The shipbuilding industry is experiencing an upsurge in orders in the first months of 2021 driven by market demand especially in container transport. A new analysis from the BIMCO business group reports that orders for new container ships have doubled so far in 2021, almost reaching the total tonnage ordered for the whole of 2021. Orders for new VLCCs are also overtaking the market as the dry bulk is lagging behind.
“The huge sums of money invested in container shipping are ending up in shipyards, with the current supply of ships prompting some owners to expand their fleets,” said Peter Sand, chief marine transportation analyst at BIMCO. “While they are also making a lot of money in the current market, dry bulk owners have been more reluctant to order new tonnages as the used market has proven to be more popular. ”
Total orders for the three largest segments of commercial shipping, container ships, tankers and dry bulk, increased by almost 120% in the first five months of 2021 compared to 2020, when shipowners were reluctant to place orders at the start of the pandemic.
So far in 2021, BIMCO reports that orders totaling 43.6 million dwt have been placed at shipyards. This compares to 19.8 million in the first five months of 2020. In 2020, 49 million dwt were ordered, with the current rate of orders only 11% behind the total. ‘last year. As might be expected, the three largest shipbuilding countries, China, South Korea and Japan, have received the orders.
It was a truly record-breaking start to the year for container ship orders, says BIMCO. They indicate that a total capacity of 2.2 million TEUs has been ordered so far in 2021. This is more than 12 times more than the 184,254 TEUs ordered in the first five months of 2020 and over. 60 percent higher than the previous record, which dates back to early 2005.
The most popular type of vessel, measured in TEUs as well as number of vessels, has been Ultra Large Container Ships (ULCS) which have a capacity of 15,000 TEU or more. A total of 89 vessels have been ordered in this category with an average capacity of 16,622 TEUs. BIMCO points out, however, that no container ships between 16,000 and 23,000 TEU have been ordered.
The demand for container ships is polarized between 15,000 and 16,000 TEU vessels on one side and 24,000 TEU vessels on the other. There are 14 orders for what will be the world’s largest container ships, each exceeding 24,000 TEUs. However, the majority of orders have been for 15,000 to 16,000 TEU vessels. A total of 75 vessels with a combined capacity of 1.1 million TEUs were ordered in what is now a mid-size category.
“The larger ULCS are less popular with carriers who find 15-16,000 TEU vessels a better option,” said Sand. “This is because they still offer strong economies of scale while not putting the same limits of flexibility as vessels over 20,000 TEU in terms of business models.”
The vast majority of the tonnage ordered so far this year will be delivered in 2023, which BIMCO estimates will see 1.5 million TEUs delivered. This would make it the busiest year for container ship deliveries since 2015.
While not matching the skyrocketing growth in container ship orders, demand for new tankers has been strong, rising 47.4% in the first five months of 2020. In contrast, tankers recorded A drop in new orders, while the dry bulk contraction, despite the strength in the freight and S&P markets, is only slightly higher than last year.
“The oil tanker market is split in two. We are seeing an increase in contracts for tankers, as owners who filled their coffers at the height of the market last year bet on a cheaper deal when ships are delivered, while tankers are proving less popular, ”he said. Sand said. .
Despite weaker market conditions in the first five months of this year compared to early 2020, VLCC orders increased by 125% to a total of 8.2 million dwt, from 12 vessels to 27 After just five months, VLCC’s orders are now only 4 vessels (1.1 million dwt) less than the total orders in 2020. The increase in VLCC contracts was enough to offset the decline in small contracts. oil tankers. Orders for Aframax and Suezmax tankers fell 44.5% to 1.5 million dwt between January and May 2021 compared to 2020.
In contrast, in the tanker market, the larger long-haul vessels proved less popular than the MR tankers, 28 of which were ordered for a total of 1.4 million dwt. The orders all have a capacity of 40 to 50,000 DWT. For LR2 tankers, only five orders were placed this year, and none for LR1 tankers.
The larger ships are also the most popular in the dry bulk market. Contracts for Panamax and Capesize vessels increased by 40.9%, while a 56.5% drop in new orders for Handysize and Handymax vessels means that the total dry bulk subcontracting activity has declined. increased only 3.6% to 8.6 million dwt.
The other segments of the marine construction industry are also not benefiting from the strong rebound in new orders. While BIMCO does not track cruise ships, this segment, which had one of the largest order books, is currently stagnating. Only one new cruise ship was ordered in 2021. NYK ordered a 51,950 gross ton cruise ship to be delivered by the end of 2025 to Meyer Werft, but shipbuilders were able to keep pre-pandemic orders and are delivering these new construction cruise ships.