Growth in renewable energy generation around the world and a construction increase in South East Asia that is expected to run for the next 10 years is a good sign for the once problematic multipurpose shipping fleet.
According to Drewry’s Multipurpose Shipping Forecaster, Drewry reports that it remains cautiously optimistic regarding the outlook for the sector. The multipurpose and heavylift fleet is expected to contract at less than 1% per year, while the trade war looms over the horizon and the competing sectors are not yet secure.
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However, multipurpose vessels benefit from the growth in demand for both breakbulk and project cargo, which has seen some renewal in certain sectors.
Wind energy provided more than half of that renewables growth, this can benefit the multipurpose (MPV) sector. The equipment needed for a wind farm, suits the MPV fleet. The equipment needs a vessel that can lift and stow it correctly.
The other significant factor is a constriction boom for South East Asia that is expected to last ten years. This is driven by China’s One Belt One Road (OBOR) initiative, which will link China to Europe through Central and South-East Asia. What is more, India’s annual construction investment is also expected to increase by about a third over the next five years.
The outlook for the competing sectors, although mixed going into the final quarter of the year, remains positive for the medium term.
The impact of US tariffs is felt by the container shipping lines, but Drewry expects growth forecast at a slightly weaker rate.
In the long term, owners are more positive after 2020, when the true picture of the various environmental regulations will have become clearer. This made Drewry wonder if it should upgrade its forecast to reasonably optimistic.
