Shipbuilding outlook for 2024 – newbuild orders expected to slow

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, “China is now dominating the global newbuilding order book for container ships, car carriers, and even bulkers and tankers.”

You can listen to the full interview as a podcast in the player above

Newbuilding demand remained robust in 2023 and for the first nine months of the year with around 66 million gt booked at global shipyards. While the level was marginally down on 2022 at 9% lower Kent notes ordering was still very high, primarily driven by the container ship market, especially in the first part of the year, as well as gas carriers and car carriers.

China is the dominant force

MSI estimates that there are 102 million gt of ships on order at Chinese yards with Korean yards a “distant second”.

“But the difference with the Korean order book is it's over half that Korean order book is being made up of gas carriers with a huge number of the LNG orders that we've seen over the course of the last three years, ultimately ending up in Korea. Although the Chinese yards are starting to build more of gas carriers, it certainly remains the preserve of the Korean shipbuilding market,” he explains.

Japanese yards remain a factor in the global picture but with only around 20% of the orderbook a currently seen at Chinese yards.

Newbuild order outlook

MSI expects the number of new orders in 2024 to come off the level seen in recent years.

“here's a lot of tonnage on the order book, so, we expect to see certainly fewer container ships being ordered. I think we anticipate as being towards the back end of the current ordering binge for the LNG sector. So, we're not expecting those volumes to be the same in 2024, as we've seen in 2022, and 2023,” he says.

Looking at the dry bulk and tanker sector demand Kent explains: “We're still seeing a lot of market participants in dry bulk and the tankers sector sit on the fence, and wait to see what happens with new technologies and with new green fuels before launching in and ordering new tonnage.”

Shipyard slot availability

In terms of placing new orders MSI says that owners looking to place contracts at tier one yards in China, Korea, or Japan would probably get an earliest delivery date in 2027.

If an owner is looking at ordering a standard design Capesize bulker, for example, Kent says that there is some availability still at second tier Chinese yards with a 2026 delivery.