WHILE the container shipping sector is expected to continue to struggle through 2017, the dry cargo market will see moderate growth of about two percent per year through 2020, maritime consultants Drewry said in a new report.
Drewry explained that its research showed an increase in ship demolition levels for multipurpose and competing sectors, with a corresponding decrease in new building orders, which will result in minimal aggregate multipurpose fleet growth over the next three years.
Along with some improvement in the global market in terms of commodity prices and demand for raw materials, the almost-nil growth of capacity will improve shipping rates, Drewry said.
Susan Oatway, lead analyst for multipurpose shipping at Drewry, said, “Slow growth in supply, alongside better growth in demand, is expected to help multipurpose charter rates in 2017 and beyond, supported by a recovery in the dry bulk market, albeit a slow one. In particular, the oversupply situation, which has dogged this sector for many years, is expected to level out in the medium term.”
Oatway added, “On the face of it, the supply-demand balance is leveling out, demand is growing faster than supply and the market is improving. As ever, it is the competition for cargoes from bulk carriers and containerships that will keep rates in this section of the market subdued for at least another 12 months.
“Until rate increases are sustained in the bulk carrier and container ship sectors, there will be little reprieve in their drive to obtain further market share.”