LONDON: April 04, 2018. Shipping consultancy Drewry says multipurpose ocean shipping is forecast to recover over the next five years due to rising demand, more disposals and less competition.

“This year has started with renewed optimism and it is Drewry’s belief that the market has finally turned that corner,” said Drewry’s lead analyst for the multipurpose sector Susan Oatway. “Rate rises are never stratospheric in this sector, but we believe a steady growth of around 2-3 percent per year is possible over the forecast period.”

A new report by Drewry on the  breakbulk and project cargo sectors says conditions are now ripe for recovery as demand for dry cargo capacity increases and older, smaller, less heavylift-capable tonnage is scrapped.

Despite the imposition of tariffs by Donald Trump on US steel imports - particularly from China - Oatway said the exclusion of its two biggest suppliers, Mexico and Canada, suggests the annual 45 million tonnes of U.S. steel imports represents just 8.0 percent of the global trade and therefore unlikely to impact the supply side.

Acknowledging the International Maritime Organization’s 0.5 percent sulphur cap on marine fuel from 2020, the Drewry report says owners are looking at three costly compliance measures: installing scrubbers, using expensive low-sulphur fuel or a switch to LNG-fuelled vessels.

With nearly 10 percent of the global fleet over 30 years old, Drewry suggests the IMO compliance will prompt owners to scrap vessels with lift under 100 tons and focus on the project cargo sector.

“Some 80 percent of all newbuildings over the last five years have heavylift capability, and at least 70 percent of the order book has this capability. The project carrier fleet is growing, but it will be some time before it reverses the decline in the overall multipurpose fleet,” added Oatway.