf lict in Ukraine, are all having a multitude of ripple effects, with the biggest being the change in expectation of the global economy,” she said. “While the invasion of Russia in Ukraine did not have a clear impact on the multipurpose trade, it has had an impact on global confidence, while the rising prices of commodities and competing sectors have caused rates to falter. We currently see little, if any, upside in our base case scenario.”She said global dry cargo demand that had bounced back throughout 2021 was expected to rise slightly during 2022 but would slow again in 2023. “Total dry cargo volumes are made up of bulk cargo, general cargo including breakbulk and project cargo, and containerised cargo. Our outlook is that total dry cargo volumes will see an annual average rate of growth of only 3.8%, which is quite low if one compares this to bulk cargo growth, for example, which was an average of 2.7% between 2013 and 2022.”In addition, the multipurpose vessel (MPV) market had shown some recovery in 2021, but this had more to do with the supply chain crunch in competing sectors than with any significant volume increases. “The MPV sector benefited from the desperate search for space which resulted in previously containerised cargo moving back into breakbulk vessels. That effect is going to weaken in the second half of this year and into 2023.”Oatway said on the MPV charter market, the short-sea sector was becalmed, with rates over much of June steady in the face of rising fuel costs and the continued conf lict in Ukraine.“Add to this the inevitable summer slowdown that this smaller sector faces (as steel mills close for the holidays and harvests are not quite ready) and there is some space in the sector in the short term. For the larger, more heavy-lift capable sector rates have weakened in line with the weakness in the container sector. Rates are expected to remain well ahead of 2021 for some time to come.”
