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The last three months have been some of the worst the multipurpose and project carrier sector has endured as the breakbulk and project cargo sector remained weak, with little suggestion that volumes will improve significantly until the end of 2017, according to shipping consultancy Drewry.

Rates have continued to slide to barely cover operating expenses, as the competing sectors of container ships and bulk carriers have weakened the MPV market ever further in their search for market share.

“The container lines lost billions of dollars as they filled slots no matter what, whilst the Handy bulk carriers struggled with the Baltic Dry Index (BDI) reaching record lows of below 300 index points on the back of continued oversupply and weak demand,” Drewry said.

“We are more pessimistic about the near term outlook than we were 6 months ago but we can see recovery for this sector, albeit some way off. It is not our view that there will be a run of (or even any more) big carrier bankruptcies in the near term, however, those who hold the purse strings might well be inclined to restrict finance to some of the smaller owners,” Susan Oatway, lead analyst for multipurpose shipping at Drewry, said.

Whilst there has been a brief upturn in container rates, it is likely to be short lived and not significant enough to take the lines away from the breakbulk sector. However, the BDI is on the turn and moved back over 1000 points at the end of August.

Drewry said that it does see an upturn in dry cargo trade over the forecast period and dry bulk trade in particular.

Although over 2015 to 2020 the MPV market share is expected to decrease by around 1% per year, it is forecast to reach a floor in 2017 and return to positive growth thereafter.

“While our optimism for the sector remains muted, there are some pockets of growth. With oil prices forecast to rise back above USD 55 per barrel next year the project sector is expected to see some renewed interest. There is also some potential spend in the Middle East and Africa. And there has been renewed interest in renewables, particularly wind in the US. The main problem remains the competing sectors, particularly container shipping where aggressive pricing is drawing cargo away from MPV ships,” Oatway said.