The pressure on multipurpose markets has culminated in the end of the 18-month bull run.
Charter rates are falling as operators are holding back from taking vessels on longer charters due to growing uncertainty over the future.
That is reflected in the decline of the Toepfer Multipurpose Index (TMI) to $22,954 per day for August.
Operators are still fixing at high levels, but pressure on the sector has resulted in shorter time-charters amid economic and political uncertainty.
"Most operators are hesitant to commit to these still high rates for a longer period,” shipbroker Toepfer Transport noted in a quarterly review of the sector.
This month’s TMI, which assesses six-to-12 month rates for a 12,500 dwt MPP/heavylift 'F-Type' vessel, is down from $23,099 in July.
That comes after rates climbed more than 105% over the year from $11,225 in July 2021.
Optimistic outlook
Projections are for MPP charter rates to decrease by around 10% over the next 12 months.
That would still be around double the 10-year average for rates, Toepfer noted.
MPP owners have benefitted from the spillover of cargoes from booming container shipping sector, where markets have also cooled.
But demand for multipurpose, project and heavy-lift cargoes remains strong and availability of tonnage remains tight.
That is reflected in a shortage of available tonnage which is pushing secondhand prices higher.
Recent sales include the 12,605-dwt Thorco Angela (built 2007) reported sold by Germany’s Auerbach Schifffahrt to Mastermind Shipmanagement of Cyprus for $11.5m.
Naples-based Manisa Bulk picked up the 12,500-dwt Xin Hai Xiang (built 2011) for $9.5m.
These follow the sales of 12,580-dwt Brattingsborg (built 2010), Billesbord and Ellensborg (both built 2011) from Denmark’s Weco Projects.
German owner Foroohari (BF Shipmanagement), which acquired the vessels in April for a reported $18m each, has since chartered out the ships to German operator dship Carriers.
'Window of opportunity'
Toepfer expects that future demand for ships capable of carrying heavy and oversized project cargo to grow.
The sector is likely to benefit from the acceleration of on-and offshore wind installations, energy infrastructure and new oil and gas or LNG projects.
But high inflation, rising interest rates and the increasing costs of labour and equipment clearly indicate a continued rise in newbuilding prices.
“The window of opportunity to order prior to further price increases and with reasonable delivery times is small," the shipbroker noted.
"Decisions should be made sooner rather than later,” it added.
Going forward there will be a limited number of vessels with a lifting capacity of 100 tons and over, the shipbroker noted.
It added that two-thirds of the MPP fleet is expected to have an age in excess of 15 years in four years’ time.
