The multipurpose shipping sector is forecast to recover further in 2018 after starting the year on a confident footing, according to the latest edition of the Multipurpose Forecaster and Annual Review, published by global consultancy Drewry.
With rising demand, contracting vessel supply and lessening threats from competing sectors Drewry says conditions are now ripe for recovery.
Dry cargo demand is growing, with a number of drivers reporting improving conditions, whilst the multipurpose fleet is contracting as older, smaller, less heavy lift capable tonnage is weeded out.
"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."
However, there are still some concerns that could impact the outlook over the medium term. The first of these is the imposition of tariffs on US steel imports but Drewry has concluded that the impact will be limited.
The 45 million tonnes of steel imported into the USA on a yearly basis represents just 8 percent of the global trade, and many countries have now been exempted from tariffs, including the two largest US suppliers, Canada and Mexico.
Drewry also highlights the International Maritime Organization's (IMO) deadline to implement a 0.5 percent sulphur cap on marine fuel from 2020.
There is to be no push back on this deadline, so owners are looking at three costly measures for compliance - install scrubbers, use low-sulphur fuel or switch to LNG fuelled vessels.
Drewry believes that for the older, simpler vessel this could be the impetus needed to send overage vessels for demolition, since almost 10 percent of the fleet is over 30 years old.
The simple multipurpose fleet, that is vessels with lift below 100 tons (90.7 tonnes), has already started to contract at a rate that is affecting the whole fleet. However, Drewry believes that the future is with the project carrier sector - vessels with lift greater than 100 tonnes.
"Some 80 percent of all newbuildings over the last five years have heavy lift capability, and at least 70 percent of the orderbook 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," said Oatway.
