Demand for “green” ships is expected to boom over the coming years, already prompting the reopening of decommissioned shipyards, especially in China, while yard utilization percentages are also on the rise. In its latest weekly report, shipbroker Intermodal commented that “during the first 6 months of 2023, a total of 719 vessels have been contracted, out of which 24.2% were bulkers, 23.09% were oil tankers (crude & products), 9.46% were containers, 5.01% were LPG carriers and 4.31% were LNG carriers. Despite the fact that 2023 orders were dominated by bulkers and tankers, the orderbook for both tankers and dry bulk vessels remains at historically low levels against a backdrop of uncertainty around the energy transition framework and increased newbuilding prices. Instead, the orderbook mix seems to evolve and is largely shaped by orders for LNG carriers and container vessels”.

According to Ms. Chara Georgousi, Research Analyst with Intermodal, “the driver behind the recent boom in container contracting activity has been a combination of highly profitable freight markets in 2021 which was extended in the first months of 2022 and a persistent desire from key market players toreplace their fleets. Whereas an active project sanctioning environment is reflected in LNG carriers’ demand. Yard capacity is expected to rise by 1.5 million CGT between 2022 and 2023 following the reopening of 12 yards in China. Thus, the 299 active yards in 2023 have a combined capacity of 54 million CGT. The utilization of the 80 first-tier yards is forecast to increase to 83% in 2023 from 65% in 2022, while in 2024 could climb to 91%. Leading yards in South Korea and China are outpacing those in Japan and other countries”.

Meanwhile, “shipbuilding prices skyrocketed during 2021 but have since increased modestly. Out of all segments, LNG prices have registered the biggest increase. Prices are expected to remain on the upper limit amidst elevated steel plate prices, labor shortages, inflationary pressures, and restrained shipbuilding capacity. The dry bulk orderbook continued to decline in 1H2023 and is now at a historical low of 7.21% of the fleet, despite the uptick in ordering activity in 1H2023. The contracting activity is projected to remain subdued in the coming months since availability at the top 10 Chinese yard groups will remain constrained until 2025-2026. The tanker orderbook stands at a historical low of 4.59% of the current fleet after declining by almost 30% in the previous 6 months amidst limited yard availability at top-tier yards and elevated newbuilding prices (at 13-year highs). Ordering activity will likely remain subdued in the coming months. The container orderbook, which currently stands at a historical high of 28.08% of the total fleet, has continued to increase in 1H2023 despite the softening contracting activity, as new orders have surpassed actual deliveries”, Ms. Georgousi said.

Intermodal’s analyst concluded that “orders for newbuilt vessels are spread out evenly throughout 71 yards. The LNG orderbook represents 51.33% of the fleet while contracting activity continues at a steady pace. Contracting in the year to date equals 30 vessels, significantly lower than last year’s record of 175 vessels, though another firm total is forecast for the whole year. In light of healthy order volumes, solid forward cover at yards (approx. 3.5 years), and ongoing inflationary pressures, newbuild prices continue to firm. The LPG orderbook continues to increase and now reflects 20.47% of the fleet, with more than half of the vessels on order being VLGCs. The VLGC orderbook represents 24% of the fleet and all vessels will be dualfueled. With roughly 64% of orders slated for delivery in 2023, the LPG fleet is anticipated to grow faster than demand”.
Nikos Roussanoglou, Hellenic Shipping News Worldwide