There seems to be a consensus that 2023 was a good year for project cargo and the multipurpose vessel (MPP) sector. However, in its report, the Hamburg-based shipbroker Toepfer Transport, noted that the sector did remain below expectations. 

The delay of various projects and the non-appearance of the well-expected surge in demand for cargo space from the wind power sector, as well as, the low activity in the minor bulk markets have blurred the results, according to Toepfer Transport’s analysts.

“The economic environment for energy and infrastructure projects is becoming more and more difficult. With interest rates now being above the inflation rates, the economic viability of many large projects may turn questionable. This may have a direct impact on the future demand for MPP tonnage. There are high political targets for the renewables sector in many countries. Whether these targets can be met, highly depends on the economics of the single project as well as the ability of the supply chain to deliver,” the report reads.

Teopfer Transport’s analysts expect the positive outlook and the increasing activity from the oil and gas sector to help mitigate the effects of uncertainties and probable delays from the renewables sector but it is unclear whether this will stabilise the freight rates. The TMI-P (projection for the next six and 12 months) indicates that the outlook for the market is more positive than it was in the past months.

Ordering activity

The increase of newbuilding ordering activity and the time charter rates agreed for these newly ordered ships
indicate quite some positive sentiment in the long term. The plain tonnage providers (non-operators) follow
different strategies with some fixing at an early stage and others waiting for a further upside in the TC rates to
come, the analysts say.

“Some carriers are still actively chasing for newbuilding slots, with a few already at a fairly advanced stage, but
so far only one effective order can be reported,” the report reads.

The fourth quarter of 2023 was the most active with regard to the second-hand market. The majority of sellers
are carriers or, at least, very closely related to carriers. The slower pace of the demand on the cargo side and
the relatively high second-hand prices may be an incentive to sell ships, especially for those owners which will
receive replacement vessels by means of newbuilding deliveries in the near future, Toepfer Transport’s analysts say.