THE global multipurpose shipping fleet is set to gain more market share and see freight rates recover by 2018 amid improved demand coupled with better market conditions in competing segments, according to Drewry.

It keeps its longer-term outlook for the multipurpose and heavylift sector positive, despite Chinese authorities’ plans to rein back steel production as they try to reduce air pollution in cities and cut steep exports in the immediate term.

A report from the consultancy says that although the clean-up campaign has led to a reduction of about 50m tonnes of steel production from the four quarters of 2017, Drewry thinks Chinese exports will turn less attractive to Southeast Asian clients over the Middle East and Turkey, and thus trade volumes will shift accordingly.

It adds that there are indications of more robust demand in competing sectors, with freight rate forecasts of both the container and handybulk carrier markets seeing an uptrend over 2017 and 2018.

“This has already led one container line to announce that it is less interested in project cargo than previously, due to the extra time needed to stow this type of cargo.”

Drewry notes that even though there is substantial older tonnage in the multipurpose fleet, most of the newbuildings delivered over the past five years are heavylift capable, which means the modern fleet of project carriers is ready to capitalise on any upturn in the sector.

Susan Oatway, lead analyst for multipurpose shipping at Drewry, says: “The improvements in many other key drivers for this market mean we remain optimistic about its future. The expectations for global [gross domestic product], coupled with those for global [purchasing managers indexes] and the rising oil price, are likely to lead to improved investment and therefore increased demand for breakbulk and project cargo.”