b'MPP sector in seasonal slowdown but will it bounceback in the fall?MPP SECTOR IN SEASONAL SLOWDOWNBUT WILL IT BOUNCE BACK IN THE FALL?The multipurpose fleet with the breakbulk sector has had a good run and a seasonal slowdown might be just that. But with COVID impacts and a multitude of other disruptive factors, nothing is a given now. By George Lauriat, AJOTJul 25, 2022 | Published originally in AJOT Issue #743T he breakbulk sector of the dry bulk shipping market hasparticular interest in multipurpose vesselsgenerally smaller entered the seasonal summer of doldrums. Of course, anysized vessels. The TMI is a barometer of MPP charter rates for reference to seasonal or annual in the shipping markets mustthe sector but also a guide to the breakbulk sector in general.be said with post-COVID caution. It takes only a short look backThe monthly index from July of 2017 until March of 2021, to last year to understand the prudence in ascribing normality toranged between $6,265 and 7,520 with a high of $7,578 in decidedly abnormal circumstancespost COVID rebound andNovember of 2019. But there was a steep climb in the TMI China lockdowns and slowing economy, inflation, recessionaryfrom January 2021 until January of 2022, when a slight leveling trends in many economies, Russia-Ukraine war and impact onoff began. Over that time the TMI went from $7005 to an global markets, etc.astounding $21,863. In the recently released July 2022 TMI the The Breakbulk sector, of the Dry Bulk shipping fleet isrates were $23,099 compared to $11,225 back in July of 2021. normally considered to be self-sustaining (sometimes calledTophers market commentary for their July release suggests multipurpose ships or MPPs) meaning onboard cranes toa seasonal slowdown: Along with rising temperatures, the handle cargo, vessels in the smaller sizes loosely slotted intoholiday mood is increasingly spreading, making people leave for the Handysize (up to 40,000 dwt) or Handymax (up to 60,000summer vacation and have business activities decelerate. We dwt) largely for the purposes of establishing freight rates andare back to a more ordinary seasonal slowdown scenario in the other baseline shipping data. Within these loose parametersshort sea sector with TCEs only marginally sliding on the back there are many individual ship classes, often dedicated toof lower but still stable demand. Vessel earnings keep a solid specialized handling of oversized cargos like wind blades orlevel of more than 50% above those achieved 12 months ago.mining equipment. However, these ship haul everything that canAnd for the MPP sector that might be so. Historically, the be placed in a ships hold and thus compete with other sectorssector has been slow to add new tonnage and only recently such as ro/ro and even in some circumstances containerized with therise in charter rateshas renewed interest and shipping. For those reasons, size and markets, the rate structuremoney poured into the sector. New MPP vessels are being of breakbulk shipping has been fairly modest.built and are often a little larger, hitting 28,000 dwt-30,000 dwt, Summer Solstice for Breakbulk? affording more opportunities outside of strictly project moves. Price wise, like with other vessels, the cost of newbuildings has Take for example, Toephers MultiPurpose Index or TMI.gone up and in a sense, shipowners buying ships, have already Toepher Transport is a Hamburg-based shipbroker primarilyexperienced inflation. While it is expected there might be some engaged in S&P (Sale and Purchase) and newbuildings withfall in shipbuilding prices, COVID, steel and other factors (there 6'