Overall contracting of new vessels in 2015 dropped by 40% to 1,306 units from 2,162 in 2014, with estimated newbuild investment falling from USD 113bn to USD 69bn, according to Clarksons Research.
Investors abstained from newbuild opportunities due to tough market, and the overall newbuilding price index fell by 5% over the year.
The number of tanker orders increased by 14% to 424 and containership ordering rose to 224 units, but these positives were outweighed by the rapid slowdown in orders in the most challenged sectors. Namely, orders for ship-shaped offshore units fell by 73% to just 127 last year and bulkcarrier ordering, dropped by 68% to 250.
Korean builders maintained their volume of orders in dwt terms with 32.5m dwt booked, backed by significant tanker ordering and the tail of the surge in ‘mega’ boxship orders, and Japanese yards even expanded their order intake by 3% to 28.9m dwt.
The drop in order volume was felt the hardest in China, where yards saw a 46% fall to 29.2m dwt, as the demand for new bulkers evaporated, Clarksons said.
The drop in ordering left the orderbook down by 7% on its start year level at the end of 2015. But output from the world’s shipbuilders increased last year for the first time since 2011.
Deliveries were up by 6% to 96.2m dwt, with output edging up in the major volume sectors, as many of the units ordered back around 2013 were completed. However ‘non-delivery’ of the start year orderbook schedule also increased (to 35% in dwt terms), with a ‘brakes on’ approach from many owners with units scheduled to enter the fleet.
“Few of these trends could be construed as good news for the world’s shipbuilders, many beleaguered by financial problems. Yet the brakes haven’t really been put on hard enough to help market conditions,” Clarksons added.
Overall demolition did increase by 15% to 38.6m dwt, but scrap prices have remained depressed due to a surplus of Chinese steel around the world. World fleet capacity growth slowed marginally to 3.3% in 2015, with European owners holding their own, and the number of units changing hands on the S&P market (1,334) remaining steady. However, with seaborne trade growth of 2.0% this wasn’t enough to stem surplus capacity in the markets in general.
With respect to the outlook for this year, things still look tricky as tough market conditions continue, Clarksons believes. Builders are facing thin demand for new units and the trend could continue.
“Niche requirements and the need to replace older tonnage with new, more ‘eco-friendly’ units in some parts of the fleet might help, but like so many in the industry, the world’s shipbuilders find themselves hoping that somebody, somewhere finds the accelerator,” Clarksons concludes.