In the fifth, and final, part of our shipping market outlook series we are focusing on the shipbuilding sector with Maritime Strategies International (MSI) Managing Director Adam Kent. Speaking to the Seatrade Maritime Podcast he says, “We saw the orderbook peak based on our analysis in about June 2022.”
You can listen to the full interview as a podcast in the player above
“So, the orderbook is already coming off, there's more ships being delivered than there are being contracted, and we expect to see contracting over the course of this year, significantly down on 2022 levels.”
Ordering in 2022 was fundamentally driven by the LNG and containership sectors with the bandwagon for boxships continuing longer than expected helping to boost the orders for the year as a whole.
Looking at the outlook for ordering from various sectors Kent says MSI does not expect many more containerships to be ordered in 2023, while there will be a few more LNG newbuilding contracts based on new plants coming onstream. Dry bulk shipping is not looking particularly favourable for 2023 so that will impact ordering, and while the tanker market has been riding-high he notes that has not been catalyst for owners to order huge waves of tonnage.
“We do expect orders if look out to the middle of the decade to start creeping up again, but this year we do expect to see is the sort of low watermark in terms of contracting volumes for the last few years.”
In terms of space availability at yards if an owner does want to place an order in 2023 it very much depends on ship type and whether they are looking to contract from top tier shipbuilder. “If you're looking to order a large containership, or an LNG carrier, or a large tanker, at a top-tier Korean yards, you're not going to find any gaps both this year in 2023, or 2024, you're really going to be looking out to 2025,” Kent says.
However, if you are looking at say a smaller bulk carrier from a second-tier Chinese yard availability is much sooner. In 2022 only 150 yards actually won new orders leaving some 400 yards worldwide with no new orders added last year.
“Those order books are going to be drying up quite quickly if the yard is still in gainful employment. For example, we know that there's a lot of tier two yards in China that specialise in building dry bulk ships that are currently sitting on nothing on their orderbooks are about to deliver their last ship in 2023,” he says. By contrast Nantong Cosco KHI Ship Engineering Co (NACKS) in China is full until 2027.